This blog is posted in
conjunction with our Global
Review podcast, just released.
There was an earthquake in Chile recently. There was another
earthquake, at least in a metaphorical sense, a little to the north, as Forbes magazine announced the
identity of the world’s richest man.
He is, predictably, an American – but what may surprise some
is that he is from Latin America, not the United States.
The Mexican telecom king Carlos Slim is officially richer
than Bill Gates or Warren Buffett or any of the surviving Wall Street “Masters
of the Universe”.
Of course, the word “officially” means little in practice. Forbes is probably as reliable as it is
possible to get, but none of these “rich lists” is really accurate. They tend
to overestimate assets and underestimate liabilities. Land and shareholdings
are usually matters of public record, but the loans used to buy them or secured
on them are not. The lists also tend to value both land and shares at their
nominal market price, but the reality is that neither would be likely to get
that price if they were sold at short notice. A total dump by a major
shareholder who was also one of the founders of a big corporation would have a
particularly catastrophic effect on share price.
So the disposable wealth of practically everyone on these
lists is a lot less than the lists suggest, and we have no way of saying who
could really come up with the most cash if they liquidated everything.
Yet the Forbes
list is probably the best indicator we have, and, whether accurate or not, it
is of enormous symbolic significance.
The higher levels of the list have traditionally been dominated
by men from the United States and Europe – people with a broadly similar
cultural and ethnic background.
The 2010 Top Ten shows how that is changing. There are still
three each from the United States and Continental Europe, but there are also
two Indians and a Brazilian as well as the Mexican at the very top. This is not
a reflection of where global wealth is located, but entrepreneurs in counties
which have traditionally been looked down on by some in the developed West can
take encouragement from this evidence that anything is possible for them.
The recession has seen the rising and falling of many.
Business is coming back – but not necessarily in the places
it was before. Many of the big names that went down over the last two years had
been living on borrowed time for ages. They are gone for good. Those setting up
new businesses are looking for bases that are less taxed, less regulated, and
less in thrall to restrictive labour practices.
In this sense, the recession has only accelerated what has
been happening for some time. Although Mexico still has major problems – most
notably the law and order breakdown caused by the “drug wars” between suppliers
of illegal narcotics – the country has also seen major economic development in
the last two decades, due in large part to the North American Free Trade
Carlos Slim’s success is more than just the triumph of an
entrepreneur. It is a sign of the times – one more example of the major shift
in economic power that has been underway for some time and which is now too
visible to ignore.