The late economist John Kenneth Galbraith created a bestselling sensation in 1958 with his book The Affluent Society.
His work drew attention to the relative increase of private affluence at the expense of the living standards of the masses. The latter relied on state services, while the affluent had private aeroplanes, private education and private medical care.
Lower taxes for the affluent meant the resources of the public sector were increasingly stretched and its services became increasingly inadequate.
The wealth gap has continued to widen, both between nation states and between individuals. Current estimates suggest that 1% of the world population accounts for 60% of global wealth. That certainly represents inequality.
There are two consequences of this division for managers. The mass markets which most of yesteryear's great companies were built on offer less attractive rewards today than the specialised markets, where higher earners can keep on spending.
The second consequence is that the nature and size of the new affluence have changed in ways that greatly distort traditional economic relationships. The wealth of the few who dominate the affluent economies in the West is reliant on the poverty of the many in the East who have no choice but to work for low wages.
There has been a shift from Affluence to Opulence. Millionaires are commonplace, but multi-millionaires and billionaires are where the real action is.
But this is nothing to do with increased economic efficiency or business brilliance. There's little logic behind the determination of executive pay. In the Age of Opulence, justifying the rewards of managers by hard and successful work is an annoyance – a waste of time and effort.
The true object of the exercise is to reach a status where you can negotiate even larger fortunes.
The rules of capitalist competition are changing in basic and perhaps dangerous ways. There are warnings of future dangers, but nobody even proposes to explore any present need for action. We are entering uncharted territory. But history suggests that somehow, somewhere, the Age of Opulence is sowing the seeds of its own decay.
