Money is a force that shapes our mentalities and the models we use to understand how the world around us works. When today’s global wealth surveys display images of green shoots and graphs with sharply rising lines, it is easy to forget that the financial crisis of 2008 was considered to present a near existential threat to the capitalist system. Instead, that threat was diverted, towards the vulnerable through public cuts and austerity programmes. The arrogance that so often goes with wealth and power appears as a particular insult to those forced to endure the government-sponsored collapse of public services and spaces.
Many of these issues are delicately interwoven, but a lot of the changes brought to the city by the rich and powerful are quite blatant. As we will see in this book, much of the form and function of London has been modified by large houses, skyscrapers and megaprojects, while the needs of the rich for luxury and personal security have transformed the look and feel of the city as their homes become fortified and their streets secede from the city’s public realm. This gathering point of super-affluence, a great wen of wealth, grants visibility and superficial legitimacy to the insanely unjust reward system that the global economy has generated and to the kind of city for the few that this brings with it. As will already be clear, the mark of the alpha city should be considered less a badge of honour and more a source of concern. But let us start to dig a little deeper.
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The world’s ‘top’ cities have got where they are less as a result of hard work and more because of the accidents of history and locational advantage. Despite the myths pinned to effort, entrepreneurial brilliance, strategic know-how and various other unrivalled qualities, the reality is that many of the features supposedly unique to the world cities are of course also offered by others. Nevertheless, a confluence of historical, cultural and colonial factors have undoubtedly contributed to London’s near-alchemical success. These factors include its fortunate position at the midpoint of global longitudinal time zones (Greenwich Mean Time), and a national history of imperial expansion that generated enormous wealth, bolstered more recently by its dominance of the global finance economy for at least three decades, alongside Tokyo and New York.
London is an enormous honeypot of personal wealth: in 2017 it was estimated that its residents held around $2.7trn.1 This figure does not include the city’s richer hinterlands that have long accommodated wealthy county and ‘City’ types who wish to live within reach of the fumes of finance in the capital. Today, many of these commuter locations also attract the interest of extremely wealthy international buyers. Small towns like Windsor, Ascot, Virginia Water, Leatherhead, Weybridge, Henley, Marlow and Bray form part of a long-standing island formation, environs whose established wealthy are joined, as in many parts of London, by the newly minted global rich.
There has long been the sense that London and the South East are effectively another country, but recent estimates show them breaking off from the rest of the UK even more emphatically.2 One mark of this transition is the seemingly improbable fact that the total value of homes in Elmbridge – a small, very affluent town to the west of London with a population of 130,000 – is now greater than that of the city of Glasgow. Likewise it is hard to comprehend that the top ten London boroughs by property wealth are now worth more than North Wales, Northern Ireland and the whole of Scotland put together.3 This regional rump of wealth, a ‘fat ass’ of property riches and the presence of the rich themselves,4 is an attractive prospect for the world’s wealthy who have increasingly wanted a piece of it.
London is a rich city however you measure it, and long has it been so. But one of the thornier debates regarding its advantages rests on the degree to which its wealth really contributes to the fortunes of the nation more generally.5 Much of this wealth comes through the ownership of property, as well as investment portfolios from which incomes can be extracted and wealth further supplemented – the very definition of what might be considered a truly capitalist class. Part of this story of split fortunes – between those who live from the proceeds of their capital and the rest – was revealed in the 2015 World Wealth Report which showed that around one in twenty of London’s population was a ‘high net worth individual’ (a dollar millionaire or with around £660,000 in non-property wealth), representing nearly half (44 per cent) of this group nationally (840,000).
Many of London’s rich don’t consider themselves to be particularly well-off in a city in which the average cost of a terraced home is now just shy of half a million pounds.6 Yet the city also boasts 431,000 property millionaires, that is, households living in homes worth a million pounds or more (roughly one in twenty people). Some will remember the comment from the model Myleene Klass that two million pounds wouldn’t buy a garage (a figure mooted at the time as the basis of an annual property tax), but many might suggest that she either had particularly high standards for car storage, or else was among the many now somewhat detached from the housing needs of the average Londoner.
By 2018 the amassed fortunes of the roughly 18.1 million global super-wealthy topped $70 trillion dollars – a lot of wealth for a tiny fraction of the world’s roughly 7 billion population.7 In 2008, at the outset of the austerity decade, there were only 11 million in this group, highlighting the fact that the public cuts that have hit so many so hard are part of a system that has continued to enrich the wealthy.8 Indeed, as many now argue, the austerity project can be linked to a political and economic machine devoted to protecting and expanding that wealth. The fortunes of the world’s rich are large enough to wipe out the third world debt of $2.4trn twenty-five times,9 clear the US and UK budget deficits,10 and perhaps still have enough left over to bid on a few cases of nineteenth-century Bordeaux at Sotheby’s.
If there are nearly half a million millionaires in London, then who are the city’s real wealth elite? They constitute roughly the top 1 per cent of wealth (rather than income) holders in the city, around 88,000 in a population of 8.8 million. But this measure belies the vast variations of wealth even within this group – the tiniest cluster of the top 0.001 per cent are considerably wealthier than the remainder. Many in London possess wealth that has been generated within the UK, and which may have been transferred across generations. But many of its most monied are what used to be called the nouveau riche; they possess wealth that was not inherited and that, in the case of many of the richest, has been generated as a result of regional and global economic and social instability. This instability has seen changes in national leadership, corporate ownership and the extraction of value through mechanisms that have created new and dramatic clusters of wealth, particularly among those benefiting from the shift to capitalism in the former Soviet Union and from financial and economic liberalisation in Latin America. Alongside these are the resource-based wealthy of the Gulf states as well as the new rich of East Asia and, to a lesser extent, Africa.
The billionaires, despite the inevitable attention they receive, are really only the tip of the iceberg. If we want to understand the wealthy and their impact on the city we need to go much further. To get the full picture of how London works for the rich and for capital we must include not only the other tiers and categories of the super-rich but also, critically, those who court, support, laud and defend them. Real wealth is often defined in the various rich lists in relation to three bands: first, the High Net Worth Individuals (HNWIs) who hold between $1m and $5m in investable wealth, described somewhat cutely by Capgemini as the ‘millionaires next door’; then there are those worth between $5m and $30m (known as the mid-tier millionaires); finally there is the rather wide band of those who have $30m or more, known as Ultra High Net Worth Individuals (UHNWIs). There are around 353,000 HNWIs and 4,944 UHNWIs, the latter forms only 0.05 per cent of London’s population (or just 1 in 1,785 people in the city).11 Of those classified as multi-millionaires, that is those with £6.6m ($10m)