Wealth gives them influence, which gives them power, which enhances their wealth. LYNN WALSH reviews a recent study of the super-rich elite.
The immensely rich industrialists and bankers of America’s late 19th century ‘gilded age’ were known as ‘robber barons’. The ‘plutocrats’, the subject of Chrystia Freeland’s book, are the robber barons of today. They are the super-rich elite, wielding massive economic power and exerting political influence (buying votes, intensive lobbying) to protect their wealth. During the free-market frenzy of recent years they have been celebrated by the media as paragons of enterprise, with a more positive image than their robber baron predecessors. But since the financial crash and the onset of seemingly endless recession, there is a growing reaction against the super-rich elite, which appropriates to the ‘1%’ of top wealth-holders.
Freeland is an accomplished financial journalist and her aim is "to understand the changing shape of the world economy by looking at those at the very top". Her book provides ample and very interesting material for an analysis of the plutocrats, though her conclusions are quite lame. Most of her material relates to the period before the 2008 crash, but she adopts a more critical tone, especially towards the financial plutocrats, when she comes to the aftermath of the crisis.
The plutocrats are the super-rich elite. They include the wealthiest 1% of the population, though in the US, Britain and elsewhere the most powerful plutocrats are a small fraction of the 1%. The plutocrats (as portrayed by Freeland) are mostly nouveaux riches, not landlords or rentiers, who merely collect a share of the profits. They are the ‘working rich’, gaining most of their income from their salaries (though lucratively supplemented by company shares which produce capital gains). In 1916 in the US, the top 1% received 20% of their income from paid work; in 2004, it was 60%, this dramatic change occurring since the 1970s. Through salaries and share options the corporate bosses take a huge slice of the profits of the companies they run.
The plutocrats are composed of several groups. The biggest contingent is the corporate bosses (the profit-seeking chief executive officers/CEOs and the heads of investment banks and hedge funds). The ‘tech geeks’ are another group, the bosses of the big technology companies (Intel, Microsoft, Google, etc).
Another group are the ‘rent-seekers’. These include the robber barons of the former Soviet Union and eastern Europe, who used their political positions within the old Stalinist regimes to grab state assets when the centrally planned economies disintegrated after 1989. The richest among these grabbed the oil, gas and metal reserves that were formerly controlled by the state. A similar process took place in China. The notorious ‘princelings’, the sons and daughters of top party/state officials, used their political influence to grab land, purloin assets, and exploit privileged access to credit in order to further their own wealth.
It is not only in former Stalinist states that this occurred. Freeland shows that in India, too, access to capital and key markets depends on influence among political leaders – which has to be paid for through massive bribery. In Mexico, the privatisation of telecoms made Carlos Slim one of the richest men in the world (worth $53bn in 2009).
Freeland provides a composite portrait of the typical plutocrat, who is male (there are very few women), aggressively ambitious, born of middle-class or upper middle-class parents, highly educated in ‘good schools’ (often with scholarships or bursaries), highly educated in science, maths, or engineering. The typical plutocrat graduated from a super-elite university (US Ivy League or Stanford; in Britain, Oxbridge, UCL, etc). Typically, the plutocrat achieves an income of $100,000 by age 35 – or is probably not going to make it into the super elite.
Not surprisingly, the plutocrats fervently believe in ultra-free-market economics. Some finance right-wing think-tanks to promote their free-market ideology. Some (for example Evgeny Lebedev, the Koch brothers) buy newspapers and other media outlets. Plutocrats spend millions on lobbying politicians, a system (especially in the US) of institutionalised corruption. They believe that as super-smart, ‘working rich’ they deserve their super-rich status. Some, however, feel the need to enhance their image through philanthropy on a grand scale. Bill Gates is well known for this, but in his educational and other charitable projects he promotes capitalist managerial methods (for example, testing and performance-related pay in education).
Some of the very richest plutocrats, however, brazenly flaunt their wealth. They travel around in private jets and yachts (complete with helicopters, mini-submarines, etc). With their wives and girlfriends they support the thriving luxury goods sector. They patronise elite restaurants, top lawyers, doctors, haute couture, etc. They buy property in big international cities, like London, where they receive privileged tax treatment.
The plutocrats are undoubtedly cosmopolitan and highly mobile. But Freeland exaggerates this point. While the plutocrats themselves may flit from place to place, deal to deal and tax haven to tax haven, the big corporations, mineral assets, food-producing lands, etc, from which their wealth is ultimately derived, are still rooted within the framework of rival nation states. The plutocrats surf the waves of globalisation, but it would be a mistake to conclude from this that capitalism has overcome its national limits.
The role of the CEO-superstars
During the last 30 years, the chief executives of major corporations formed a prominent contingent of the super-rich plutocrats. Until the crash, they were fêted by the media as the heroes of the neo-liberal revolution, maximising ‘shareholder value’ (that is, short-term profits). But after the onset of the ‘great recession’, many investors began to see them as parasitic managers, dedicated to maximising their own incomes, taking a lion’s share of corporate profits at the expense of the majority of shareholders.
The top executives of America’s big industrial corporations enjoyed considerable economic and political prestige during the post-war upswing (1945-73). Many saw themselves as capitalist civil servants, running their companies in the wider interests of ‘socially responsible’ capitalism. Their strategy was to reinvest profits in the long-term development of their productive capacity. To buy industrial peace, they conceded historically high levels of pay and benefits (health insurance, pensions, etc) to their workers. Executive salaries, however, declined during this period as a result of social pressures within corporations and a general compression of income differentials.
In 1934-38 the median income of the top quartile of CEOs was $813,000 (constant 1986 dollars); by 1974-86 it had fallen to $645,000. Even so, the average pay of CEOs of S&P 500 companies was 25 times the average pay of production workers. Yet, from the late 1970s, CEO pay soared to unprecedented heights, opening up a huge differential. By 1990 CEO pay was 100 times average workers’ pay, and by 1996 it was 210 times. (Jeff Madrick, Age of Greed , p327)
The dramatic change in the role and remuneration of CEOs was part of the neo-liberal restructuring of the US and other advanced capitalist countries that was unleashed after 1980. With the broad decline of corporate profitability from the late 1960s, investors – shareholders, particularly the institutional investors such as insurance companies and mutual funds – were increasingly dissatisfied with their returns. They no longer wanted ‘corporate lifers’ pursuing long-term investment strategies (and their own corporate careers). They wanted immediate profits and the maximum return to shareholders. Though Freeland does not refer to this term, the neo-liberal doctrine involved is best defined as ‘shareholder value’. (See: Lazonick & O’Sullivan, Maximising Shareholder Value, Economy and Society, 29/1, February 2000)
The old corporate approach of ‘retain (profits) and reinvest’ was replaced by ‘downsize and distribute’ (to shareholders). The deep recession of 1980-81 saw massive job losses and, with the acceleration of globalisation, the relentless offshoring of manufacturing jobs. Successive waves of mergers and acquisitions also resulted in the destruction of industrial capacity and more job losses. The mergers were paid for by debt (mainly raised through junk bonds), while the assets that were stripped out were sold off – and the proceeds handed out to shareholders. Quarterly profits and, above all, a company’s stock exchange capitalisation (the total value of its shares), became the only criterion of success. During the financial bubbles of the 1990s and after, the profits of many corporations have frequently been bumped up (whether through creative accounting or outright fraud) to boost their share prices.
How would the maximisation of ‘shareholder value’ be guaranteed? Through giving CEOs huge incentives, not only fabulous salaries but, especially, their company’s shares or options to buy shares. This gave them a personal stake in the success of the company – as measured by its share price. CEOs were no longer corporate lifers. They became the ‘agents’ of the shareholders, in practice the investment bankers, fund managers, and hedge fund bosses who dominate financial markets. The pay levels of CEOs are far higher than other senior executives. On average, moreover, CEOs stay in their jobs only about three or four years before they move on or are sacked. There is, in effect, a market for CEOs, with competitive bidding for the candidate who will be the most ruthless in cost cutting, job slashing and boosting profits. This process dramatically raised the pay packages of CEOs.
Shareholders did well. The increases in stock market capitalisation paralleled the increase in CEO compensation packages. But, under the impact of the financial crisis and economic downturn from the end of 2007, shareholders – particularly the pension funds and insurance companies – have begun to gripe about the growing share of corporate profits taken by the top executives. In 1993 the average pay package of CEOs of Fortune 500 companies was $3.7 million; by 2006 it had risen to $9.1 million (Madrick, Age of Greed, p328). "Between 2001 and 2003, public companies paid more than 10% of their net income to their top five executives, up from less than 5% eight years earlier". (Freeland, p135)
CEOs form a key contingent of the plutocrats. Corporate executives (outside the financial sector) constitute 31% of the top 1%, the biggest single group; they make up 42% of the 0.1%.
During the surge of the bubble economy, CEOs were seen as superstars, delivering ever higher yields to shareholders while ruthlessly downsizing corporate America. Millions of blue-collar workers lost well-paid manufacturing jobs, and millions of salaried white-collar jobs have gone too. There has been a shift to low-paid, part-time, insecure jobs in the service sector, together with a rise in unemployment and workers dropping out of the labour market altogether. The median household income has essentially stagnated since 1980. In 2011, US median household income (inflation adjusted) was 1.13% lower than in 1989. The huge rise in top executive salaries does not merely reflect the process of polarisation of income and wealth. The enrichment of CEOs is one of the drivers of the polarisation, because CEOs are the agents of a process of polarisation.
The masters of technology
Successful ‘tech geeks’ (as Freeland calls them) – like Bill Gates (Microsoft), Steve Jobs (Apple), Larry Page (Google), Mark Zuckerberg (Facebook), etc – are prominent among the plutocrats. Their hi-tech products, especially in the field of information and communications technology (ICT), played a decisive part in the sweeping social changes that have taken place since the 1980s. Freeland reflects the general view that the technological advances are a ‘force for good’ (though they are a factor in the development of inequality). In contrast to bankers, increasingly seen as greedy villains, tech geeks are seen as secular saints, people who have earned their billions on the merits of their achievements – true technocrats.
Freeland depicts them as individualistic superstars. She refers to the role of California’s Silicon Valley as the matrix of the hi-tech revolution. But she does not examine the role of state-supported infrastructure in the development of Silicon Valley. Many of the scientists and engineers, for instance, were educated in California’s public university system. Much of the research and development on the internet and associated ICT arose from federal-government-funded research programmes and was originally developed by the military-industrial complex.
Freeland does note that the biggest beneficiaries of the Silicon Valley phenomenon have been Wall Street financiers. But she skates over the fact that technology proved very profitable for the tech entrepreneurs themselves. The successful technology bosses – even if they started as lone inventors – were completely interlinked with high finance from an early stage.
The tech firms depended for their success on the availability of capital, mostly supplied by venture capitalists. They financed R&D and initial marketing, and when the new firms were up and running they were launched as public companies on the stock exchange through IPOs (initial public offerings) of their shares. In the heady boom atmosphere of 1997-2000, there was frenzied investment in technology shares – anything associated with the internet, whether proven successful or just a promise of infinite riches, became targets of speculation.
There was a huge speculative bubble in technology shares. The flood of cheap credit was used to speculate in these shares, enormously pushing up their value. In the US, technology stocks increased by 300% between 1997 and 2000; at the peak, they accounted for 35% of total share capitalisation, up from 12% in 1997. This massive overvaluation inevitably led to the collapse of the dotcom bubble at the end of 2000. (See: Carlotta Perez: The Double Bubble, Cambridge Journal of Economics, 33/4, 2009)
There was another financial bubble after 2001, again based on the growth of cheap credit (debt). This bubble centred not so much on technology but on new forms of derivatives, securitisation of debt (linked to the housing bubble), and automated share trading – all of which was made possible by the new ICT. Again the bubble inevitably led to a devastating financial crash at the end of 2007.
Technological developments cannot be separated from economic and social forces. While undoubtedly having many positive applications, the new technology has been a key force in the development of the polarisation of society. It facilitated globalisation and has led to a polarisation in the advanced capitalist countries between those (highly educated, technical workers) associated with the hi-tech sector and those (blue and white collar workers) who previously depended on the old ‘smokestack’ and production-line industries that have been decimated by offshoring and new technology.
"Responding to revolution" (rapid social changes), says Freeland, "is so central to Silicon Valley culture that the most successful entrepreneurs have developed a culture of continuous revolution". (p171) However, the new technology has come into collision with economic and social barriers. There are certainly many possible new applications for ICT, and developments in other sectors (greater use of industrial robots, 3D printing, biological sciences, laser technology, green energy production, etc). However, in a capitalist economy, the weakness of demand, due to stagnating incomes and massive income inequality, limits the extensive development of technology – the broader diffusion of new technology throughout society. This impasse is reflected in the intensive competition between corporations like Microsoft, Apple, Google, Facebook, etc, for an increasingly saturated market in electronic consumer goods (iPhones, iPads, tablets, etc) and the various applications and ‘content’ that go with these devices.
The new technology has been highly profitable. This is shown by the increasing cash piles of US technology companies. "Around $6 out of every $10 added to the corporate sector’s cash mountain over the past three years has come from tech companies… The overall pile reached a record $1.45 trillion at the end of last year… Apple alone is likely to be sitting on $17 billion of cash and liquid investments by the end of the year…" (Richard Waters, Tech Groups Swell US Cash Pile, Financial Times, 18 March 2013) Clearly, technological innovation does not automatically lead to growth and the spread of prosperity.
A new class?
Do the plutocrats studied by Freeland constitute a distinct social stratum? If so, how are they to be characterised? Freeland argues that the new economic meritocrats and scientific technocrats – many of them (even the gangster capitalists of the former Stalinist states) highly educated engineers, scientists, mathematicians, economists, etc – are a ‘new class’ contending for ‘class power’. They are challenging the established rentier capitalists and increasingly using their wealth to exert political influence.
Unfortunately, Freeland’s approach on this issue is superficial and confused. She draws on the mistaken ideas of Milovan Djilas’s New Class (1957) and his disciples’ book, Intellectuals on the Road to Class Power (Gyorgy Konrad and Ivan Szelenyi, 1979). They saw the ruling bureaucracy of the Stalinist states as a class, a new bourgeoisie, rather than a privileged caste that had usurped control by the working class and was presiding over the non-capitalist planned economy.
Konrad and Szelenyi claimed that technocrats (engineers, etc) were increasingly dominating the bureaucracy (or ‘new class’) and seeking to increase their power. There was a grain of truth in this. As the planned economies became more complex a new generation of technocratic bureaucrats became more important – reflected, for instance, in the Gorbachev wing of the bureaucracy in the Soviet Union in the 1980s.
It is completely misguided, not to say ludicrous, however, to apply this (false) ‘new class’ analysis to 21st century capitalism. For a start, the plutocrats – while they are very wealthy – are not a coherent group, as Freeland herself shows. In Russia, eastern Europe and China, gangster capitalists and profit-seeking ‘princelings’, Freeland’s ‘rent-seekers’, are capitalist classes in the process of formation (though the state remains a powerful economic power, especially in China).
In the US and other advanced capitalist countries the plutocrats, notably the financiers, CEOs and technology bosses, form an emergent faction of the capitalist class. Not necessarily from traditional bourgeois families, they have made huge fortunes and have come to the forefront on the basis of new trends within capitalism: neo-liberal economics, financialisation, globalisation, new technology. Undoubtedly, the plutocrats will be assimilated into the bourgeoisie and, as Freeland acknowledges, the nouveaux riches will strive to pass on as much of their privileges (access to elite universities) and wealth as possible to their offspring.
Some of the plutocrats, moreover, will attempt to exert more political power. Michael Bloomberg, for instance, a mega-rich financier and undoubtedly a plutocrat, has been mayor of New York since 2002. In 2008 many Wall Street financiers backed Barack Obama as a reaction to the disastrous adventures of the Bush-era Republican government. In 2012 they swung overwhelmingly to Mitt Romney – to block tax increases and tighter financial regulation. Freeland refers to the plutocrats’ propensity to buy political influence through (now virtually unrestricted) campaign donations. But, although she refers to the ‘road to class power’, she makes no attempt to examine the plutocrats’ connections with ruling political elites, the elements of the capitalist class who actually wield power through the mechanisms of government and the state.
What is to be done?
Freeland has produced an illuminating portrait of the super-rich elite. Whatever her intention, she provides ample material for a devastating indictment of the system which has produced it. But what is her standpoint? She often seems ambivalent, mixing admiration for the ‘superheroes’ with criticism – not so much of the fabulous wealth and luxurious lifestyles of the plutocrats but of their arrogant blindness to the consequences of their unrestrained pursuit of riches. She is not out to allocate blame, she says. No doubt, Freeland, who needs to talk to the plutocrats in the course of her work as a financial journalist, wants to maintain a certain ‘neutrality’.
Her starting point, she says, is that "we need capitalists because we need capitalism – it being, like democracy, the best system we have figured out so far". Western capitalism, through repeated "creative destruction" and the absorption of new technology, "competition from new entrants", and "an ever more inclusive economic and political order", has resulted in the "most rigorous era of economic progress in human history". "Pretty much the whole world [believes in capitalism]". "Global capitalism, however, was not supposed to work quite this way". Freeland is referring to the extreme polarisation of wealth rather than the disastrous financial crash and economic slump after 2008.
Until recently, she says, proponents of capitalism believed that "in the fully industrialised or post-industrial societies, income inequality would again decrease as education became more widespread and the state played a bigger, more distributive role". This seemed to be borne out during the post-war upswing. On the basis of historically high growth, and the extension of New Deal welfare provision, there was the phenomenon known as the ‘great compression’, with the marked reduction of inequality in the US and other advanced capitalist countries. US leaders boasted of the country’s vast ‘middle class’, a broad spectrum that embraced the working class and large sections of salaried, white-collar workers, professional workers, and small business-people (and obscured the identity and role of the proletariat).
Freeland does not analyse the international and domestic class relations that produced that situation. However, she does mention in passing that "the fear of communist revolution was a powerful motivation for reform… It was better to give the working class an effective political voice, and social safety net, than to risk having their Bolshevik vanguard seize power altogether". With the collapse of ‘communism’ – China’s turn towards the market, the implosion of the Stalinist states of the USSR, eastern Europe, etc – and the disintegration of the domestic social-democratic/reformist leaders, this pressure no longer existed. Seizing the opportunities opened up by financialisation and globalisation, the capitalist elite set out to concentrate as much wealth as possible into its own hands.
The plutocrats used their increasing political influence – bought through campaign funding – to reinforce the economic changes with a new political framework based on the deregulation of financial markets, privatisation of public companies, lower taxes on wealth and weak unions (enforced by state coercion). There was also the pressure of unemployment and the threat of the offshoring of jobs, and depressed wage levels.
Some capitalist strategists recognise the potential danger to their system posed by the extreme polarisation of wealth. However, when the Occupy movement began, its participants were treated to incredible tirades of abuse from prominent finance-plutocrats: they were "just a bunch of welfare bums". However, Paul Martin, a former Canadian prime minister and multi-millionaire businessman, recognised that "Occupy Wall Street has hit a chord that really is touching the middle class… right around the world".
Another member of the super elite, the financier Mohamed El-Erian, commented in June 2010 that "no nation can tolerate for long excesses in income and wealth inequalities as they tear at the fabric of society. Think of this simple analogy – that of an increasingly fancy house in a poor and deteriorating neighbourhood. The wellbeing of the house cannot be divorced from that of the neighbourhood as a whole". Yet most of the economic elite continue to volubly "conflate their own self-interest with the interests of society as a whole". Ever more blinkered, the plutocrats inhabit a mental "global gated community". One less blinkered big-businessman lamented that it would even be an advance for the elite to adopt "long-term greed" as opposed to "short-term greed" (287).
Yet the Republican candidate in the 2012 presidential election, Romney, a private-equity plutocrat, campaigned for cutting the benefits of the 47% who he claims depend on benefits, slashing the taxes of the rich, and fighting off all attempts to strengthen the regulation of the finance sector.
So, what is to be done? Freeland evokes the ideas of Henry George, a prominent populist who denounced the ‘robber barons’ of the 1880s and 1890s. He referred to the ‘great enigma’ of the association of progress (the prodigious increase in producing power) with poverty (depression and mass unemployment). George’s description of the contrast between poverty and progress certainly resonates today. George appeals to Freeland because he "denounced the obvious iniquity of 19th century American capitalism without disavowing capitalism itself". (p42) George concentrated his fire on landlords and their allies, the railway bosses, the mine owners, bankers, rentiers, etc. He supported ‘productive’ capitalists, especially farmers and small businesses. His solution was a return to ‘Jeffersonian democracy’ (an idealised picture of the popular democracy of the early American republic) to tame the robber barons. This is essentially Freeland’s prescription for today: what is needed are "right rules and policing able to enforce them". This implies separating the bad guys, the rent-seeking plutocrats, from the good guys, the value-creating plutocrats – which Freeland herself admits is an impossible task!
This is a plea from Freeland for a return to the ‘golden age’ conditions of the post-war upswing, when prosperity was spread across broad layers of the ‘middle class’. But this is nowhere near a programme for change; it is a pious wish, not at all based on the real social forces operating in US society (and other advanced capitalist countries), despite the fact that Freeland herself shows that the plutocrats are the product of profound social changes. In the last three decades capitalism has swung further and further away from the New-Deal or social-democratic model of the post-war upswing. The capitalist class and its ruling, political elite, under the pressure of financial markets, have not only prescribed free-market policies everywhere but vetoed any sustained turn to social spending.
In the event of explosive social movements which threaten the system, capitalist governments will turn towards Keynesian measures (as they did with short-term stimulus packages in 2009-10), with some concessions to the working class. But they will be temporary, stop-gap measures. The conditions do not exist for a return to the kind of upswing that took place after the second world war or to the social programmes that accompanied economic growth.
Freeland believes that capitalism is "the best system so far". But it has landed the world economy in the deepest crisis since the interwar period. Moreover, the prospects are bleak – we most likely face a prolonged period of depression.
Freeland nowhere refers to the role of the working class as a social force for change. True, reflecting on history, she refers to the threat of revolution as the spur to reform. She also refers to some of the strategists of capitalism fearing social/political upheaval. But she offers no perspective for change.
Freeland refers to Marxism as the first coherent ideology of class warfare (p114) but lightly dismisses Karl Marx as wrong about capitalism preparing its own destruction. But hasn’t Marx been shown to be right about trends in contemporary capitalism? The stark polarisation of wealth, the acceleration and globalisation of the economy, the contradictory effects of technology, the impoverishment of huge sections of the working class and labouring poor?
Marx will also be proved correct about the inevitability of massive upheavals. Recent general strikes and mass protests in Europe and elsewhere are a prelude to bigger struggles to come. The working class will reassert its role as a force for social change.
There is no alternative to the existing polarisation within the framework of capitalism. It raises the need for the common ownership of the means of production, for planned production, and for democratic administration of the economy on a national and international basis. Accepting that capitalism is here to stay, as Freeland does, without any conception of another form of society, she finds it impossible to come up with any effective way of ending the rapacious reign of the plutocrats.
At the height of the boom, a New York socialite tells her: “You had people in their 30s, through hedge funds and Goldman Sachs partner jobs, people who were making 20, 30, 40 million a year. And there were a lot of them doing it”.
Freeland shows how the wealth gap narrowed following the great depression of the 1930s, but began to explode in the 1980s. “In the 1970s, the top 1% of earners captured about 10% of the national income. Thirty-five years later, their share had risen to nearly a third of the national income”.
Most of the figures she gives are for the United States, but similar trends have occurred in Britain and Europe. In developing countries like China, Russia, India and Brazil, the 1% has also dramatically outpaced the vast majority in income and wealth. “In 1980, the average US CEO made 42 times as much as the average worker. By 2012, the ratio had skyrocketed to 380”.
During the second world war and the post-war upswing the top 10% took around 33% of income. But since then their share has climbed dramatically. “By 2006, the top 10% earned 50% of national income, even more than it did in 1928, at the height of the roaring twenties”.
The biggest shift, however, is within the top 10%. “Almost all the gains are at the very apex of the distribution: during the economic expansion of 2002 to 2006, three quarters of all income growth in the United States went to the top 1% of the population”. There is, in other words, a growing gap between the rich and the super-rich. “Here’s how that translated into US average family income in 2010… Families in the top 0.01% made $23,846,950; that dropped sharply to $2,802,020 for those in the top 0.1-0.01%. Those in the top 1% made $1,019,098; those in the top 10% made $246,934. Meanwhile, the bottom 90% made an average $29,840”.
If anyone is to blame for triggering the crash of 2008, isn’t it the super-rich bankers and financiers? Yet, in contrast to the 1930s, they have not really suffered. “In the 2009-2010 recovery, 93% of the gains were captured by the top 1%. The plutocrats did even better than the merely affluent – 37% of these gains went to the top 0.01%, the 15,000 Americans with average incomes of $23.8 million. Another example: in 2009, the country’s top 25 hedge fund managers earned an average of more than $1 billion each – or more than they had made in 2007, the previous record year”.