How to Become an Oligarch

WASHINGTON, DC – Let’s say that you would like to become one of the richest people on the planet, someone with enormous wealth and access to the top rung of political power. This is not an unreasonable aspiration for any fresh college graduate in today’s winner-take-all economies. But how realistic is it?

You could have a good idea for a new technology with potentially widespread demand. With the right credentials and some luck, you could attract investment from a venture-capital fund. Many such ventures do not pan out; but – particularly in the United States – such equity-financed rapid-growth companies are strongly encouraged.

Or you could issue a lot of debt. This might seem like a strange idea in the immediate aftermath of a major debt-fueled financial crisis, and with many homeowners still underwater on their mortgages (they owe more than the house is worth, even if they can still afford the monthly payments). In any case, to the extent that any recent American graduate thinks about debt, it is in the context of paying student loans.

But a new book, Private Equity at Work, by Eileen Appelbaum and Rosemary Batt, explains exactly how a few people have become immensely rich through the shrewd strategic use of debt.