The Billionaire Age Pt 1: How did we get here? From IDEAS

Summary

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Podcast Summary: The Billionaire Age Pt 1 – How Did We Get Here?

Podcast: Front Burner (CBC)
Series Origin: IDEAS
Host: Jayme Poisson
Producer/Narrator: Mary Link
Date: August 3, 2026

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Overview

This episode brings listeners the first part of a four-part IDEAS documentary series, The Billionaire Age, exploring how society reached today's unprecedented extremes of wealth concentration and assessing the historic, economic, and political forces that have shaped the modern “billionaire class.” Through interviews with prominent economists, historians, legal scholars, activists, and wealthy insiders, the episode investigates cycles of inequality, the impact of policy turns, and the profound implications for democracy.

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1. Setting the Stage: A New Era of Extreme Wealth

• Main Statistic: 3,000+ billionaires globally, 82 from Canada, and 19 “centibillionaires” (worth $100B+). The 12 richest people now control more wealth than the bottom 50% of humanity.
  (00:34–02:14)

• Key Contest: Economists argue that the battle of the 21st century is oligarchy vs. democracy.

  • Paul Krugman: “We really are in many ways an oligarchy.” (01:38)
  • Gabriel Zucman: “The main risk is to see oligarchy overcome democracy… that's the battle that we are in.” (01:40)
  • Mary Link (Producer): “Having a billion really constitutes a moral failure.” (01:51)
  • Luca Chancel: “This amount of wealth concentration… is unique. There is no historical comparison.” (01:58)

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2. How Did Billionaire Wealth Get So Extreme?

Historical Perspective

• Inequality is the Norm:

  • Guido Alfani: "Only twice in the past 700 years of recorded history in the West was the pie more equally shared..." (08:03)
    • The Black Death (14th century): Plague wipes out half the population, increasing wages & reducing inequality—for a time. (08:31–11:23)
    • Post World War II to 1970s: Policies foster a strong middle class in West—another relatively equal era.

• Cycles of Wealth:

  • Concentrated wealth returns after brief interludes of equality.
  • Inheritance Laws: “The 1% figured out a way to grab more of the pie again” via undiluted inheritance practices (e.g., eldest-son-only inheritance).

Gilded Age and the Modern Billionaire

• Rockefeller vs. Today’s Billionaires:

  • Luca Chancel: “Global billionaires today are significantly richer than Rockefeller himself... also richer in terms of what they can purchase and how far they are from the rest of the population... This is really a novelty of the past 20 years.” (12:38)

• Personality Shift:

  • Paul Krugman: Compared with Gilded Age tycoons, “There’s a species of malignant wealth that is something new in America… the Tech Bros and the Wall Street Bros.” (14:21)

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3. Power, Technology, and the New Oligarchs

Money as Power

• Control of Ideology, Media, Policy:
  • Gabriel Zucman: “An extreme concentration of wealth means an extreme concentration of power—the power to influence ideology, to buy media, to influence policy making...” (06:55)

Big Tech: Beyond Old Money

• Tim Wu (Columbia Law, Antitrust Specialist):

  • “More powerful still is control over human attention and consciousness.” (16:57)
  • “There’s nothing in the history of Standard Oil or J.P. Morgan’s activities that has a real precedent in today’s activities [of Big Tech].” (17:40)

• AI & Future Risks:

  • “If you add artificial intelligence... generating intelligence which eventually becomes equal to or even surpasses human intelligence... that becomes an entirely different kind of power.” (17:40)

Social Darwinism and the Billionaire Ideology

• 19th/21st c. “Survival of the Richest”:
  • Tim Wu: “There is a strong current of evolutionary theory in our current state of inequality... [Silicon Valley] is trying to create a race of supermen who… will rule the future.” (21:15–22:17)
  • Referenced Marc Andreessen’s “Tech Optimist Manifesto”: “The advanced, the educated... will control an artificial intelligence which surpasses human abilities.” (22:17)

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4. Policy Responses to Extreme Wealth (Past & Present)

Gilded Age to Progressive Era

• Antitrust Action:

  • Tim Wu: “The answer in the Gilded Age to the power of the great monopolies was antitrust... the idea was that monopoly was a deviation from how the economy should be and was very bad for workers, small producers and consumers… Standard Oil was broken into 35 pieces.” (26:17–26:29)

• Louis Brandeis’s Vision:

  • “He believed... you couldn’t be a proper citizen... if you were worked so hard you didn’t have enough time… to read, to think… The source of the... to really live as opposed to exist...” (27:28)

WWII, the New Deal, and the Birth of the Middle Class

• Post-War Redistribution:

  • Paul Krugman: “The middle class society that we had... did not gradually evolve... it was created in a very short stretch of time. As of 1939... almost as unequal as the Gilded Age. But by... 1946, we were pretty middle class. What happened? There was a lot of pressure for equalization… and also a public policy that strongly favoured unions.” (33:27)

• High Taxes on the Wealthy:

  • Gabriel Zucman: “In 1942... Roosevelt… proposed a 100% tax on all incomes above $25,000 [$2 million today]... They agreed on 94%... The idea is not to generate revenue. It's to say, this should not be acceptable... for people to earn just too much.” (35:58–36:34)

The Neoliberal Turn (Late 1970s–1980s)

• Economic Crisis & Policy Shift:

  • 1970s: Oil shocks, stagflation, unemployment—rise of “neoliberal” policies (deregulation, lower taxes, weakened unions).
  • Nick Hanauer: “That idea... Milton Friedman and some other guys cooked that up in the 1970s... There was no evidence for that... it benefited a small group of people that were mostly their friends.” (40:12)
  • “Trickle down theory... is still believed by some economists and governments.” (41:16)

• Education & Ideology:

  • “Academic economists came to believe... that the richer the rich get, the better off everyone will be... these ideas are still taught as if they were fact.” (41:35)
  • “When you hitch those ideas to the self-interest of the most powerful people... and weaponize those ideas into neoliberalism, that's where it gets evil...” (41:35)

• The Powell Memo:

  • Abigail Disney highlights this 1971 corporate blueprint to reshape public thinking: “It talks about going after universities, the judiciary, education, and making sure children thought a certain way about the economy…” (45:52)

• Thatcher & Reagan:

  • Thatcher’s slogan “there is no alternative” becomes economic dogma. (47:16–47:51)
  • Meanwhile, under Reagan: top marginal US tax rates fall from 70% to 28%; union power is eroded; “new giant firms would be rapacious and non-unionized.” (49:43–51:35)

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5. The Modern Billionaire Age: Social Impact & Cultural Shifts

• Collapse of the Middle Class:

  • Global move toward deregulation and wealth concentration after 1980.
  • Lars Osberg: “After 1980-81... massive increase in the income share of the top 1%... It takes a long time for these changes... to ripple through society... But I think we're seeing [the impact] now.” (52:39)

• Culture of Greed & Ostentation:

  • Abigail Disney: Remembers 1980s New York: “...wedding receptions where there was gold in the food... signals of power and wealth became aspirational for everyone… an animal spirit was unleashed on Wall Street at that time, and it’s never been tamed.” (54:04–55:30)

• Iconic 1980s Moment:

  • Gordon Gekko’s line “Greed... is good”—“in my theatre... there was an eruption of applause at that line.” (55:27–55:30)

• Societal Consequences:

  • Tim Wu: “We have not fully appreciated the level of economic desperation that is found around the world today and the sort of collapse of a lot of dreams. This decade is a dangerous one for human civilization.” (55:58)

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6. Notable Quotes & Moments

• Nick Hanauer, warning fellow plutocrats:

  • “So what do I see in our future? Today I see pitchforks... if wealth, power and income continue to concentrate at the very tippy top, our society will change from a capitalist democracy to a neo-feudalist, rentier society like 18th century France…” (04:07)

• Abigail Disney:

  • “There were people who were old-school plutocrats who really thought… a good healthy economy needed to have a handful of people at the tippy top and other people had to suffer.” (44:43)

• Mary Link, on historical wealth cycles:

  • "A kind of medieval middle class was born [after the Black Death]—the first of its kind in history." (10:53)

• Paul Krugman on plutocrat corruption:

  • “There was a lot of vote-buying… but they never tried to eliminate the constitution or empower federal agents to kidnap people off the street. Why are today’s plutocrats so much worse politically…?” (13:21–14:21)

• Tim Wu on technological power:

  • “If you think that control over human consciousness… is its own form of power, there’s nothing in the history of Standard Oil… that has real precedent in today[’s] activities.” (17:40)

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7. Key Timestamps for Crucial Segments

• 01:38–02:14: Experts state the fundamental democratic threat of extreme wealth.
• 07:47–11:23: Professor Alfani details cycles of inequality since the Black Death.
• 14:21–15:26: Krugman and others contrast today’s billionaires with historical elites.
• 17:10–22:17: Tim Wu explores Big Tech, consciousness, and “Social Darwinism.”
• 26:17–27:28: The invention and early triumphs of antitrust law.
• 33:27–36:34: How war, unions, and high taxes built the midcentury middle class.
• 40:12–41:35: Hanauer and others on the rise of neoliberalism and trickle down dogma.
• 45:52–47:12: Abigail Disney on the Powell Memo and the ideology of suffering/labor.
• 49:43–51:35: Reaganomics—taxes slashed, union power broken, inequality rises.
• 52:39–53:20: On Canada’s shift from equality to inequality post-1980.
• 54:04–55:30: Cultural change: 1980s Wall Street, ostentatious wealth, “greed is good.”
• 55:58 (End): Tim Wu and Nala Ayed reflect on the danger and collapse of dreams in today's billionaire age.

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Conclusion: Where Do We Stand?

The episode frames the current era—defined by record-making fortunes and political clout at the very top—as the product of deliberate policy choices and ideological shifts since the late 1970s. Guests warn that the resulting concentration of wealth threatens democracy itself and urge a return to an economy that prioritizes broad prosperity over unchecked accumulation. As the series continues, listeners are left with urgent questions on the future of equality, democracy, and the prospects for meaningful change.

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For further listening, find parts two and three of "The Billionaire Age" via the IDEAS podcast feed or episode show notes.

Transcript

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[Nick Hanauer]

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[Mary Link]

this

[Nick Hanauer]

is a CBC podcast.

[Jamie]

Hey, everybody, Jamie here. This year, a record number, 82 Canadians cracked Forbes's 2026 list of the world's billionaires. That's 82 out of a growing list of more than 3,000 billionaires, including 19 centibillionaires. That's people with a worth of $100 billion or more worldwide. We've never seen such an extreme concentration of wealth. Some economists argue the battle of the 21st century is between oligarchy and democracy. But how do we get here? Ideas is one of the CBC's longest running radio shows and podcasts. Right now they're releasing a new four part series called the Billionaire An Insider's look into the impact extreme wealth disparity has on society. Today. We think this is something front burner listeners will find interesting. So today we're bringing you the first part of the series. If you like it, you can find a link to parts two and three in the show. Notes. This is the billionaire. How did we get here?

[Paul Krugman]

We really are in many ways an oligarchy.

[Gabriel Zucman]

Now the main risk is to see oligarchy overcome democracy. That's the battle that we are in. You know, it's the battle of the 21st century.

[Mary Link]

I would like to argue that having a billion really constitutes a moral failure.

[Luca Chancel]

Current billionaires also appear to be, you know, standing out. They concentrate more power, more wealth. The amount of wealth concentration that we observe is unique. There is no historical comparison.

[Nala Ayed]

Welcome to Ideas. I'm Nala Ayed. There are more than 3,000 billionaires worldwide. The world's 12 richest billionaires currently hold more wealth than the bottom 50% of people on earth. That's 12 people versus 4.2 billion. And within a decade, it's predicted the world will have at least 5 trillionaires. But the rise in extreme wealth is facing pushback. A democratic socialist is now mayor of the financial capital of the world.

[Nick Hanauer]

Billionaires have poured millions of dollars into this race because they say that we pose an existential threat.

[Nala Ayed]

This is zoran Mamdani. In November 2025, just after being elected in New York City.

[Nick Hanauer]

And I am here to admit something. They are right. We are an existential threat to billionaires who think their money can buy our democracy.

[Nala Ayed]

And outrage against the unprecedented wealth and power of billionaires is spreading. Even a few at the top admit there is a problem.

[Nick Hanauer]

You probably don't know me, but I am one of those 0.01 percenters that you hear about and read about. And I am by any reasonable definition, a plutocrat.

[Nala Ayed]

American entrepreneur and venture capitalist Nick Hanauer, one of the earliest investors in Amazon.

[Nick Hanauer]

And tonight, what I would like to do is speak directly to other plutocrats, to my people, because it feels like it's time for us all to have a chat.

[Nala Ayed]

In a TED Talk he delivered back in 2014, he issued a warning to his fellow plutocrats that they have a choice. Taxes, as in pay more or face a major reckoning.

[Nick Hanauer]

So what do I see in our future? Today I see pitchforks, as in angry mobs with pitchforks. Because while people like us plutocrats are living beyond the dreams of avarice, the other 99% of our fellow citizens are falling farther and farther behind. Inequality is at historic highs today and it's getting worse every day. And if wealth, power and income continue to concentrate at the very tippy top, our society will change from a capitalist democracy to a neo feudalist, rentier society like 18th century France that was, you know, France before the revolution and the mobs with the pitchforks.

[Nala Ayed]

More than a decade after giving this warning, we asked Hanauer if he agrees that the battle of the 21st century is between oligarchy and democracy.

[Nick Hanauer]

I 100% agree. 100% agree. 100%. Yeah. Yeah. And oligarchy is winning.

[Nala Ayed]

Ideas producer Mary Link with part one of her series the Billionaire. How did we get here?

[Mary Link]

Did you see this coming? This sort of extreme wealth? The extreme wealth that we're seeing, the 0.01% say, would you have predicted this 20 years ago? We're going to be at this stage.

[Paul Krugman]

If you'd asked me 20 years ago whether we would be here, the answer is probably yes, because we'd already seen an explosion of economic inequality, of wealth at the top. By the late 1990s, we were already, if you like, an obscenely unequal society

[Mary Link]

by then, New York based economist and Nobel laureate Paul Krugman.

[Paul Krugman]

But if you'd asked me when I was growing up, or if you'd asked me when I was going to graduate school in the 1970s, telling you my age There I would not have expected it. This was, we were a middle class society once upon a time and this sort of thing just didn't happen.

[Gabriel Zucman]

It's been years in the making. Indeed, billionaire wealth has been skyrocketing since the 1980s.

[Mary Link]

French economist Gabrielle Zucman.

[Gabriel Zucman]

And it's one of the defining features of our time, this explosion of extreme wealth.

[Mary Link]

The 1% is projected to own an astonishing two thirds of all global wealth by 2030. To help counter this, Gabriel Zuckman is proposing a minimum tax on billionaires around the world equal to 2% of their wealth annually. In France, it's known as Le Zucman Tax.

[Gabriel Zucman]

An extreme concentration of wealth means an extreme concentration of power. The power to influence ideology, to buy media, to influence policymaking, the electoral process, everything. And so it conflicts just fundamentally without democratic ideals.

[Mary Link]

As of March 2026, the world is home to 19 centibillionaires, people who have a worth of $100 billion or more. But here's the thing. Concentrated wealth appears to have been the norm for most of human history. In the west, the harder, more empirical Data goes back 700 years. Guido Alfani is a professor of economic history at Bocconi University in Milan, Italy. And he's the author of as Gods Amongst Men, a history of the rich in the West.

[Guido Alfani]

When we take these seven centuries, we find only two phases during which wealth inequality really reduces by, by a large margin and remains relatively low for a relatively long period of time.

[Mary Link]

Okay, let that sink in. Only twice in the past 700 years of recorded history in the west was the pie more equally shared only twice. Once was a period that Paul Krugman earlier referenced when the middle class was on the rise from the late 1940s through to the 1970s. And the other occurred six centuries back in the 14th century with the Black Death.

[Guido Alfani]

So the Black Death was the terrible pandemic of plague, which begins in the Mediterranean area in 1347 and lasts until 1352. And the black Death in the Mediterranean area and in Europe, as far as we can tell, killed about half the population. So you kill about half the people, half the workers. And so a very important way through which the black debt induced a reduction in wealth inequality is by allowing for a very substantial increase in real wages. And you know, a nice way of saying this is that by killing the workers, the black debt gave to the workers who did survive. They gave them the opportunities to, to force their employers and the landowners to give them better conditions. So for a period, it's like the workers discover they have the knife in their hands and they are entirely willing to use it.

[Mary Link]

But there was a pushback to the workers demands by those in power, especially in European city states, and their attempts at resisting this.

[Guido Alfani]

We find the introduction of these laws, called in late in contralaboratores, the. So this translates to laws against the workers. And what this means is against the unreasonable requests of the workers. So the point is, you know, those who were in control of the city politics in that moment tried to prevent the workers from exploiting the situation to get better wages. And they tried to establish limits to what they can ask for. And the point is that this fails because workers, both in cities and rural areas, understand very well that they can simply move to another place and get better conditions there. So all these attempts fail. And we observe in the records an increase in real wages. And this allows more people, especially in the middling and lower strata, to acquire wealth even for the first time. Maybe they are able to buy the house where they live, the house which they were renting from before, or a little bit of land, maybe not a field, but just a small vegetable garden.

[Mary Link]

And a kind of medieval middle class was born, the first of its kind in history. Now, of course, the Black Death killed a huge number of rich people as well, and that meant massive fortunes were suddenly being broken up. Properties were being fragmented and some pieces of land were being sold off to the workers, who now had more purchasing power.

[Guido Alfani]

So the black debt creates a low phase in wealth inequality, which, according to the area, lasts for, say, 50 to

[Mary Link]

100 years, until the 1% figured out a way to grab more of the pie again. One way to make sure concentrated wealth did not get diluted was to change inheritance rules. So the wealth would now go to the eldest son, unlike before, when the estate was shared equally among the children, sons and daughters. And so when the next plague came and there were many more, the fortunes would stay intact. And also international trade became a major economic force, so there was less need for workers on land. And so for the next 600 years, we return to a profound concentration of wealth at the very tippy top. In fact, this concentration hits a pinnacle at the turn of the 20th century, during America's Gilded Age.

[Luca Chancel]

You know, we often say that one of the, or if not the richest man of all times was John D. Rockefeller in the 20th century with standard Oil. And he was immensely rich, you know, the first billionaire in dollars, French economist

[Mary Link]

Luca Chancel, co director of the World Inequality Lab at the Paris School of Economics.

[Luca Chancel]

But in fact, if we compare his wealth with how the rest of the population was rich at the time. Well, actually global billionaires today are significantly richer than Mr. Rockefeller himself. So the top billionaires today are of course richer in pure nominal terms as compared to John D. Rockefeller, but they're also richer in terms of what they can purchase and what they can buy and how far away they are as compared to the rest of the population. So this is really a novelty of the past 20 years.

[Paul Krugman]

Let me tell you what mystifies me

[Mary Link]

a bit about the Gilded Age economist Paul Krugman.

[Paul Krugman]

So we currently have a level of income and wealth inequality that is similar to what we had, let's say in the year 1900, which is a terrible thing. We should not. We were supposed to have matured past that kind of inequality. But we're back. What I find a little mystifying looking back is that as far as I can tell, the Gilded Age plutocrats did not try to destroy democracy, they corrupted it for sure. There were lots of politicians on the take. There were lots of elections that were swung by what amounted to vote buying. But they never tried to say, oh, and let's eliminate the Constitution and let's empower federal agents to kidnap people off the street. Why are today's plutocrats so much worse politically, so much worse as human beings than their predecessors? And I don't actually know the answer to that.

[Mary Link]

But you believe they are?

[Paul Krugman]

Oh, they are. I mean there was, you know, John D. Rockefeller was not a nice guy. A lot of negative stuff about him and Andrew Carnegie actually kind of was somewhat a nice guy. But I don't think there's a Elon Musk like figure in turn of the previous century America. And these days there's lots of them. The Tech Bros and the Wall Street Bros are just a species of malignant wealth that is something new in America. And I haven't figured out why it's happening, but I certainly am really disturbed that it is happening.

[Mary Link]

Do you know, Paul, I was going to call this. I've been meaning to do this series for a few years now. And a few years ago I was thinking of the title, which I'm not using now, the Modern Medicis, but the Medicis, even though they were corrupt and were the Pope and the head of the bank and political, I mean they gave to the arts. They're just not the same level of bad guys. I would say I'm sort of agreeing with you than the plutocrats of today.

[Paul Krugman]

And they also had decent taste.

[Tim Wu]

I mean, exactly.

[Paul Krugman]

I think Lorenzo de Medici would be Absolutely horrified to look at at Trump's furnishings.

[Mary Link]

And like the rich of Renaissance Europe who were actually forced to give back to society or be exiled, the Gilded Ages, Andrew Carnegie also gave back to society, albeit on a more voluntary basis. A multi billionaire by today's standards, Carnegie gave away nearly 90% of his money before he died. This isn't to say that Carnegie was a complete saint, of course, especially when you look at how he attained his wealth in the first place. He was a famous union buster and his workers often toiled 12 hour shifts seven days a week with one holiday per year on the Fourth of July. And he was one of the Gilded Age's so called robber barons who became astronomically rich through monopolies. In Carnegie's case, steel, J.P. morgan and finance, Cornelius Vanderbilt Railways and J.D. rockefeller Oil. Rockefeller's Standard Oil Co. Which was founded in 1870, controlled about 90% of domestic sales in the United States. In fact, Standard Oil is considered the world's first major industrial monopoly.

[Tim Wu]

Standard Oil sold various petroleum products and actually you can still make a lot of money that way. If you look at Saudi Arabia.

[Mary Link]

American Canadian lawyer Tim Wu teaches law at Columbia University in New York.

[Tim Wu]

And I'm not going to deny that that has its own power, but I think more powerful still is control over human attention and consciousness.

[Mary Link]

Wu was a special assistant to President Biden and oversaw the federal government's antitrust policy, especially when it came to big tech monopolies. His work, along with that of others led to the major antitrust cases before the courts today, which seek to break up or alter companies such as Google, Apple, Meta and Amazon. Wu says our current plutocrats beat the Gilded Age as tycoons in terms of power and control over society.

[Tim Wu]

You know, if you look at the average human in Canada today, I would say they have their face buried in either a screen or a phone for the majority of the day when not eating or sleeping. Although some people eat even when eating and I don't know about sleeping. But in other words, if you think that control over human consciousness and intention is its own form of power, I think that there's nothing in the history of Standard Oil or, you know, JP Morgan's activities that has real precedent in today activities. And if you add artificial intelligence to the mixture, if you add the idea of, you know, harnessing the mega farms full of servers and generating an intelligence which eventually becomes equal to or even surpasses human intelligence, you know, that becomes an entirely different kind of power and is different than the old fashioned economic power of the Gilded Age.

[Mary Link]

But one thing both eras share obscene displays of extreme wealth.

[Guido Alfani]

GUIDO alfanest the idea of conspicuous consumption was popularized and introduced by an American sociologist and economist, Thornstein Veblen, at the turn of the 20th century.

[Mary Link]

Thorstein Veblen was a well known critic of capitalism and author of the Theory of the Leisure class, published in 1899.

[Guido Alfani]

And he had in mind the kind of very visible consumption which is typical, or at least some of those who belong to the top of the wealth in the context of the American Gilded Age, the family, the Morgans or the Vanderbilt. And conspicuous consumption is basically a form of consumption in which the final end is to be seen consuming. It's a way of consuming which builds your social position. It's a way of consuming which is possible only for the very wealthy. And the point for Veblen is that in this game, they are kind of even forced to consume to these levels.

[Mary Link]

And these displays of conspicuous consumption are social signifiers, signs that you are not just of superior social standing, but actually a superior being.

[Tim Wu]

I think one of the ideas that's important to understand in this ideology of wealth is a movement in the late 19th century known as Social Darwinism, which believed that wealthy people in some ways were better than regular people, you know, that they had evolved into an advanced form of life. TIM wu and along the same lines, this movement believed that corporations were evolving into monopolies as opposed to having this sort of squabbling competition, that the future would all be about these magnificent companies, one per industry, scientifically organized. And that was an evolutionary trait. And that the smaller businesses, the small business people, normal people, were essentially being eliminated in a process of survival of the fittest. And the reason I mention that is if you look carefully at the billionaires of our time, outside of sort of external progressivism, there is at the heart of it this idea that something Darwinian is happening here, that artificially intelligent, gigantic companies are hunting out their competitors and destroying them. You know, not unlike the way that you see this in nature itself. Therefore, by this theory, someone like Elon Musk, and maybe this is why he has so many children, is an evolutionary process. And he's like the Ubermensch or the Superman. Some of this is explicit in Silicon Valley, is they're trying to create a race of supermen who are the wealthy, who have extended lives and will rule the future over the rest of us, who are kind of reduced to a more feudal like existence. Not to be dramatic or anything, no, I think it's actually, I mean, if you, I read this stuff a lot. And there's a strong current of evolutionary theory in our current state of inequality.

[Mary Link]

Tell me just a bit about that.

[Tim Wu]

Sure. You know, if I look, take a figure like Marc Andreessen, who's a wealthy venture capitalist in Silicon Valley, he's written this thing called the Tech Manifesto, the Tech Optimist manifesto. And it's basically a borrowing of Nietzsche and ideas about a race of supermen who are going to seize the future along with artificial intelligence. And you know, sort of naturally these are the wealthy, the advanced, the educated. And it occasionally says it wants to help all of humanity, but if you read between the lines, it's pretty clear that you have a future dominated by the few, the wealthy, and in some ways the evolved, who are undertaking a different level of capability and can live forever and will control an artificial intelligence which surpasses human abilities. So as bad as things are now, I think they actually could get worse. If you could believe it. If these evolutionary prophecies come true,

[Nala Ayed]

here's a small but startling fact. The words millionaire and billionaire may sound about the same, but just think about this. Counting to 1 million would take how long? Wanna guess? About 11 and a half days. Now guess how long it would take to count to a billion? About 31 and a half years. This is Ideas Ay Nala Ayed.

[Jamie]

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[Nick Hanauer]

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[Nala Ayed]

We return now to part one of producer Mary Link's series, the Billionaire. How did we get here? The Gilded Age was defined by ostentatious displays of wealth, parties lasting days and costing millions in today's crime currency, diamond tiaras and monster mansions with 70 or more rooms. But with World War I, it all came raining down on the Gilded Ages parade.

[Mary Link]

Early in the 20th century, the excesses of America's Gilded Age were becoming a societal flashpoint. People were angry that so much concentrated wealth lay in the hands of a few men with huge monopolies. But in 1911, the US Supreme Court took action, going after people like John D. Rockefeller and his energy behemoth Standard Oil, which controlled about 90% of the market.

[Tim Wu]

The answer in the Gilded Age to the power of the great monopolies was antitrust, which was a new invention at

[Mary Link]

the time, American Canadian legal scholar Tim Wu.

[Tim Wu]

And the idea behind it was essentially to rebalance the economy and make it fairer. The idea was that monopoly was a deviation from how the economy should be and was very bad for workers, small producers and consumers. And the antitrust movement sought to break up the major trusts and had a great degree of success in that trust being monopolists. So Standard Oil was broken into 35 pieces. The American Tobacco Trust was broken up, Movie trust. Most of the trusts were broken.

[Mary Link]

You often mention the writings of Louis Brandeis, who was Associate justice of the supreme court of the US from 1916-36, 1936. And he talked about what the right to life should mean. And he says the right to life should be understood as a right to live and not merely exist. Talk to me about that.

[Tim Wu]

Yes, Louis Brandeis is the guide we need for our age. In many ways, he was alive during a time in which the North American economy was transforming. And he could see that it was becoming a place that would be inhospitable economically for many of its people. He saw the displacement of small producers, small business, reasonably sized enterprises, medium sized, into these sort of faceless trusts that mainly benefited the financiers, people like JP Morgan or John Rockefeller. And he could see in particular that the modern industrial state was creating working conditions that were incompatible with, with human happiness and human autonomy. Two things that I really focused on that I think we have almost forgotten about were overwork. He believed that you couldn't be a proper citizen of a country if you were worked so hard, you didn't have enough time to leisure to take time with your family to read, to think that is the source of the. To really live as opposed to exist. He was very against this was, I think, really a point we've forgotten. Inconsistent work, erratic work, you know, being on and off the job in the sense that he felt it created this insecurity. People weren't really able to know where their next paycheck was coming from. And finally, you know, he really believed that we needed a lot of vacation time. He could see it all coming. He said that people should have at least, you know, a month off, a year minimum. And he didn't foresee both members of the family working. Obviously that's been good in some ways, but that we've sort of just accepted that you have to have two working adults in every family is a big jump. No, he saw this all coming and saw it as a threat to democracy, honestly, that people would be so overworked and not have enough room to really be the kind of citizens you need in the republic. So he's the guide I think we need right now. And he's a believer in a totally different kind of economy that has a lot of wealth and is rich, but has it scattered and owned by a lot of different people and with people in charge of their own lives.

[Mary Link]

But a thriving middle class would still be decades away. It starts to emerge around the time of World War II, a war that in itself is a stark lesson about concentrated wealth and the rise of authoritarianism, when the German economy was in the hands of an elite group of wealthy billionaires and their powerful monopolies. Tim Wu writes about this confluence in his book the Age of Extraction. You quoted the celebrated American lawyer and antitrust enforcer from the 1930s and 40s, Thurman Arnold, in your latest book. And he said that Germany became organized to such an extent that. That a Fuhrer was inevitable. Had it not been Hitler, it would have been someone else.

[Tim Wu]

Yes, I think the lesson linking the dangers of over monopolization, over concentration, and the rise of authoritarian or fascist government is best learned from the example of Germany, although Italy is not too bad either. In the German example, you had a nation, the Weimar Republic, which allowed the full cartelization and eventual monopolization of its economy. The Germans believed that they were making progress. They in fact, was justified as a sort of progressive scientific evolution towards having every sector of the economy run by a single company. And the end result was that by the early 1930s or even by the late 1920s, all of German economic leadership was a group that could be Gathered into a room. As you might predict, when the economic depression hit Germany, due to a loss of imports and exports and also finance problems, it crashed extremely hard. And because you no longer had a decentralized economy, the depression was maybe the worst in German history. And there was enormous chaos and a market for a leader who would promise to make Germany the power it once was and to reorganize industry and, you know, put everything right. Obviously, with the widespread suffering, there was a lot of receptivity to that message. But I think rather critically, because the German economy had been concentrated into few hands, when the German industrialists agreed that they would support Hitler, both politically and also in terms of campaign foundations, there was little grounds for resistance. All you needed was the agreement of, you know, seven or eight people and all men. And in fact, they had their own club. And I think while not the only reason for the rise of Hitler and the Nazi party, I think there was a lot of factors involved, including the depression and including other humiliations. That economic factor was a big part of it. And I think it shows the danger of concentrated economic power. Concentrated economic power can become political power, often naturally seeks to become political power. In our times, you see Elon Musk, after becoming wealthy, suddenly wanting to become a part of government. It repeats over and over again as one of the most dangerous things to human livelihood that there is the union between private power and public power.

[Mary Link]

After World War II, there was a reckoning of wealth concentration in Germany and elsewhere in the West. Economist Paul Krugman.

[Paul Krugman]

When we try to talk about the history of inequality, the first thing that you need to know is that the middle class society that we had, the one that I grew up in, did not gradually evolve as the country developed economically and so on. It was created in a very short stretch of time. As of 1939, as far as we can tell, we were still an economy almost as unequal as we were during the Gilded Age. But by the time, by 1946, 1947, we were a pretty middle class country. It happened just in the space of a few years. And what happened? Well, what happened was there was a lot of pressure for equalization, for shared burdens during World War II. So was the war and the controls that were established during the war, and also a public policy that strongly favored unions. And so we went from an economy of self dealing, CEOs and weak unions and a government that was really on the side of the wealthy, to being a society in which all of the forces had reversed, where we had strong unions and there was A lot of outrage at CEOs who overpaid themselves. And government favored a certain degree of not full equality, but equity in society. And lo and behold, just very quickly, we became a much more equal society,

[Mary Link]

both in North America, but also in Europe, where we developed social democracies, we developed welfare states. Belgium, Dutch economist and philosopher Ingrid Robins. We wanted to have, basically, you could say, the best of capitalism merged with the best of socialism. That was the idea of a mixed economy or the idea of welfare states. And in those years, we both saw a quite striking increase in the standards of living and the opportunities of the middle classes and also reduction in poverty. But we also saw a decrease in wealth inequality. One of the leaders of this new ideology was Franklin D. Roosevelt, who as the US President, brought a series of economic, social and political reforms in the 1930s called the New Deal, which included tax increases on the rich that continued throughout his presidency into the 1940s. French economist Gabrielle Zucman.

[Gabriel Zucman]

It's a very interesting history. There is this famous speech by Franklin Roosevelt in 1942, and he goes to Congress and he says, look, I think that no American should have an income after paying taxes of more than $25,000 of the time, you know, the equivalent of about $2 million today. Hence, I propose to introduce a 100% tax on all incomes above $25,000. Taxation is the only practical way of

[Mary Link]

preventing the incomes and profits of individuals and corporations from getting too high.

[Gabriel Zucman]

And then, okay, Congress people are a bit like stone age, like 100%. That's really a lot. But they agree on 94%. That's what they vote. And those quasi confiscatory top marginal income tax rates remained in place not only during World War II, not only during the subsequent Democratic administrations and under Truman, but also under Eisenhower, a Republican president. So there was really a consensus, and even, you know, until Reagan, the top marginal income tax rate until 1980s was 70% or more. You know, the US was, along with the United Kingdom, one of those countries who at mid century used the tax system essentially in a very, very progressive manner to regulate inequality, to try to say, look, to create something close to a maximum legal income. That's really the idea behind Roosevelt's speech. The idea is not to generate revenue. It's to say, this should not be acceptable in our democracy for people to earn just too much. It was not about revenue. It was about protecting democratic institutions against the power and the threats that extreme concentration wealth can pose.

[Mary Link]

Similar policies in Western countries, including Canada, imposed higher taxes on the wealthy encouraged more investments in social welfare and strengthened workers rights. All of which helped create again, for only the second time in 700 years, a great reduction in wealth inequality and a strong middle class. Paul Krugman that lasted.

[Paul Krugman]

What was really impressive was that although it was the product of extreme conditions, it was the product of World War II and everything that went with that. It lasted for 30 plus years. Then that whole thing unraveled, starting with

[Mary Link]

the 1970s economic crisis in the west, largely caused by the 1973 OPEC oil embargo and the 1979 Iranian Revolution, making the of oil quadruple. And all this resulted in stagflation, high unemployment and high inflation. French economist LUCA so basically 70s oil

[Luca Chancel]

shocks, inflation, employment was not going as well as it used to go in the US or in Europe.

[Tim Wu]

People who want to work but can't

[Nick Hanauer]

find jobs are part of today's other bad economic news. The unemployment rate soared to 8.2% nationwide last month.

[Gabriel Zucman]

How long have I been out of work?

[Mary Link]

Since June 20th of 73.

[Paul Krugman]

Have you ever seen it this bad?

[Tim Wu]

Yes, during the Depression.

[Luca Chancel]

There's also, you know, the end of reconstruction or of what some have called the golden age of growth in Western European nations, which was also benefiting North America, the US and Canada. And so the economies in maybe not as flourishing as it was. And some policymakers held by some very clever individuals. And several economists make the case that the reason of low growth or of an economy that's maybe not as good as before is because there are too many taxes and too much regulation in the economy. And this has been known very basically as the neoliberal turnaround.

[Nick Hanauer]

And that idea which is only, you know, it's 50 years old, Milton Friedman and some other guys cooked that up in the 1970s. You know, there was no evidence for that. There was just something they said because it sounded good. And it obviously benefited a small group of people that were mostly their friends,

[Mary Link]

venture capitalist and self described plutocrat Nick Hanauer.

[Nick Hanauer]

And the evil part, just to be clear about shareholder value, Max, isn't the idea that making rich people richer is good for the society, that the evil part is that if you don't do it, it will be bad for everybody. That's the, that's the evil part. And but you know, for a bunch of obvious reasons, that idea was incredibly attractive to very powerful people. And they mobilized around that idea. And now we live in a world where people actually believe it's true in the same way that two plus two equals four is true. And it's not true. It's no, it's no more true than Saying bedtime is 9:00pm yeah, it's a

[Mary Link]

trickle down theory, right, that the more the wealth make, their wealth is going to trickle down to the economy. And it's still, there are still economists out there and there's certainly governments who

[Nick Hanauer]

believe that, who absolutely believe that.

[Mary Link]

And why do you think, why do you think that there's such a hold on people, even for people it doesn't benefit.

[Nick Hanauer]

So there are two reasons why those ideas have such a hold on the world. The first is that that literally reflects what academic economists came to believe in the 60s 70s and 80s and they taught it in schools and that the richer the rich get, the better off everyone will be. So Democrats and Republicans alike took the same Econ 101 courses which by the way are still taught and learned these ideas as if they were fact. That's the first thing. So, so there's an element of this which is non nefarious. People were just wrong. But then when you hitch those ideas to the self interest of the richest and most powerful people in the world and you weaponize those ideas into an ideological narrative like neoliberalism, that's where it gets evil, right? That because to be clear, the chamber of Commerce, you know, they don't say things like tax cuts for the rich create growth or if you raise the minimum wage, it will kill jobs. They don't make those claims because they are true. They make those claims because they advance their interests because they're the most effective narratives ever devised for keeping wages low and profits high. Right.

[Mary Link]

You've written that the idea that growth cannot happen without enriching a narrow class is a self perpetuating idea. Can you expand on this more for me?

[Tim Wu]

Yes. So that is a big idea from the Post War late 20th century Tim Wu, that economic development, the development of wealth would inevitably require the creation of a concentrated wealthy class. There are many people who believed it pushed it. I think it is a mythology. It follows from the, the logic, I guess you'd say that you need to have wealth disparity and rewards in order to incentivize people to want to be rich in the first place and therefore have economic development. But you know, that tiny germ of truth, which is, you know that there are more incentives in a free market economy has been, you know, the centimeter of truth has been used to take the entire meter stick and justify kind of uncontrolled wealth concentration by a small group.

[Jamie]

I mean they have re educated the American Public in a. In a false and destructive way.

[Mary Link]

Abigail Disney is a film producer, philanthropist and social activist. And she's an heiress to part the Disney fortune. She is also a member of the Patriotic Millionaires, an advocacy group based in several countries, Canada, United States, uk. Pushing for higher taxes on themselves and other high net worth individuals in order to combat wealth inequality. Disney remembers when the middle class began to come under attack in the 1970s.

[Jamie]

There were people who were old school plutocrats who really thought that a good healthy economy needed to have a handful of people at the way at Tippy Top and other people had to suffer. And so in the 1970s they started to organize and they organized. Boy, did they organize. And you know, they launched into. If you go back and you read this thing called the Powell Memo, which you can Google.

[Mary Link]

I did Google it. The Powell memoir, formally called Attack on American Free Enterprise System, was a confidential document written in 1971 by Lewis F. Powell to the U.S. chamber of Commerce. Powell was an American lawyer who wrote the memo in part to counter the consumer activism of Ralph Nader. Powell believed Nader was pushing the country towards socialism and therefore a threat to capitalism and corporate America. The document would go on to influence the creation of prominent conservative think tanks such as the powerful Heritage foundation who published Project 2025, a 900 page plan to reshape the US federal government according to right wing policies.

[Jamie]

It's a remarkable document to read because he lays out a plan and you read it now and you think, my God, they did everything and they succeeded at everything in this plan. And so it talks about going, for instance, after the universities, going after the judicial branch, going after education in public schools, and making sure children thought a certain way about the economy, about the nature of what an economy is for. And I do think that the United States also has this very unfortunate history of chattel slavery. And if you look at the Industrial Revolution when big titans started to emerge based on their business doings both in Great Britain and in the United States, in the United States, much of the foundations of that economy were built by free labor, a subsidy for labor. And after enslavement was made illegal, what happened was that they still had an economy that depended on people to suffer for other people to get rich. And so that became the minimum wage worker or the worker who's just struggling to get by. I mean, I think people would swear on a stack of Bibles to you that there is no such thing as an economy without a significant number of people suffering.

[Mary Link]

Luca Jancel to go back to why

[Luca Chancel]

Was there this neoliberal Turnaround in the 80s? It's really because for decades, in fact, some actors were extremely influential in making a majority of the population think and believe that there was no alternative. But this idea of there is no alternative. So Thatcher's big main political line is politically constructed.

[Mary Link]

Margaret Thatcher became Prime minister of the UK in 1979. And just before she resigned in 1990, she had this exchange with a Labour MP. I give way to the honourable gentleman. There is no doubt that the Prime

[Guido Alfani]

Minister has in many ways achieved substantial success.

[Gabriel Zucman]

There is one statistic that I understand

[Mary Link]

is not, however challengable, and that is that over her 11 years the gap between the richest 10% and the poorest

[Guido Alfani]

10% in this country has widened substantially.

[Mary Link]

How can she say at the end of her chapter of British politics that she can justify many people in a constituency such as mine being relatively much poorer, much less well housed and much less well provided than it was in 1979? Surely she accepts that is not a

[Paul Krugman]

record that she or any Prime Minister

[Gabriel Zucman]

can be proud of.

[Mary Link]

Mr. Speaker, all levels of income are better off than they were in 1979. But what's the honorable member is saying is that he would rather the poor

[Tim Wu]

were poorer, provided the rich were less

[Mary Link]

rich, so long as the gap is smaller. You do not create wealth and opportunity that way. You do not create a property owning democracy that way. While Thatcher was claiming in this exchange that all levels of income improved, in fact during her 11 years in power, there was a record rise in income inequality. The amount of people living under the poverty line rose by nearly 50%. And across the pond, Thatcher had an economic soulmate.

[Paul Krugman]

And certainly if you look at the United States, the real turning point in inequality, you can see hints of rising inequality in the 70s, but it really explodes after 1980 when a guy named

[Mary Link]

Ronald Reagan was elected economist Paul Krugman,

[Paul Krugman]

and when corporations started feeling free to bust unions, or if they weren't actually breaking existing unions, felt free to engage in whatever tactics they felt like, some of them illegal. But nobody was enforcing the law to prevent unionization. And this removal of the outrage constraint on executive salaries and maybe other things, financial deregulation was a big deal. So it was really mostly a change in the political environment. If we ask, did this have to happen? Certainly we had a big decline in manufacturing as a share of the economy, although that was probably inevitable. It's mostly not actually globalization and all of that. Most of the decline in manufacturing was just because technology was changing. The nature of the economy was Changing, we were shifting to becoming a service economy. What did not have to happen was that the new sectors of the economy, the new giant firms would be rapacious and non unionized. You know, we think of manufacturing jobs as having been good jobs because General Motors was the biggest company in the US economy. It was also had the strongest union in the US economy, still has a union, not trivial, although they're weakened from what they used to be. But you know, these days the biggest employers are companies like Walmart and Amazon. There's absolutely no reason why they couldn't be unionized. But, but they got big in the post Reagan political environment when blocking the formation of unions was really easy for corporate management.

[Mary Link]

Ronald Reagan reduced taxes for higher income brackets from 70% to 50% in 1981. And then in 1986 he lowered them to 28%, the lowest level of taxes for the rich since 1931. Then after 1980s, you see that there

[Tim Wu]

is reduction in the taxation like and

[Mary Link]

this is prevalent everywhere globally.

[Paul Krugman]

Right.

[Mary Link]

Economist Nitin Baharti teaches at the University of Western Australia and he's a South and Southeast Asia coordinator at the World Inequality Lab. Because of competition across countries, each country

[Tim Wu]

is sort of reducing their tax rates.

[Mary Link]

And it's the same story in the US same story in European countries and same story in India where you see

[Tim Wu]

that after that the tax rate started going down. So indeed that has contributed in increase

[Mary Link]

in the wealth in the wealth of the top 1%. Canadian economist Lars Osberg remembers that shift as well. He's the author of the scandalous rise of inequality in Canada at the time,

[Tim Wu]

back in 1980, 81, there had been a long period of economic growth in Canada, but distributive shares had remained relatively constant.

[Mary Link]

And Canada, like other countries, had a thriving middle class.

[Tim Wu]

It was after 1980-81 that you saw this massive increase in the income share of the top 1%. So we certainly did not move in the direction of a more equal income distribution. We moved in the direction of more unequal income distribution. And it takes a long time for these changes in income distribution to ripple through the rest of society in their impacts. But I think we're seeing that now.

[Mary Link]

Abigail Disney remembers signs of the 1980s that foreshadowed our current billionaire age.

[Jamie]

Well, I moved to New York in 1984 and 1984 was, you know, the height of the Reagan administration. And Reagan had, you know, kind of unleashed a certain kind of attitude. You know, one of his first speeches was the New York Stock Exchange

[Nala Ayed]

with

[Tim Wu]

tax reform and budget control.

[Mary Link]

Our economy, economy will be free to expand to its full potential, driving the

[Tim Wu]

bears back into permanent hibernation.

[Mary Link]

That's our economic program for the next four years. We're going to turn the bull loose.

[Jamie]

And there's no more of a bro culture than the New York Stock Exchange or the commodities floor. So, you know, the investment banking world is still dominated by men, but then was even more dominated by men. And there was a kind of permission given, you know, when Nancy Reagan sort of denigrated her predecessor, Rosalynn Carter, as being too frumpy and too homey. And she started having these really extravagant gowns and entertaining extravagantly and fixing up the White House to look very, very wealthy. They were importing an ideology in the form of style. That was a new development. And so it burbled down into New York, and you started going to wedding receptions where there was gold in the food, you know, and you start. I mean, things were ridiculous really quickly. And so expensive watches, all the things that you use to display and to signal your power and your wealth were taken on as aspirational things. People wanted to signal wealth because they wanted to be wealthy and they were going to do whatever it took to get there. I had a hedge fund manager friend say to me that he was there also when Wall street was released. And Gordon Gekko, who's the villain of the film, says, greed, for lack of

[Mary Link]

a better word, is good.

[Jamie]

That line was meant to get boos and hisses. But in my Theater in 1987 in New York City, which was filled with bros. Goldman, Sachs Bros. There was an eruption of applause at that line. And my hedge fund said to me, I believe an animal spirit was unleashed on Wall street at that time, and it's never been tamed.

[Mary Link]

American Canadian legal scholar Tim Wu.

[Tim Wu]

Why have we set up a system that allows individuals or companies to accumulate grossly more money than is possibly necessary for them to live, not alone that, but for them to buy or spend in their lifetimes. What kind of system is that? I think we have not fully appreciated the level of economic desperation that is found around the world today and the sort of collapse of a lot of dreams. And yeah, I think this next this decade is a dangerous one for human civilization.

[Nala Ayed]

You just heard part one of a documentary series by Ideas producer Mary Link called the Billionaire Age Technical Production. Emily Chiaravasio and Pat Martin. Lisa Ayuso is the web producer of Ideas. Senior producer Nicole. Greg Kelly is the executive producer of Ideas. And I'm Nala Ayed.

[Jamie]

That was the first part of the Billionaire Age from Ideas. If you like what you heard, parts two and three are waiting for you right now. Just search for ideas or click the links in our show notes. Thanks for listening.

[Mary Link]

For more CBC Podcasts go to CBC CA Podcasts.