My notes on Davies, W. (2017). Elites without hierarchies: Intermediaries,‘agency’and the super-rich. In Cities and the super-rich (pp. 19-38). Palgrave Macmillan, New York.

Who are the super-rich, and what do they want? This is the question which a thought provoking paper by Will Davies begins with and it’s one which has preoccupied me in recent years. Our statistical understand of the super-rich has increased in recent years but this increased knowledge leaves a range of sociological questions which need to be addressed:

What do they want to do with all that money, other than protect it, grow it and pass it on to their children? Do they want political power, and if so, of what kind and to what end? Or do they employ it culturally, to achieve their own modes of Bourdieusian distinction from the other 99.9%? (pg 2)

For a Millsian approach to elites, the question is which political, cultural or military  institutions are they gravitating towards in pursuit of power? For the Marxist approach, it’s a question of shared interests, their collective consciousness of them and self-organisation in pursuit of them in relation to other classes, as well as the tools of exploitation leveraged in this process. Davies agrees with Mike Savage that these aren’t necessarily the right questions, summarising his argument that we need to take money seriously as money (rather than assume it is waiting to be converted into power, with the assumption elites are intrinsically political) and must adequately describe capital before we can theorise it (rather than apply pre-existing categories to incomplete or outdated descriptions of our object).

What is this object? Is it a class? Is it a group? To what extent is it open or closed? To these challenges Davies adds another one: “the need to avoid wholesale methodological individualism, while recognising the deeply personal and individualised nature of the relationships and strategies that appear to structure the lives of the super-rich” (pg 3). Piketty’s contribution is to reorientate analysis way from the labour market and towards the family. But this is difficult because knowledge is partial and the super-rich is secretive. In order to addresses these challenges, Davies suggests we study intermediaries: agents working on behalf of the super-rich who represent their interests. By focusing on agency, in the sense of one party being contracted to represent the interests of another, it is possible to response to Savage’s challenges and move the study of the super rich forward.

He draws on Simmel’s account of money as a teleological vacuum, a pure means which extends beyond every possible use to which it can be put, connecting this to the ambitions of the super-rich. Piketty’s insight about the increasing importance of unearned wealth in the economy, as well as Dorling’s recognition of the professional classes now being subsumed into the 99%, yield a sense of the super-rich as breaking away. As he puts it on pg 6, “To break free of the bounds of culture, politics or technological limits becomes a teleology in itself, the same anti-teleology that Simmel identified as the metaphysical nature of money”. This is tied to a phenomenology of valuing money as “a state of arbitrariness, where money can be experienced as perfect liquidity, without friction” and “extreme form of negative liberty that lacks all normative restraint and relationship only to the future” (pg 16).

The problem of agency is key if we wish to avoid taking this analysis too far, with their insulation depending on the capacity of agents to represent the interests of the super-rich to the wider world. He summarises this as a theoretical approach on pg 8:

In this spirit, I want to propose a theoretical device which may help to shape a sociological approach to the super-rich – principle-agent problems. In particular, I suggest that we can think of the relationship of the super-rich to domains of power, culture and production as a series of principle-agent problems, in which they seek a form of representation which absolves them of the need to become involved in matters of public concern or controversy.

Principle-agent problems rest on the “paranoid methodological individualism” associated with game theory, with the primary challenge being to ensure the agent does not use their position to pursue their own private interests rather than those of the principle they are representing. Interestingly, this is the rationale for stock options for executives, theoretically encouraging them to act in pursuit of shareholder interest by making them a shareholder. But as Davies notes, the fact executive renumeration has risen more quickly than the stock market suggests it actually makes the agency problem worse.

This ties to a broader ambiguity about their position, as “symptoms of the deep-lying ambiguity surrounding the corporate form generally, which is neither a piece of private property nor a political association, but flips from one to the other as it suits” (pg 9). Training as professionals has been one solution but managers lack the monopoly over a specific domain of knowledge typical of professionals and their connection to the public interest is tentative and contestable. Techniques such as edit and credit rating were introduced to address this ambiguity but this introduce their own problem of agency, at least if the rating agency is paid by the company it rates.

This sociological reframing of the principle-agent problem “is a particular way of
representing the interface of politics and economics” (pg 11). If I understand him correctly, economics is insulated from politics by outsourcing normative evaluation to agents; capital can float free of controversy because the evaluation, justification and debate takes place at a distance through the mediation of ratings agencies, auditors, central bankers and policy makers. It is a form of “moral under-writing – declaring that activities are transparent and trustworthy, sometimes when they are not” (pg 15). The same analysis can be applied to the growth of family offices whose purposes is to “save super-rich families from having to engage in public situations (getting a child into a school, handling tax, booking a restaurant table, managing property) which may involve any form of antagonism” (pg 11). Whereas professionals once anchored capital in the public sphere, now they facilitate its escape.

He uses this to make the fascinating argument that the super-rich may benefit from further neoliberalisation, but it’s unclear how actively they are supporting it. Agency in this sense allows them to avoid becoming a class-for-itself, highlighting a micro-social disjuncture between the economic and the political which prevailing concepts of ‘neoliberalism’ are unable to capture. As a project it “required considerable solidarity and reflexive self-understanding on the part of capitalists and ideologues themselves, through think tanks, lobbying bodies, political parties, philanthropic networks” (pg 14). But if I understand correctly, its success has eroded the conditions which made the is possible while also making it less necessary than was once the case. In its place, we have increasingly complex webs of “non-hierarchical, non-exploitative dyadic contractual relations” (pg 15) which often overlap within super-rich networks in which intermediaries have become full members over the preceding decades. It follows from this that the problem is not wealth corrupting politics, as much as “how wealth is kept entirely separate from politics and public life, through strategic acts of delegation, where the delegate is also a delegator” (pg 15).

My fascination with the technological fantasies of billionaires might seem like a peculiarly nerdy version of a familiar preoccupation with the super rich. However as Yuval Noah Harari observes on loc 3304 of Homo Deus, the dreams of technological salvation which the rich and powerful invest themselves in have important consequences for the rest of us because they condition how these groups orientate themselves to the existential risks which we all face:

How rational is it to risk the future of humankind on the assumption that future scientists will make some unknown discoveries? Most of the presidents, ministers and CEOs who run the world are very rational people. Why are they willing to take such a gamble? Maybe because they don’t think they are gambling on their own personal future. Even if bad comes to worse and science cannot hold off the deluge, engineers could still build a hi-tech Noah’s Ark for the upper caste, while leaving billions of others to drown. The belief in this hi-tech Ark is currently one of the biggest threats to the future of humankind and of the entire ecosystem. People who believe in the hi-tech Ark should not be put in charge of the global ecology, for the same reason that people who believe in a heavenly afterlife should not be given nuclear weapons.

As a Guardian article last year put it, “Among the tech elite, space exploration is now the ultimate status symbol“. This reflects the ascendancy of a distinct elite, with converging dispositions reinforced by the peculiar niche within which they have accumulated their wealth and power. There are cultural and biographical explanations we can offer of their preoccupations, as well as sociological ones of how these ambitions spread amongst this intensely self-referential group of elites. However it also worth inquiring into the potential consequences of this passion given the control these people have over the future direction of technological development and the opportunity costs they confront in doing so:

Musk, who founded SpaceX in 2002, is arguably the most visible billionaire in the new space race. The apparent inspiration for Robert Downey Jr’s Tony Stark character in Iron Man, Musk has become a god-like figure for engineers, making his fortune at PayPal and then as CEO of luxury electric car firm Tesla and clean energy company Solar City. Yet it is his galactic ambitions, insiders say, that really motivate him. “His passion is settling Mars,” says one.

When pondering this stuff, it’s hard not to wonder occasionally if you’re being overly cynical, throwing sand at people seeking innovations which could transform human life. But when I hear Jeff Bezos say that “You go to space to save Earth” I feel renewed confidence this is something we ought to critique. If these investments fail then our engineering philosopher-kings have wasted countless billions of dollars pursuing the endless frontier which could have been better spent improving our life here on earth. If these investments succeed then what does this mean for those left on earth when the super-rich go to space?

A really insightful Paul Krugman article on a topic I’m getting increasingly fascinated by:

Wealth can be bad for your soul. That’s not just a hoary piece of folk wisdom; it’s a conclusion from serious social science, confirmed by statistical analysis and experiment. The affluent are, on average, less likely to exhibit empathy, less likely to respect norms and even laws, more likely to cheat, than those occupying lower rungs on the economic ladder.

And it’s obvious, even if we don’t have statistical confirmation, that extreme wealth can do extreme spiritual damage. Take someone whose personality might have been merely disagreeable under normal circumstances, and give him the kind of wealth that lets him surround himself with sycophants and usually get whatever he wants. It’s not hard to see how he could become almost pathologically self-regarding and unconcerned with others.