‘That’s why [in] my farewell address tonight, I want to warn the country of some things that give me great concern; and that’s the dangerous concentration of power in the hands of a very few ultrawealthy people, and the dangerous consequences if their abuse of power is left unchecked. Today, an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy, our basic rights and freedoms and a fair shot for everyone to get ahead. We see the consequences all across America.’
President Joe Biden
Our quotation today is an extract from U.S. President Joe Biden's farewell address as president, delivered on Wednesday 15th January as we prepared to enter a new era following Donald Trump's second inauguration on 20th January. Joe Biden goes on to say, ‘in a democracy, there is another danger — that the concentration of power and wealth erodes a sense of unity and common purpose. It causes distrust and division. Participating in our democracy becomes exhausting and even disillusioning, and people don’t feel like they have a fair shot. We have to stay engaged in the process. I know it’s frustrating’.
He is expressing something which may be worrying many people this week. In the period leading up to the inauguration, Trump's team has behaved more like a populist dictatorship-in-waiting than seeking to unify the nation through democratic participation. The populist groundswell which swept him to power looks more like a means to an end — unlimited power — rather than an end in itself.
Biden's problem, just as is Starmer's problem here in the United Kingdom, is that western democracy has singularly failed to deliver participation in wealth creation throughout society — rather, it has sought to monopolise as much as it can within state control and finance. People don't like that, any more than they will like Donald Trump's cohort of oligarchs over the next few years.
We have to find a new spirit of generosity in which everyone can share and thrive, and it's proving very elusive.
The problem in the United Kingdom is the ‘other side of the coin’ from Trump's cohort of oligarchs. The headline in last Saturday's edition of The Times spelt it out: ‘Labour tax plans trigger exodus of millionaires’. The article went on to quote analysis from New World Wealth describing a net exodus of 10,800 millionaires in 2024, a rise of 157% compared to 2023.
The analysis was, of course, focused on the reverse effect that the imposition of a swathe of new taxes will have on tax revenues. However, it did point out that the exodus will also impact philanthropy, as so many wealthy people move overseas.
That's not to say that these migrating millionaires will be inaccessible in future: The Times’ article explains that the outflow is mainly to other European countries such as Italy and Switzerland, as well as the United Arab Emirates. But philanthropy may have to take on a more international dimension if the Labour Government persists in driving its successful UK entrepreneurs away.
The United States will certainly retain its wealth creators under Trump, but whether they will build a sense of moral or ethical responsibility is quite another question. Indeed, Ian Cowie's article on investment ideas in The Sunday Times Money Section was headed, ‘Weapons, oil and space: how to make the most of Trump’. This was well illustrated by last week's launch of Jeff Bezos’s new Blue Origin space rocket.
It’s a dilemma, how to instil a sense of responsibility for all when the only available political models are either ‘Wealth and Autocracy’ or socialist public sector monopoly.
Joe Biden points to the words of the Declaration of Independence as the basis for challenging this dilemma: that ‘we hold these truths to be self-evident — that all are created equal, endowed by their Creator with certain unalienable rights which include life, liberty and the pursuit of happiness’.
But the ‘Wealth and Autocracy’ agenda challenges equality, while Socialism challenges the liberty of the individual.
This is why we place such an emphasis on finding a more egalitarian form of capitalism. Capitalism delivers wealth creation, but it is heavily influenced, more than ever today, by intense polarisation of wealth. This is made even more acute by the technological revolution, and Artificial Intelligence will only make that worse. Meanwhile social media continues to major on self-interest through its insidious ‘1984-like’ (to quote George Orwell's masterpiece) denial of truth, in order to turn people away from their interest in caring for others, however different they may be.
Listeners will be aware that we offer a real way forward out of this dilemma, both long-term and short-term. The long-term focus is on embedded inter-generational rebalancing, and it is increasingly clear that this will be dependent on philanthropy due to the failure of governments to prioritise anything beyond their own coffers.
The short-term focus should be on ‘Stock for Data’, which would not only provide a massive spread of participation in technological wealth creation but also tackle some of those concerns about the insidious motivation through which social media contrives to drive people apart, rather than bringing them together.
There's been much talk over recent days about what Joe Biden's legacy will be. The past year cannot have been easy for him as old age takes its toll but, apart from the huge expansion in American debt, I think history will judge him fairly. In contrast, many wait in trepidation to discover what Trump will leave in his wake — let's hope that his bark is worse than his bite.
Gavin Oldham OBE
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