Once the richest man in Russia, Mikhail Khodorkovsky has been held in prison since 2003 on the orders of Putin and is now back on trial for another twenty-two year sentence. He’s never getting out. In China, Huang Guangyu has just had all his wealth confiscated and has himself been sentenced to fourteen years as his communist masters seize what he built.
What does this have to do with Greenwich real estate? Plenty. 605 North Street, a huge, if garish mansion, was under contract back in 2005 to a Russian billionaire until he flew home to Moscow to check up on his investments and ended up in Siberia. End of that deal. It is presently being rented to another Russian, a (very) wealthy real estate developer, who fled his country and is assessing how much, if any, of his wealth he can retrieve from Putin and his cronies.
America has its problems – surprise! – but we still operate under a system of law, not thuggery and theft. That may change but for now, this country still offers a safe haven, and Greenwich has homes that the world’s rich can feel comfortable in.
There’s a fabulous article in today’s WSJ by Matt Ridley on human evolution – it’s trade that distinguished us from the Neanderthals, he maintains.
Once human beings started swapping things and thoughts, they stumbled upon divisions of labor, in which specialization led to mutually beneficial collective knowledge. Specialization is the means by which exchange encourages innovation: In getting better at making your product or delivering your service, you come up with new tools. The story of the human race has been a gradual spread of specialization and exchange ever since: Prosperity consists of getting more and more narrow in what you make and more and more diverse in what you buy. Self-sufficiency—subsistence—is poverty.
As with traders ever since, increasingly it came to look like tribute as Uruk merchants’ dwellings were plonked amid the rural settlements of the trading partners in the hills. A cooperative trade network seems to have turned into something more like colonialism. Tax and even slavery began to rear their ugly heads. Thus was set the pattern that would endure for the next 6,000 years—merchants make wealth; chiefs nationalize it.
My only disagreement with Mr. Ridley is that, under communism, the chiefs steal the wealth for themselves. Still, for now, we remain the world’s best hope for the industrious. Let’s welcome them.