The average consumer is dead. That was the conclusion of a confidential Citigroup report from 20 years ago for ultra-wealthy clients titled Plutonomy: Buying Luxury, Explaining Global Imbalances (link, PDF).

This 2005 report stripped away the polite fiction that billionaires and the rest of us live in the same economy. The world is actually divided into two blocs: the “plutonomies” — economies powered by a small group of ultra-wealthy elites — and the entire rest of humanity.

In countries like the US, UK, Australia, and Canada, the richest 0.1 percent had captured such a massive share of income and wealth that the spending habits of the “multitudinous many” had become a rounding error. Oxfam recently reported that the wealth of 3000 billionaires jumped three times faster in 2025, to its highest ever of $18.3 trillion.

Citigroup’s concept of plutonomy helps explain the current crisis of the status quo, worsening inequality, and global instability.

Citigroup: Everyday people are statistically irrelevant to the economy

The Citigroup report argued that ignoring the 99.99 percent of people was a sound investment strategy. Because the rich account for a disproportionate slice of consumption, economic growth is driven by the spending of the ultra-wealthy rather than the consumer spending of the general population.

This explains the crisis of the status-quo. Share markets hit record highs while wages stagnate and cost-of-living crises worsen. The system is working exactly as designed — for the interests of the ultra-rich, as Thomas Piketty has argued.

For example, the report advised buying a “plutonomy basket” of stocks — luxury brands like Porsche and Bulgari — because the super-rich are price-insensitive. If you had invested in this basket over a 20-year period (1985–2005) and reinvested dividends, you would have seen a massive return of 2,548 percent. By comparison, the general global market returned a mere 400 percent.

While the rest of the world tightens its belt, the “plutonomists” engage in an arms race of conspicuous consumption, driving prices up for goods that signify status rather than utility and diverting real resources away from products and services that benefit the common good.

This diversion of material resources is exemplified by Indian billionaire Mukesh Ambani, who built a $2 billion private compound in Mumbai with 400,000 square feet of living space, while a third of his fellow Indians live in homes that have less space than a US prison cell.

The consumption and labour of almost everyone effectively don’t matter anymore to the headline economic figures — we are statistical ghosts in our own countries. This fuels the sense of deep alienation, anger and resentment that underpins the rise of the far-right.

Inequality is the point of the system

Plutonomy is not an accidental by-product of capitalism. Inequality is the whole purpose. Wealth accumulation enables ultra-rich to decisively outpace average financial returns and rate of profit, and to control social reproduction.

The drivers for this wealth concentration are (among other things) governments captured by the ultra-wealthy, financialised and rentierism, tax changes favourable to billionaires and corporations, and the suppression of wages and unions.

This economic apartheid creates economic and social volatility and extremism. The Citigroup analysts viewed “global imbalances” (the investment banker’s euphemism for imperialism), such as trade deficits and low savings rates, as natural and desirable outcomes of “unequal inequality”.

The deficits of the US, UK and Australia are funded by the savings of developing nations and the labour of the Global South. The plutonomy is transnational; it has no loyalty to the “host” nations. Australia for example is merely a security zone for US hegemony in the Asia Pacific and a source of low-cost commodities like iron ore and gas.

The consequence of the plutonomy and neoliberal, financialised capitalism is that the world is locked into a dangerous quest for perpetual growth to service the elite assets and consumption habits of the global ultra-rich. The plutonomy is actively destroying the earth, creating environmental crises, and wrecking democracies — and the devastation disproportionately immiserates the poor, especially in the Global South. While the “average consumer” in the West is, according to Citigroup, dead, the plutonomy relies on hyper-exploitation of labour in the developing world to keep input costs low for luxury goods and services.

Furthermore, as automation and outsourcing accelerate, more people become part of a “relative surplus population”. Workers are not just exploited, but are being made entirely unnecessary to capital accumulation through further robotisation, automation, gigification and AI. This creates a powder keg for global conflict, as huge swathes of the population are disconnected from the means of survival. Twenty years on from the publication of the Citigroup report, the extreme power of techno-feudalists and Silicon Valley oligarchs is even greater, as Yanis Varoufakis points out.

The plutonomy requires the poverty of the global population. Your poverty suppresses inflation, provides rental payments, pays the price-gouging of monopoly corporations, and maintains cheap, disposable labour necessary for the endless growth in the portfolios of the ultra-rich.

Democracy is the only threat to the plutonomy

The Citigroup report ended with a warning. The only thing that could derail this gravy train is the political power of the non-rich — an investment banker’s way of talking about democracy. The “free market” is a mechanism for the accumulation of capital in fewer hands and is fundamentally anti-democratic — democracy is a risk to capital accumulation that must be managed.

The analysts feared a “backlash” where the electorates of the world might demand a fairer slice of the pie, noting that labour “might not have much economic power, but it does have equal voting power with the rich”.

More democracy, in our economies, societies, workplaces — basically everywhere — is absolutely vital, and the only way that we can tackle the exorbitant power and privilege held by the ultra-rich plutocrats.

Ultimately, the Citigroup plutonomy report removes the mask and reveals that the current global fracture is a battle between the economic power of the few and the political potential of the many.