Russia? China? No. The rising world superpower is the billionaire class. Our problem, says Sean McFate, is that we’re still thinking in nation states.
Nation states have only existed for the last 300-400 years. Before that, wealthy groups – tribes, empires, aristocracies, etc – employed mercenaries to wage private wars.
As wealth inequality reaches combustion point, we could land back in the status quo ante of the Middle Ages. Who will our overlords be? Any or all of the 26 ultra-rich billionaires who own as much as the world’s 3.8 billion poorest. What about Fortune 500, which is more powerful than most of the states in the world? Random billionaires, multinational corporations, and the extractive industry may buy armies and wage war on their own terms.
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SEAN MCFATE:Dr. Sean McFate is an adviser to Oxford University’s Centre for Technology and Global Affairs, as well as a professor of strategy at the National Defense University and Georgetown University’s School of Foreign Service in Washington, DC. Additionally, he is the author of several books, including Shadow War, The New Rules of War, and The Modern Mercenary.
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TRANSCRIPT:SEAN MCFATE: The United States, especially, has been now accustomed, for 25 years, as being the universal and unitary superpower. That’s not going to last forever. I think most people know this, even though some may be in cognitive dissonance over this. The truth is there are rising powers like Russia and China, but there are other rising powers too. One of our problems is that we live in a state-centric view of the universe. International relations, for most of us, is run by states. Nation states are the global, political unit of the international order. And this is what we learn in social studies as kids. But that is actually not the way the world has worked for most of human history. States are actually about 300 or 400 years old. Before there were states, there were empires, and there were tribes, and everything else. The reign of states and only states can wage war legitimately that is coming to a close. We’re actually going back to the status quo ante of when global order was a free-for-all of like the Middle Ages of antiquity, to what came before. And one of the things of that free-for-all is that: Who else were superpowers? It wasn’t just states. So in the Middle Ages, the papacy was a superpower. Rich aristocracies were superpowers. Are we going back this world again?
So you know we have random billionaires today who have as much power as states. There are 62 people in the planet who own the equivalent of half the world’s wealth. 62 people. You can put them all onto a bus. You have multinational corporations. We have the Fortune 500, which are more powerful than most of the states in the world. Of the 190, 194 states in the world, most are fragile or failed. We only think the top 25 states, like the US, Western Europe, Eastern Asia, et cetera. But that’s an anomaly. The vast majority of states in the world are more either regimes hiding inside states or just outright dumpster fires. So what we’re going to see in the future is those who have wealth and political power, who can also hire their own private armies now, become super powers. The world used to wage a lot of private war in military history. In fact, most of military history is privatized. Mercenaries have always been a major component of war. And what happens when you privatize war is that now military strategies blend with business ones. And this puts us at risk because our four stars who are in charge of our military and our policymakers are not prepared for that type of warfare.
So mercenaries were around for millennia. Mercenaries have been around since forever. And it’s anomalous in history that 150 years ago they sort of went away. And why that is is still a mystery. People say, well, after the 30 Years War, or after the Peace of Westphalia of 1648, where mercenaries ran amok, both rulers and ruled were tired of them, and rulers and kings started to invest in their own standing armies, which is very expensive. I mean, mercenaries are cheaper than standing armies, just like it’s cheaper to rent than to own…
The Hill’s New “Rising” UNWATCHABLE with NEW Hosts Emily Miller and Colin Rogero
The new Rising staff is outraged that there are leaks of Billioinaire tax returns.
Warren Buffett and the Myth of the ‘Good Billionaire’
Warren Buffett appears to be the safest kind of billionaire: the good kind. Mr. Buffett is neither Zuckerbergian messiah nor Musky provocateur, neither Bezosist space cadet nor Sacklerian undertaker. He is, or seems to be, quiet, humble, indifferent to money, philanthropic and critical of the system that allowed him to rise. Years ago, a proposed tax increase was named after him.
It’s easy for people to think: If only members of the Sackler family were more like Mr. Buffett, imagine how many lives would have been saved. If only the billionaires who haven’t signed the Giving Pledge would give away as much as Mr. Buffett has pledged to, imagine the impact on the world. If only more billionaires would make use of the system without feeling the need to pervert it, so many of our troubles would vanish.
So I regret to inform you that Mr. Buffett is actually the most dangerous kind of billionaire we have. The worst billionaires are the Good Billionaires. The sort who make it seem like the problem is the distortion of the system when, in fact, the problem is the system.
Actually malevolent and disastrously negligent plutocrats get most of the attention. And when we hear about these Bad Billionaire exploits, it is possible to conclude from them that the system needs better policing, updated regulations and maybe slightly higher taxes. The system needs to be made to work again.
But as America slouches toward plutocracy, our problem isn’t the virtue level of billionaires. It’s a set of social arrangements that make it possible for anyone to gain and guard and keep so much wealth, even as millions of others lack for food, work, housing, health, connectivity, education, dignity and the occasion to pursue their happiness.
There is no way to be a billionaire in America without taking advantage of a system predicated on cruelty, a system whose tax code and labor laws and regulatory apparatus prioritize your needs above most people’s. Even noted Good Billionaire Mr. Buffett has profited from Coca-Cola’s sugary drinks, Amazon’s union busting, Chevron’s oil drilling, Clayton Homes’s predatory loans and, as the country learned recently, the failure to tax billionaires on their wealth.
The Good Billionaire myth took a hard blow in recent days when Mr. Buffett won a dubious distinction. A staggering exposé published by ProPublica revealed just how little the biggest plutocrats pay in taxes, despite mounting piles of wealth. And at the very top of that list of plutocrats — many of them with troubled reputations — was the cleanest, grandfatherliest plutocrat of them all: Mr. Buffett.
ProPublica’s story was unusual in that, for once, it was the Good Billionaire at the top of the naughty list. This was helpful, because it served to indict the system that makes him possible, even when it is working perfectly, wholly lawfully.
From 2014 to 2018, Mr. Buffett’s wealth soared by $24.3 billion, according to ProPublica. (To underline, this is just the amount the fortune grew.) The amount of taxes Mr. Buffett paid over this period? $23.7 million. If middle-class Americans in their 40s enjoyed such a low effective tax rate, they would have paid a few dozen bucks per household over this same time period. Instead, as the ProPublica story notes, they paid around $62,000.
Imagine if Mr. Buffett had to pay the same fraction of the growth of his net worth that regular people do. Taxing that money could have helped pay for bridge repairs, mammograms, and free day care. More important — and this isn’t said enough — there is intrinsic value in shrinking gargantuan fortunes. The sway plutocrats have over public life is inconsistent with a one person, one vote democracy.
The important point here is that Mr. Buffett’s tax payments as detailed by ProPublica are fully legal. Though Mr. Buffett has called for changing the tax system, while we have the one we have, he will continue to benefit from the madness of taxing billionaires for their income, rather than their wealth, when their income is pretty much just a number they can construct.
I asked Mr. Buffett last week, via his longtime secretary, Debbie Bosanek, if he could think of even one tax or accounting practice that he has come to regret. Sure, he may have followed the letter of the law. But was there any aspect of his patriotism or humanity that left him feeling guilty for hoarding so much untaxed when regular people pay so much in taxes? Though Ms. Bosanek responded to an initial inquiry, she declined to offer any such examples.
In a long statement last week, Mr. Buffett defended himself by pointing to his long advocacy for a fairer taxation system, and then he immediately told on himself by undermining the very idea of taxes in the same letter. “I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing U.S. debt.”
In other words: I believe in higher income taxes on people like me, but I’m highly organized to avoid having income to report, and I don’t really believe in taxes because I think I should decide how these surplus resources are spent.
And this points to another way in which the Good Billionaire is hard to deal with. The crooks and the scoundrels and the people manifestly looking for quick P.R. highs come to philanthropy for the marketing payoff. When Goldman Sachs announces a new initiative on fighting the racial wealth gap despite having done little to repair the damage it did to Black homeowners in contributing to the 2008 financial meltdown, some may be fooled, but, more and more, many are not.
Supposed Good Billionaires like Mr. Buffett and his friend Bill Gates are more complicated because they give real money. They may benefit from marketing but also seem to many people to be motivated by more than that, and they apply their smarts to the work.
Yet because of this, it is often the Good Billionaires who end up with the most illegitimate influence over public life. No one is asking members of the Sackler family for public health advice. But Mr. Gates has become a major policy voice on vaccines despite holding no elected position. Mr. Buffett, for his part, has shied away from that kind of lane hopping and richsplaining, but in donating his fortune to Mr. Gates’s foundation he has pumped up that undemocratic influence.
Mr. Buffett is almost the perfectly made billionaire for this moment in which, at last, many Americans are beginning to question not only corruptions of the system but the matter of whether billionaires should exist at all. He doesn’t do the things the worst of them do. He isn’t in it for what they’re in it for. He clearly must care about money, but he also kind of doesn’t care about money. Even in his generosity, he has avoided the imperial lording over that others cannot resist.
And this is what makes him so troubling, because through him we are tempted into believing that a system can be defended that allows a man to accumulate more than $100 billion while people are sleeping, in hock to him, in his mobile homes, shortening their lives with the beverages he’s invested in, scampering around the warehouses whose nonunion status has redounded to his money pile.
It can’t. And who keeps us from seeing that simple, stark truth more effectively, more perniciously, than the Good Billionaire?
7 billionaires who won’t leave their fortunes to their kids
Bill Gates
Bill and Melinda Gates are giving their three kids “a minuscule portion” of their estimated $89 billion, they told the Daily Mail in 2011. “It will mean they have to find their own way,” Bill said at the time.
Although even a fraction of the Gates’ wealth will be enough to put their kids among the wealthiest individuals in the world, Bill believes it will compel them to rely on themselves. “It’s not a favor to kids to have them have huge sums of wealth,” he told “This Morning” last year, as reported by SFGate. “It distorts anything they might do, creating their own path.”
The couple plans to put the majority of their fortune toward charitable causes, namely the Bill & Melinda Gates Foundation, which aims to eradicate disease, poverty and hunger across the globe. Along with fellow billionaire Warren Buffett, the Gateses also helped create the Giving Pledge in 2010, which encourages more of the super-rich to leave the majority of their wealth to philanthropic causes.