WEALTH SECRETS OF THE ONE PERCENT
A Modern Manual to Getting Marvelously, Obscenely Rich
Sam Wilkin
Little, Brown
423 pages (illustrated); $28
From all appearances, Sam Wilkin's Wealth Secrets of the One Percent could not be more timely.
The book, its jacket copy explains, arrives "when 1 percent of the world's population owns half of its wealth." Stipulated. "Sam Wilkin uncovers the economic principles that enable a fortunate few to get really rich." I'm game.
Inside, we discover that Mr Wilkin, a senior adviser to Oxford Economics, a research consultancy, is a knowledgeable guide to the world's greatest fortunes, from those built during the Roman Empire through America's Gilded Age to the Internet boom. His ruminations on how these fortunes were made are offered in thoughtful, playful prose that, the marketing materials promise, are supposed to read like "Freakonomics meets Thomas Piketty's Capital in the Twenty-First Century?"
After I finished the book, however, one problem nagged at me:
I do not understand what this book is supposed to be.
Here's what I mean. Mr Wilkin takes almost 400 pages to identify the "wealth secrets" of business titans such as John Rockefeller, Andrew Carnegie and Bill Gates.
These are his major conclusions:
First, many of the world's richest people created their fortunes by changing the rules - more on this in a moment.
Second, others did it by entering businesses with little or no regulation. Or by creating businesses in countries with little or no regulation.
Third, and most important, they did it by creating monopolies for themselves, and by ruthlessly eliminating any and all possible competition.
Many years ago I interviewed F Ross Johnson, the chief executive officer of the bygone conglomerate RJR Nabisco. Mr Johnson had a pet phrase he used for these kinds of insights: "BGO," which stood for "blinding glimpse of the obvious."
I don't mean to be too hard on Mr Wilkin. He is a pithy economist, which can't be easy, and he seems to understand that none of this is to be taken too seriously. In his notes, Mr Wilkin says, "Whether you read the book as a guide to earning great riches or a social critique is your choice." Ah. Both. I think.
Several parts of the book certainly qualify as original. Take Chapter 2, "Wealth Secrets of the Ancient Romans." (First subhead: "Roman Bling.") Here, in 36 pages, littered with anecdotes of Roman orgies and ephemera, Mr Wilkin describes how Marcus Crassus - yes, that Crassus - built one of the greatest Roman fortunes by choosing the winning side in a civil war, eradicating his political opponents and then seizing their assets. He did this by exploiting laws and devising new ways to profit from slave labour.
I'm not entirely certain how many students down at Wharton business school are emotionally prepared to win a Roman civil war. In all seriousness, though, if this is meant as social critique, yes, well, a lot of rich guys play dirty. Is that the point?
Mr Wilkin's book climaxes with Chapter 7, "Seven Secrets of Spectacularly Rich People." I suspect several of these might draw a rude comment from F Ross Johnson.
Secret No. 1: "Don't be the best. Be the only." Here Mr Wilkin tells the story of the Thurn and Taxis European postal monopoly and how it crushed a potential rival in the 17th century. "Growth isn't the ultimate achievement of business strategy," he writes. "Having one's competitors hanged is the ultimate achievement of business strategy."
Secret No. 2: "Bigger is still better." In this section Mr Wilkin concludes that monopolies and economies of scale are wonderful ways to make money. Well, yes.
Secret No. 3: "The worst place to do business is really the best." In other words, it's easier to make big money in countries with corrupt regimes, such as post-Soviet, '90s-era Russia, or in a fledgling third-world country. Memo to Wharton grads: Somalia now open for business!
Secret No. 4: "When lenders can't lose, you win." This summarises a section in which Mr Wilkin retells the familiar story of how too-big-to-fail banks get bailed out.
Secret No. 5: "You've got to own it, baby, own it." It's good to own property. My father told me this when I was nine. I'm sure Schopenhauer's did as well.
Secret No. 6: "Spin laws into gold." On the importance of creating helpful laws, especially those too complex for others to fully understand.
Secret No. 7: "If you want to succeed in business, network, network, network." Wherever possible, control all related networks, such as supply and transportation.
Several times I wondered whether Mr Wilkin was attempting to chart some groundbreaking new wealth analysis and coyly disguising it as something else. But there's no new data or real theories here I could identify. Rather, most of the book reads like a familiar history of rich guys gone wild, as told by your garrulous economist uncle.
Which is all a bit of a shame. The book starts with just such an example, the fall of the electronics retailer Circuit City. Mr Wilkin traces its decline to a series of ruinous long-term building leases signed years before. If he had stayed on this path, the book might have been useful.
Remember Tom Cruise as the budding entrepreneur Joel Goodson in the movie Risky Business? I can imagine Joel and his friends leafing through Mr Wilkin's book and gleaning real life lessons. (Crassus! Dude! He cut off this guy's head! So cool!) But the rest of us? Those of us who are forced to step away from the white tower of macroeconomics and find actual ways to try to build our fortunes? Pass.
© The New York Times News Service
