Plutocrats

Becoming a plutocrat is like being one of those eighteen men. This is not to suggest that women are somehow biologically precluded from breaking into the plutocracy, in the way that the female physique may never run a marathon as quickly as the male one. But the image is a way of illustrating a significant and rarely remarked- on aspect of the rise of the super-elite: it is almost entirely male. Consider the 2012 Forbes billionaire list. Just 104 of the 1,226 billionaires are women. Subtract the wives, daughters, and widows and you are left with a fraction of that already small number.

What’s especially striking about this absence of women at the top is that it runs so strongly counter to the trend in the rest of society. Within the 99 percent, women are earning more money, getting more educated, and gaining more power. That’s true around the world and across the social spectrum. If you aren’t a plutocrat, you are increasingly likely to have a female boss, live in a household where the main breadwinner is female, and study in a class where the top pupils are girls. As the 99 percent has become steadily pinker, the 1 percent has remained an all-boys club. One way to understand the gap between the 1 percent and the rest is as a division of the world into a vast female-dominated middle class ruled by a male elite at the top.

Another window into how the gender divide sharpens at the very top comes from the Goldin and Katz Harvard study. College is one of the arenas the women of the middle class are conquering—more than half of all U.S. undergraduates are now female, and their grade point average is higher than that of their male peers. Young women are more likely to get their BAs and go on to graduate school. The recession has exacerbated the gender divide, with young women responding to a tough job market by going back to school and improving their skills. Young men have not. At Harvard, which released women from the apartheid of Radcliffe only in 1973, the incoming first-year class in 2004 included more women than men.

But as soon as they graduate, Harvard women’s chances of getting to the very top decline because of the jobs they choose. Goldin and Katz found that finance and management were overwhelmingly the most lucrative fields, with financiers earning that whopping 195 percent premium. Men have responded to this incentive strongly —of the class of 1990, 38 percent of the men worked in management and finance fifteen years after graduating, compared to just 23 percent of the women. By 2007, the number of women starting off in finance or management had jumped to 43 percent, but a staggering 58 percent of the men had made that same choice. You can see the difference in their incomes: in 2005, 8 percent of Harvard men earned more than $1 million; just 2 percent of the women crossed that threshold.

Not too many people talk about the absence of women at the very top. That’s partly because, in a fight that’s been going on since the famous debates between Lenin and Bolshevik feminist Alexandra Kollontai, the left has a history of bullying women who dare to talk about gender at the apex of power. Doing so has been framed as a selfish concern of upper-class women, who are urged to focus their attention on the more deserving problems of their sisters at the bottom. As for the right, it has historically preferred to avoid discussion of gender and class altogether.

But the absence of women in the plutocracy is an important part of the culture of the 1 percent and a crucial way the very rich differ from everyone else. It is a powerful force in the workplace, where most plutocrats have no female peers. And it shapes their personal lives as well. The year 2009 was a watershed for the American workplace—it was the first time since data was collected that women outnumbered men on the country’s payrolls. In 2010, about four in ten working wives were the chief breadwinners for their families.

The plutocracy, by contrast, still lives in the Mad Men era, and family life becomes more patriarchal the richer you get. In 2005, just over a quarter of taxpayers in the top 0.1 percent had a working spouse. For the 1 percent, the figure was higher, at 38 percent, but significantly lower than in the country as a whole. There’s not a lot of mystery to these choices of the wives of the 0.1 percent, as I discovered at a dinner party when I sat next to a private equity investor. He was in his late thirties with no children, and as we chatted I learned that he had met his wife when they were both students at Yale Law School. But when I asked which firm she now worked at, I realized I had committed a faux pas. If your husband is earning $10 million a year, choosing the treadmill of billable hours really is rather bizarre. (It turns out she spends her time investing part of the family portfolio, studying art history, and decorating their Upper East Side town house.)

And it is graduates of Yale Law School and the like who are the housewives of the plutocrats. In 1979, nearly 8 percent of the 1 percent had spouses the IRS described as doing blue-collar or service sector jobs— governmentspeak for bosses married to their secretaries. That number has been falling ever since. What economists call assortive mating—the tendency to marry someone you resemble—is on the rise. But while the aggressive geeks of the super-elite are marrying their classmates rather than their secretaries, their highly educated wives are unlikely to work.

My own suspicion is that most plutocrats privately believe women don’t make it to the top because something is missing. Most know better than to muse on this matter in public—they all remember, for instance, what that cost Larry Summers, who happens to have a sterling record of promoting the careers of his female proteges—but I can report an unguarded remark one private equity billionaire made to me. The problem, he said, wasn’t that women weren’t as smart or even as numerate as men; he had hired many women in starting positions who were as skilled as their male counterparts. But they still didn’t have the royal jelly: “They don’t have the killer instinct, they don’t want to fight, they won’t go for the jugular.” By way of evidence, he described a subordinate who had cried when he told her she had made a mistake. You can’t do that and win, he said.

THREE SUPERSTARS

A society in which knowledge workers dominate is under threat from a new class conflict: between the large minority of knowledge workers and the majority of people, who will make their living traditionally, either by manual work, whether skilled or unskilled, or by work in services, whether skilled or unskilled.

—Peter Drucker

It is probably a misfortune that… popular writers… have defended free enterprise on the ground that it regularly rewards the deserving, and it bodes ill for the future of the market order that this seems to have become the only defense of it which is understood by the general public…. It is therefore a real dilemma to what extent we ought to encourage in the young the belief that when they really try they will succeed, or should rather emphasize that inevitably some unworthy will succeed and some worthy fail.

—Friedrich Hayek

It is possible that intelligent tadpoles reconcile themselves to the inconvenience of their position by reflecting that, though most of them will live and die as tadpoles and nothing more, the more fortunate of the species will one day shed their tails, distend their mouths and stomachs, hop nimbly on to dry land, and croak addresses to their former friends on the virtues by means of which tadpoles of character and capacity can rise to be frogs.

—R. H. Tawney

THE INTELLECTUALS ON THE ROAD TO CLASS POWER

When Shelley described poets as “the unacknowledged legislators of the world,” he was referring to the moral and imaginary power of the creative class, not suggesting that it actually controlled the machinery of the state or pulled the levers of the economy. But a samizdat manuscript written in 1973–74 and later smuggled out of