Former Citigroup CFA and coiner of "plutonomy" Ajay Kapur
In my surprisingly arduous attempt to find 2007 revenue figures for Citigroup yesterday, I ran across something called the plutonomy report. Back in 2005, Ajay Kapur—then CFA of Citigroup—produced this industry note describing investor and consumer behavior in economies where a very small portion of the population controls a very large portion of national wealth. He called such economies plutonomies. “The world is dividing into two blocs,” Kapur writes—“the plutonomy and the rest.” He lists the United States, Canada, Australia and the UK among the plutonomy nations and puts continental Europe and Japan “in the egalitarian bloc.” Here in plutonomy country, “the rich absorb a disproportionate chunk of the economy” and therefore hold primary influence over aggregate indicators like savings rates, account deficits, consumer spending, et cetera. In 2006, Kapur produced a follow-up to the first plutonomy report, in which he argues that plutonomy countries,
have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries…the tech whizzes who own the pipes and distribution, the lawyers and bankers who intermediate globalization and productivity, the CEOs who lead the charge in converting globalization and technology to increase the profit share of the economy at the expense of labor, all contribute to plutonomy.
It’s a controversial argument, especially from a bank that defrauded consumer investors to enrich itself and a billionaire hedge fund manager the following year. People would probably get angry about it, except the second plutonomy report has been steadily disappearing from the interent since it leaked.