Superyachts and the Super Rich
Superyachts, like the billionaire class, shouldn’t exist. We need to institute a global wealth tax, shut down tax havens, and, yes, take their boats.
The superyacht Lady Lau in the port of Bonifacio, Southern Corsica, France. Myrabella / Wikimedia Commons
Hedge fund billionaire Daniel Loeb recently found himself in hot water after it was discovered that his superyacht had damaged Belize’s fragile barrier reef. Operators of the Samadhi — Buddhist for “a state of meditative consciousness and enlightenment” — had anchored the superyacht to live corals at the Lighthouse Reef Atoll, a Unesco World Heritage site.
Loeb was apologetic and promised to help fix the damaged reef. But the incident speaks volumes about the global billionaire class, whose fortunes grew by 25 percent last year. Today, the twenty-six richest people have more wealth than the world’s poorest 3.8 billion. What are the super-rich doing with all this money? For one thing, they’re buying boats.
Here are four things we can learn about the super-rich from their superyachts.
1. They Live in Their Own World
There are nearly five thousand superyachts (boats longer than thirty meters) sailing the world’s seas. But unless you’re a billionaire, a friend of a billionaire, or a pirate, you’ve probably never even seen a superyacht, let alone stepped foot on one.
On board these floating palaces are the uber-rich — the high-net-worth individuals who run the world. These individuals pull the levers of the global economy, but they are, for the most part, hidden from ordinary people, moving from their luxury high-rises to their private planes to their enormous boats.
This closed and relatively small network of elites is demonstrated and solidified through the consumption and display of luxury goods. The billionaires — from Saudi oil tycoons to Russian oligarchs to Silicon Valley tech royalty — meet at the Monaco Yacht Show to compare mast size, trade tips on how to protect a Picasso from saltwater damage, and form business partnerships.
2. They Are Above the Business Cycle
Manufacturing output is declining in a growing number of countries around the world, but yacht production is going strong. Superyacht orders have grown year over year for the past five years, and yacht builders in Britain, Italy, Germany, and the Netherlands expect to see 20 percent growth in the coming decade. The .01 percent aren’t blown off course by economic headwinds.
In fact, when the business cycle goes south, and ordinary people are sucked into its maw, the super-rich often benefit. While the UK’s British Home Stores chain tanked, and 20,000 pensioners were set adrift, Topshop tycoon Philip Green was at his leisure on his £100 million superyacht Lionheart.
Superyacht owners have also proven themselves worthy pirates. Jho Low — the financier who siphoned $4.5 billion from the Malaysian government — bought himself at $250 million boat that he called “Tranquility.”
3. They Don’t Care About the Planet
As the planet alternates between burning and flooding, more and more wealthy people have expressed their concern. They sign up for the Giving Pledge. They start foundations. They donate money to save the polar bears. They also buy bigger and bigger boats. The number of boats longer than 60 meters — 364 — has doubled in the past decade. Russian oligarch Farkhad Akhmedov’s £350 million superyacht (which he has been desperately trying to keep out of the hands of his ex-wife, Tatiana) has two helipads, a swimming pool, a mini submarine, and nine decks.
Ever attuned to changing tastes, however, yacht designers are now touting “sustainable yacht design.” The world’s first environmentally friendly superyacht is being built — a $644 million hydrogen-powered yacht complete with infinity pool, helipad, and gym. For the millennials who purportedly care about experiences more than things, yacht designers are building solar-powered “explorer” yachts that can break through arctic ice and travel for weeks without a refuel.
4. They Should Pay a Lot More in Taxes
The superyachts at this year’s Monaco Yacht Show alone were worth a combined $2.7 billion. Superyacht owners spend upward of $750 million for their boats. They hire dozens of people to crew them, spending between $5 and $10 million a year to cruise from one hotspot to the next. But money is no object for these billionaires. Indeed, it seems to fall into their laps through windfalls like the Trump tax cuts, which fueled a number of fresh superyacht purchases.
Superyachts also serve as handy floating tax havens. As the Paradise Papers investigation showed, elites go to great lengths to avoid paying taxes on their luxury purchases. Superyachts have the advantage of being mobile, making it much easier to evade the tax man. Big boats are also a good place to hide other, smaller luxury purchases, like artwork and jewelry.
Superyachts encapsulate everything wrong with our for-profit system — as billions struggle to survive, and the planet tumbles toward ecological catastrophe, the world’s richest people sail away, sheltered from the rough seas of capitalism.
These superyachts, like the billionaire class, shouldn’t exist. We need to institute a global wealth tax, shut down tax havens, and, yes, take their boats.