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April 2, 2013
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A recent
article from Vanity Fair
paints a curious picture of London’s well-heeled Knightsbridge, a
neighborhood of quaint Victorian houses and elegant hotels serving high
tea. Today, a ginormous complex of concrete and metal towers looms
above; a development some call the world’s most exclusive address.
Though London has long been a place where the cops don’t even carry
guns, security is the watchword at One Hyde Park: high-tech panic rooms,
bulletproof glass and “bowler-hatted guards trained by British Special
Forces” offer residents the promise of perfect safety and privacy in
luxurious surroundings.
Only, nobody really lives there. At night,
the building is nearly pitch-dark despite the fact that most of the
units have been sold.
The story of who bought these apartments and
why reveals the complex dynamics of a tectonic economic shift that is
creating a bumper crop of billionaires in the Third World as the
austerity-strapped First World stagnates. This year,
Forbesmagazine’sannual list of billionaires
included the first recorded in Angola, Nepal, Swaziland and Vietnam.
Japan, once second in the number of billionaires, has been left behind
by Russia and China. Europe long boasted the most billionaires after the
U.S. but the Asia-Pacific region has taken off and may soon leave
Europe in the dust. Today it is home to 386 10-figure fortunes (a decade
ago, there were only 61). The world’s wealthiest person is a
Mexican telecom mogul, Carlos Slim.
Vanity Fair
reports that many of the apartments at One Hyde Park are owned by
people who don’t want their identities revealed, people who hide behind
the names of odd-sounding corporations registered in tax havens like the
Cayman Islands. Others are Russian oligarchs, Chinese moguls and a
Nigerian telecom tycoon. Rinat Akhmetov, the Ukraine’s 16 Billion Dollar
Man, is a typical buyer. Attracted to London’s lax regulation and weak
enforcement of things financial, these plutocrats are looking to protect
their stratospheric fortunes and hedge against unpleasantries that
might develop at home.
What appears to be a story of real estate
is really a tale of offshore financing and a new class of global elites
creating the ultimate gated community. As Britain and other First World
countries sink into the mire of austerity, a tsunami of unfettered
capitalism is spreading over the Third World and the BRIC countries
(Brazil, Russia, India and China). Headlong capitalist growth tends to
create instability and a growing trend of authoritarianism. Many of the
new elites are living under semi-dictatorial regimes, and they need safe
havens in the event of a collapsed government or a dictator who decides
to give them the boot. They require real estate as insurance against
economic catastrophe.
You might call them the Billionaire Doomsday
Preppers. Preparing for an economic or political collapse of the world
as we know it is no longer reserved for paranoids living in flyover
states who stockpile canned goods. The new 1 percenters are worried
about a day of reckoning, too, and they're scouring the globe for places
to stash cash and putting their trust in First World security in the
increasingly likely event of Third World meltdown. Big money has got a
bug-out plan.
These survivalists are also
turning their attention to New York:
the daughter of Dmitry Rybolovlev, a Russian potash fertilizer mogul,
recently snapped up the penthouse at 15 Central Park West for a
jaw-dropping $88 million. Miami is another popular choice, a favorite of
Brazilian barons. The
New York Times reports that economically
distressed First World cities like Milan and Dublin will join the
roster of “core European targets” for the new plutocrats.
Political
and business elites in the U.K. and the U.S. have helped create global
economic instability and continue to push for austerity-driven policies
that hold down growth at home. But, as always, it’s the population that
gets to live with it. The new wave of 1 percenters are driving up the
price of real estate in the most desirable neighborhoods, edging out
middle-class and upper-middle-class residents. If you see the price of
your favorite restaurant meal in Manhattan going up, you can thank the
Ukrainian plutocrat next door. Or wherever he is. The rates for high-end
services like personal trainers and housekeepers will likely increase.
(Escorts, too, probably). Whatever the freshly-minted rich want more of,
everyone else will pay more for.
For the Billionaires Survivalist Club, there’s no place like home, someplace else.
Lynn Parramore is an
AlterNet senior editor. She is cofounder of Recessionwire, founding
editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt
in Nineteenth-Century Literary Culture." She received her Ph.d in
English and cultural theory from NYU. She is the director of AlterNet's
New Economic Dialogue Project. Follow her on Twitter @LynnParramore.
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