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Why have the rich turned against President Barack Obama?

That has been a persistent theme of this campaign: We were reminded of it at the beginning of this week, when Mitt Romney’s team raised more money than the president’s for the second month running, and more colorfully in weekend reports of the Republican candidate’s lavish fund-raisers in the Hamptons.

If you were a Martian, or even a European, the animosity of America’s 1 percent toward the president might be rather mysterious. Although those at the bottom and in the middle are still suffering from the downturn that began in 2008, with unemployment above 8 percent, the affluent economy has bounced back quite smartly. The stock market has recovered, corporate coffers are overflowing with cash, and the luxury goods market is booming.

Even Wall Street, where hostility toward the White House is especially acid, has reason to be grateful. Bankers got the biggest government bailout of all – much more than laid-off workers or beleaguered homeowners received from this Democratic administration – and the president resisted calls from the left to nationalize the banks he rescued, as did the British.

Part of the answer is simple self-interest. As the economics writer Matthew Yglesias has argued, there is one easy and obvious explanation for the animosity of the rich toward the incumbent: He wants to raise their taxes significantly. That is certainly right. On Monday, Obama reiterated his support for letting the Bush-era tax cuts for household incomes of more than $250,000 expire, while keeping the lower rates in place for everyone else.

This is a powerful point. It can be tempting to imagine that the affluent might fret less about their tax bills than the poor, who are struggling to get by, but the elaborate tax avoidance strategies of superrich Americans suggest otherwise.

But this is about more than bank balances. Some of Obama’s most vehement critics in the private sector insist they are willing to pay higher taxes, if that’s what it takes to get the United States back on track. Their complaint, if you take them at their word, is instead with the president’s attitude toward them, toward their wealth and toward capitalism itself.

Their sense of insult is easy to mock: Do those testosterone-pumped Masters of the Universe really turn out to have the tender feelings of teenage girls? It is a mistake, though, to dismiss the outrage of the 1 percent just because it is so emotionally rendered. The truth is that Obama is telling a very different story about capitalism and its winners from the one Americans are accustomed to hearing, and it is no surprise that the rich don’t like it one bit.

Consider the two narratives on the campaign trail this week. In Colorado, Romney described those who make more than $250,000 a year with the Republican term of art — “job-creators.” And he warned that the president’s proposal to raise taxes at the top wasn’t bad just for the rich, it would hurt the whole country, too:

At the very time the American people are seeing fewer jobs created than we need, the president announces he’s going to make it harder for jobs to be created. I just don’t think this president understands how our economy works. Liberals have an entirely different view about what makes America the economic powerhouse it is.

Obama, meanwhile, insisted that “we love folks getting rich.” But his focus is different: “I do want to make sure that everybody else gets that chance as well.” One way to do that is to tax the rich. As a new television ad for the president argued this week, Obama’s plan is to “ask the wealthy to pay a little more so the middle class pays less, eliminate oil subsidies and tax breaks for companies that outsource.”

This is more than a fight about taxes. It is a fight about whether 21st-century capitalism is working for the American middle class and who should pay to fix it. The Republicans are telling Ronald Reagan’s story of trickle-down economics – the winners in the capitalist contest are “job-creators” whose prosperity helps everyone else. The wealthier they are, the wealthier all Americans will be.

The Democrats are challenging that win-win story of American capitalism. Their contention is that the U.S. economy is failing the middle class. They argue that those at the top need to contribute “a little more” to help rebuild the American middle. Even more threateningly, they point out, as in their critique of Bain Capital, that some of the business strategies that have enriched the elite have actually hollowed out the middle.

It is this last argument that most enrages the 1 percent – and it should. Obama’s most extreme critics delight in accusing him of being socialist and sometimes communist. That charge is not just overheated, it is plain wrong. But American capitalists are right to sense a challenge from the White House, which is about more than tax rates or bruised pride. The president is arguing that what works for the top of the United States isn’t working for the middle, and that is a criticism the country’s lionized elite hasn’t heard from its leader in a very long time.

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Chrystia Freeland is a Reuters columnist.

Photo: Reuters

To understand the significance of the presidential election this weekend in Russia, read a book by two U.S.-based academics that is being published this month. Why Nations Fail by Daron Acemoglu and James Robinson, of the Massachusetts Institute of Technology and Harvard University, respectively, is a wildly ambitious work that hopscotches through history and around the world to answer the very big question of why some countries get rich and others don’t.

Their one-word answer, as Acemoglu summed it up for me, is ‘‘politics.’’ Acemoglu and Robinson divide the world into countries governed by ‘‘inclusive’’ institutions and those ruled by ‘‘extractive’’ ones. Inclusive societies, with England and its Glorious Revolution of 1688 in the vanguard, deliver sustainable growth and technological innovation. Extractive ones can have spurts of prosperity, but because they are ruled by a narrow elite guided by its own self-interest, their economic vigor eventually fades.

‘‘It is really about societies that have a more equitable distribution of political power versus those that don’t,’’ Acemoglu told me. ‘‘It is about societies where the elite, the rich, can do what they want and those where they cannot.’’

For many of us, that is a welcome conclusion. It may also seem to be an obvious one. But Acemoglu pointed out that academics, policymakers and business leaders have often advanced quite different views. One perspective is that all that matters is economic growth and the right technocratic mix of policies necessary to deliver it. This approach, implicit in the prescriptions of so many International Monetary Fund missions, is that if countries can get richer, everything else will fall into place.

A version of this view, which has gained particular currency since the collapse of the Soviet Union, is that the key is private property. Establish property rights, the reformers in Warsaw, Moscow and Beijing believed, and economic and social success will inevitably follow.

But Acemoglu and Robinson argue that if an extractive regime is in charge, neither wealth nor private property can save a country from eventual decline. The Russia of today, they believe, is a textbook extractive regime, and that is what makes the vote this weekend, and the unexpected protests that preceded it, so significant.

‘‘Russia is ruled by a narrow clique,’’ Acemoglu said. ‘‘The only thing that is keeping it going is a big boom in natural resources and a clever handling of the media.’’

The point, Acemoglu argues, is that wealth in and of itself doesn’t lead to sustained growth: ‘‘Saudi Arabia can get a lot of growth, but that is not the right growth. Take away the oil and Saudi Arabia would be like a poor African country.’’

A crucial argument Acemoglu and Robinson make — and one foreign aid donors and policy advisers too often miss — is that the leaders of extractive regimes don’t implement policies that stifle sustainable growth out of ignorance. They aren’t stupid; they are merely and rationally pursuing their own self-interest. The real ignorance is that of outsiders who fail to appreciate that in an extractive regime, the interests of the rulers and the ruled do not coincide.

‘‘When you think of somebody like Chávez, you will see that his objective is not to enrich Venezuela,’’ Acemoglu said, referring to President Hugo Chávez. ‘‘He is not letting markets work because his goal is something else.’’

Acemoglu and Robinson’s analytical framework helps to make sense of one of the seeming paradoxes of the past 12 months — the prosperous middle-class people who have taken to the streets in the Arab world, in India and in Russia to protest crony capitalism. If you believe that economic growth today is a sufficient condition for long-term prosperity, these affluent agitators are puzzling. That leads observers to search for softer grievances, like the quest for dignity.

But Acemoglu and Robinson believe that dignity and long-term prosperity are intimately connected. The protesters, who put the demand for political rights ahead of everything else, are right; the academic consensus that argues they should simply focus on the correct economic policies is wrong.

In the early Putin era, the Acemoglu and Robinson approach was very much a minority view. As recently as 2008, an essay in Foreign Affairs by another pair of influential Western scholars laid out the ‘‘conventional explanation for Vladimir Putin’s popularity’’ thus: ‘‘Since 2000, under Putin, order has returned, the economy has flourished, and the average Russian is living better than ever before. As political freedom has decreased, economic growth has increased. Putin may have rolled back democratic gains, the story goes, but these were necessary sacrifices on the altar of stability and growth.’’

But in their Foreign Affairs essay those scholars strongly disagreed: ‘‘This conventional narrative is wrong, based almost entirely on a spurious correlation between autocracy and growth. The emergence of Russian democracy in the 1990s did indeed coincide with state breakdown and economic decline, but it did not cause either. The reemergence of Russian autocracy under Putin, conversely, has coincided with economic growth but not caused it (high oil prices and recovery from the transition away from communism deserve most of the credit).’’

The essay’s authors concluded with a prediction about Russia’s future that fits neatly within the framework of extractive versus inclusive institutions and labels Putin’s Russia the former: ‘‘The Kremlin talks about creating the next China, but Russia’s path is more likely to be something like that of Angola — an oil-dependent state that is growing now because of high oil prices but has floundered in the past when oil prices were low and whose leaders seem more intent on maintaining themselves in office to control oil revenues and other rents than on providing public goods and services to a beleaguered population.’’

Acemoglu and Robinson are pretty tough on Western experts, officials and business people who, they believe, are too easily seduced by the leaders of extractive regimes, particularly ones enjoying temporary bursts of prosperity.

But the 2008 Foreign Affairs essay highlights a very important exception. One of the authors of that devastating critique of Putinism was Michael A. McFaul, the new U.S. ambassador to Moscow. That appointment, lauded by many inside and outside Russia for utilizing the skills of an acknowledged Russia expert, may be one reason to be hopeful about Russia today.

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Chrystia Freeland is editor of Thomson Reuters Digital.