Chrystia Freeland is the federal member of parliament for Toronto Centre and the author of Plutocrats: the Rise of the New Global Super-Rich and the Fall of Everyone Else.

Earlier this year, the most reliable way for a billionaire to make the headlines was to compare suggested tax increases to Nazi Germany. Lately, though, the more interesting shift in the politics of the plutocracy has been more genteel.

There will be more Hitler analogies, of course, but another camp among the superrich is starting to tack in the opposite direction. Some plutocrats accept the evidence that capitalism is no longer working for the middle class, and are trying to figure out what to do about that.


It is not just George Soros, the hedge-fund billionaire, who cheerfully describes himself as a class traitor and has been worrying about the shortcomings of what he calls free-market fundamentalism for decades, anymore. Among the plutocrats, this once-radical perspective is going mainstream.

You could see that in London in late May, at a conference on “Inclusive Capitalism.” In the graceful, gilded rooms of the Guildhall, the historic seat of the City, one of the world’s two centers of finance, international investors controlling $30 trillion worth of asset–one third of the global total—gathered to discuss, as Paul Polman, the CEO of Unilever, put it, “the capitalist threat to capitalism.”

Capitalism, Polman and Lynn Forester de Rothschild, the conference’s organizer, wrote in an introductory essay, “has often proved dysfunctional in important ways. It often encourages shortsightedness, contributes to wide disparities between the rich and the poor, and tolerates the reckless treatment of environmental capital. If these costs cannot be controlled, support for capitalism may disappear.”

That was just the curtain-raiser. The discussion was kicked off by Fiona Woolf, Lord Mayor of the City of London, who warned that capitalism needed to be “for all, not just the gilded few.” Next up was Prince Charles—yes, that Prince Charles—who said the triumphalism of capitalism when the Soviet Union collapsed had been a mistake and that “the long-term job of capitalism is to serve people, rather than the other way around.”

The morning’s keynote address was delivered by Christine Lagarde, managing director of the International Monetary Fund. She quoted both Karl Marx’s prediction that capitalism “carried the seeds of its own destruction,” and Pope Francis’ characterization of increasing inequality as “the root of social evil.” She came out against a favorite centrist reaction to rising inequality—“that ultimately we should care about equality of opportunity, not equality of outcome.” The problem, Madame Lagarde said, was that opportunity could never be equal in a deeply unequal society. She called for more progressive income tax systems and greater use of property tax.

These prescriptions may be par for the course for the populists who swept Bill de Blasio to City Hall after 12 years of Mike Bloomberg’s plutocratic reign, or for supporters of Elizabeth Warren, the crusading liberal senator from Massachusetts. But they came from the managing director of the IMF, whose organization has long been the villain in the anti-globalization movement’s worldview, the fiendish mastermind of the plutocracy’s “shock doctrine” efforts to take over the planet. That narrative is still alive and well—Lagarde declined an invitation to be this year’s commencement speaker at Smith College after students and faculty protested she should not have been invited because the IMF was “a corrupt system” that fueled the oppression and abuse of women worldwide.

At Guildhall, the day ended with a dinnertime keynote speech by another one of the architects and watchdogs of global capitalism, Mark Carney, governor of the Bank of England. He said that rising income inequality was real and international: “Within societies, virtually without exception, inequality of outcomes both within and across generations has demonstrably increased.” He refuted the popular centrist argument that this is all about meritocracy: “Now is the time to be famous or fortunate.” And he warned, with strong language, that the capitalist system was at risk: “Just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself.”

The spectacle of plutocrats eating porcini risotto in a Georgian mansion and bemoaning the excesses of capitalism cries out for Tom Wolfe—one British hack made a start in that direction by quipping to his peers that the gathering would more aptly have been called a meeting about “exclusive capitalism.”

But that was precisely the point—and why the conference, and the broader trend it is a part of, matter. Most of the Inclusive Capitalism conference was off the record, but its invitation-only attendees were a roll call of the global plutocracy, including Google executive chairman Eric Schmidt, Blackstone co-founder and CEO Stephen Schwarzman, and the CEOs of UBS, GlaxoSmithKline, Dow Chemical and Honeywell.

There are other signs of this shift. Social finance, which takes into account social and environmental goals, is moving from a niche into the mainstream—$1 trillion were invested in social finance funds in the United States in 2012, a five-fold surge from $202 billion in 2007. Sallie Krawcheck, a former senior executive at Citigroup and at Bank of America, who in June opened an index fund focused on companies with a greater number of women in top jobs and on their boards. She said the goal was to have a social impact while earning a fair investment return. Some other business leaders, in industries you might not expect to have much of a social conscience, are starting to support public policy that would raise their costs in the short term. They include the CEO of McDonalds, who in a little-noticed speech in May said “McDonald’s will be fine” if the minimum wage were to rise.

This emphasis on fairness is a big and consequential change. Plutocrats were the chief beneficiaries of so-called neoliberalism and the suite of political changes it brought beginning in the late 1970s—deregulation, weaker protection for unions, the shareholder value movement and the subsequent inflation of executive compensation. It is no surprise that the superrich supported these policies, and the intellectual movement that underpinned them. What’s striking is that today, 30 years later, in at least some gatherings of the plutocrats, we are starting to hear speeches that would not have been out of place at Zuccotti Park.

It is no accident that May’s Inclusive Capitalism conference took place in London, that the two most powerful speakers were French and Canadian, and that the economist whose work has best captured this new spirit of the times is the Paris-based Thomas Piketty. America is the indispensable nation and it is the driver of the technology revolution. We are used to the world’s theme songs being sung in an American accent.

But for American plutocrats, accepting that capitalism isn’t working for everyone can be a more bitter pill than for many of their global peers. That’s because, in the United States more than anywhere else, in recent decades wealth and its accumulation came to be viewed as a civic virtue. As Nick Hanauer, the Seattle entrepreneur and investor, has pointed out, to be rich meant, by definition, that you were good. (This, Hanauer says, has made it particularly nice to be a rich American— you enjoy moral as well as material comfort.)

An important part of this story is meritocracy. In America, more than anywhere else, the plutocrats define themselves as self-made inventors and strivers: They built it themselves. This is especially true of Silicon Valley, and it is no accident that its tech tycoons are the most accepted, even beloved, face of American plutocracy.

There is data to support this self-regard. In 1982, 40 percent of the people on the Forbes 400 list were self-made, meaning they owed their wealth to businesses they had built, not inherited, according to research by professors Steven Kaplan and Joshua Rauh. By 2011, after three decades during which the income and wealth at the very top shot up, the percentage of self-made plutocrats increased as well, to 69 percent.

This aspect of the rise of the plutocracy doesn’t get much attention from left-leaning students of the phenomenon, and for good reason. Self-made wealth, particularly when it is acquired through the creation of a product we all love—Gmail, the iPad—is hard to criticize.

That’s why Lagarde’s and Carney’s speeches at the Inclusive Capitalism conference, and the wider intellectual trend they are a part of, are so significant. Equality of opportunity is the public policy of choice of the meritocratic plutocrats—it is no accident that education is the focus of so much American philanthrocapitalism. But Lagarde—and let’s remember, she’s the managing director of the IMF—argued that equality of opportunity is insufficient, and probably impossible to achieve in conditions of soaring inequality. Carney took the meritocracy justification head-on, asserting that “returns in a globalized world are amplifying the rewards of the superstar and, though few of them would be inclined to admit it, the lucky” and inviting the assembled CEOs and investors to judge public policy through the Rawlsian veil of ignorance, “not knowing their future talents and circumstances.”

Considered alongside Piketty, whose signal political contribution is the idea that, left to its own internal logic, capitalism will create a society of ever greater, and eventually inherited, disparities in wealth, these arguments represent a sea change in how we think of the market economy. To be sure, there have always been voices on the left that argued that capitalism should be thrown out altogether. But that isn’t Piketty’s position. He takes care to identify himself as a child of the post-1989 era, for whom capitalism is the only plausible economic system.

What’s new about Piketty’s argument is his departure from the crony capitalist critique that has been dominant among progressives, particularly since 2008. For him, the problem isn’t just a few greedy, corrupt fat cats—it is the system itself.

Interestingly, this is now the case that some plutocrats themselves are making; many more of them are listening. From Prince Charles to Unilever’s Polman, from the IMF to the Bank of England, an influential group at the heart of global capitalism is arguing that capitalism needs to be changed—in order to save it.

The intellectual tides are turning—and, eventually, that could mean the political tides turn as well. Uncharacteristically, at least for the postwar era, Americans aren’t in the vanguard. But it is a mistake to think that the Gordon Gekko, or even the Steve Jobs, version of capitalism is the only way Americans have ever approached their political economy. We are accustomed to assuming Americans are culturally comfortable with great disparities of wealth, and that Europeans are born social democrats.

It was not ever thus. Here is Thomas Jefferson (overlooking slavery, of course), writing from Monticello in September, 1814: “We have no paupers … The great mass of the population is of labourers; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the labouring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families … The wealthy, on the other hand, and those at their ease, know nothing of what the Europeans call luxury. They have only somewhat more of the comforts and decencies of life than those who furnish them. Can any condition of society be more desirable than this?”

That sounds a lot like inclusive capitalism.