Recently, I happened to watch an interview on a major television news channel with Donald Trump, the American celebrity-businessman. The interviewer carefully approached the topic of the current economic crisis. She delicately approached the question of how the recession has affected Trump’s enormous real estate portfolio and other business interests. With all the sincerity of someone asking about a recent death in the family, the interviewer expressed her regret about the current downturn in the economy and its affect upon Trump’s empire.
Donald Trump could hardly wipe the smile off his face. He began by admitting that he had, on some investments, taken quite a loss. However, he quickly began telling stories of how he has been able to quickly snap up properties and other assets at a fraction of the cost they would have been two years ago. Credit must go to Mr. Trump for his honest answer – here is a man making the most of the current economic crisis.
The interviewer’s naivety was based on the assumption that an economic recession affects everyone in the same way. Indeed the rich could suffer the most, as they have the most to lose. In reality, during periods of recession, particularly when there is a significant drop in real estate prices, those with substantial equity can act like the proverbial kid in a candy store. No politician knows for certain how to encourage banks to restart lending, and no economist can say how long this crisis will last. What is certain is that this crisis will only accelerate the increasing inequality between the super-rich and the rest, which has been rising dramatically during the last 30 years. The old and tired adage that ‘all boats rise’ in a capitalist economy is looking increasingly misguided and dangerous. Defenders of the social consequences of a laissez-faire capitalism would argue that the concentration of wealth in the hands of a few makes possible acts of great generosity. Dinesh D’Souza, in The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence (Free Press, 2000), makes this clear in the question, “Who has done more to eradicate poverty and suffering in the Third World, Bill Gates or Mother Theresa?” D’Souza’s answer is emphatic: the founder of Microsoft, not the founder of Missionaries of Charity. The same logic is applied to the argument that the best (i.e. most ‘effective’) political structure is benevolent dictatorship. Unfortunately, the twentieth century proved to be the most striking illustration of Lord Acton’s dictum: “power corrupts, absolute power corrupts absolutely”. If the concentration of power caused great distress in the twentieth century, it seems at least worthwhile to question whether the concentration of wealth will do the same in the twenty-first.
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