If you watched the royal wedding, you’d be tempted to think of Britain’s social order as immutable. While the bride’s background introduced a degree of diversity, the image of Britain as hereditarily hierarchical seemed to be alive and well.
Reality, though, is different. The tectonic plates have shifted significantly over the past half-century, transforming what was once a society dominated by inherited wealth into one where serious money is increasingly in the hands of those who made it – or made most of it – themselves.
London’s Sunday Times began chronicling this almost 30 years ago.
Lacking access to bank accounts and opaque privately-held companies, the Times’ methodology isn’t perfect. But it purports to be a comprehensive look at what it calls “identifiable wealth.” In other words, land, property, significant shareholdings in publicly quoted companies, art and racehorses.
In the inaugural 1989 survey, only 43 per cent of the richest were self-made by the Times’ definition of the term. Back then, “the surest way to a fortune was to be a landowner – preferably with a title.”
That, however, has changed dramatically.
To quote from the 2018 update, “Inherited wealth and old money have been all but banished from the 30th annual Sunday Times Rich List.” Now, a stunning 94 per cent of Britain’s richest made their money themselves. Although still immensely valuable, land ownership no longer holds the keys to the kingdom.
Philip Beresford compiled the Times list until his 2016 retirement and he believes former U.K. prime minister Margaret Thatcher played a critical role in this transformation. Describing the creators of new wealth as “Thatcher’s children,” he puts it this way: “She poured the concrete for the foundations of the entrepreneurial wealth on which the modern Rich List is built.”
Jim Ratcliffe, who spent the earliest years of his life in a north of England council house, is a prime example. In the Times’ estimation, he’s the richest person in Britain.
Ratcliffe studied chemical engineering at the University of Birmingham in the early 1970s and got fired from his first job when the results of his employment medical indicated eczema. The company – British Petroleum – wasn’t going to “spend money on training you for five years and then find you’ve got an allergy.”
Several jobs and an MBA later, Ratcliffe did a spell with a venture capital company. There, in the words of a Times profile, “the two elements of Ratcliffe’s business strengths fused – the love of manufacturing facilities blended with the thrill of the deal.” Just shy of his 40th birthday, he went into business for himself.
Ratcliffe’s method is to acquire corporate cast-offs and turn them around. Looking for value, he seeks out businesses that are “unfashionable or unsexy, facilities owned by large corporations where you’d know they would be sloppy with the fixed costs. We’d run them a bit better, reduce the costs, make them busy and over the cycle they are very profitable.” Today, his chemicals company employs 18,500 people in 22 countries.
Ratcliffe isn’t alone. Not by a long stretch.
There’s James Dyson, inventor and manufacturer of the bagless vacuum cleaner. And Penny Streeter, who had a brief experience as a homeless mother of three before founding a medical staffing recruitment firm. And Carol Kane, who left school at 18 as a north of England working-class girl with a flair for design and subsequently co-founded an online fashion retailer.
I could list others, but you get the point.
In a significant sense, a society facilitating that kind of opportunity is a healthy one. It provides an environment where talent can be exercised, dreams chased and ambitions realized. It also revitalizes the economy’s upper crust with fresh blood.
But while such a society is more egalitarian in terms of opportunity, it’s not conducive to greater equality of results. Nor does it necessarily imply an increase in aggregate social contentment.
In a permeable socio-economic world, the talented, the driven and the lucky can rise towards the top. And if it’s a market economy, the social value their activities generate will also personally enrich them.
Not everybody, however, is particularly talented or driven. And we can’t all be lucky.
For some – perhaps many – the older order had its merits. If everyone knows and generally accepts their place, there’s a certain social tranquillity.
Mind you, ennui might be an alternative descriptor.
Pat Murphy casts a history buff’s eye at the goings-on in our world. Never cynical – well, perhaps just a little bit.
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