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Among countless individuals in the United States, the economic climate over the past five years has been tough. Prices have soared while pay remains flat. Elevated mortgage rates have made homeownership a grim prospect. The unemployment rate has been gradually increasing.

The majority of individuals have reported they're postponing major life decisions, including raising children or changing careers, because of economic uncertainty. But for a tiny fraction of people, the last five years couldn't have been any better.

Wealth Explosion

The assets of the world's billionaires grew 54% in 2020, at the peak of the pandemic. And even during all the economic instability, the stock market has only persisted in expanding. This expansion has primarily advantaged just a small number of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this division seems, it's the economic framework working as it is existing today.

"The wealthy have bought their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," stated wealth disparity expert Chuck Collins. "We're now moving into this other chapter of extreme wealth extraction where the wealthy are preying on the system of inequality."

Mapping Economic Classes

To help others understand what exactly it means to be "rich" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, imagined the different levels of wealth as "Affluencia" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins organizes these "wealth villages" based on income levels:

• At the lowest tier, Affluent Town, are the 10 million Americans who have a annual salary of at least $110,000 and an overall wealth of over $1.5m.
• The villages get more exclusive as wealth goes up: Lower Richistan has 2.6 million households who have wealth between $6m and $13m.
• Middle Richistan has 1.3 million households who have assets worth an average of $37m.
• Upper Richistan, made up of 130,000 Americans (roughly the size of a small city) has between $60m to $1bn in wealth.

In total, the residents of these villages constitute the top 10% of the wealth income distribution, about 14 million Americans altogether, though their circumstances vary dramatically.

"You could be in Lower Richistan, and you're still flying in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really distinct lifestyle. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system fails – you're set."

The Billionaireville Effect

The peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The power that this group has substantially outweighs those who are simply wealthy, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" doesn't capture the real problem and has a "suggestion of eradication" to it.

"It's the distinction between personal actions and a system of rules," Collins commented. "We should be worried about an economic system that channels so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins separates it into four parts: acquiring fortune, defending the wealth, political capture and extreme wealth removal.

When many Americans think about wealth, they usually think only about the first step, Collins said. People can create a modest amount of wealth through establishing or managing a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires substantial commitment and tactics in those next three steps. Collins describes what he calls the "fortune security field": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, offshore bank accounts, anonymous shell companies, charitable foundations and other vehicles to hold assets," he explains.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs government backing. Wealth of over $40m translates to political power, Collins says, and can be used to defend wealth and protect its accumulation.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to affect nearly every single part of an Americans' everyday life largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is seeking those areas of the economy where they can extract value a little bit harder," Collins said. "One thing I don't think people understand is these billionaire private-equity funds are what happens when so much wealth is parked in so few hands, and they can kind of turn around and say, 'Where else can we squeeze money out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can increase their costs."

The Real Consequences

The consequences of this inequality go beyond the wealth getting wealthier. It's about people facing higher costs for their healthcare, rent and vet bills without seeing any substantial income improvement. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being left behind [and] are monetarily hurting," Collins said, adding that right-leaning leaders have been good at tapping into a potent "fake grassroots movement".

Political Reality

The paradox, Collins points out in his book, is that government officials have appointed a succession of billionaires to government roles. Along with wealthy entrepreneurs who had brief but powerful roles overseeing substantial reductions to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from congressional allies, helped pass significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While legislative bodies continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the other major party, which has also been captured by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "reverse the updraft of wealth", including substantial modifications to the tax system, raising the minimum wage and empowering worker groups.

"It was so, so close, and the law really did embody the will of the majority of people who really want lawmakers to fix some of these critical challenges," Collins said. "Oligarchic power is not about building so much as stopping. It's easier to block than it is to make something substantial take place, but the muscle memory is there. We know what that looks like."

Collins is hopeful that there can be change, but said it would require sustained political momentum.

"It may be before we know it that the pendulum swings back, and then it really is about preserving a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is solvable."