Christian Grey and the allure of fake billionaires

Christian Grey is sexy. Christian Grey is a billionaire. Christian Grey is a sexy billionaire.

Christian Grey is also, of course, a fictional character – a fantasy. He doesn’t seem to need to spend much time actually working, and the source of his fortune is left utterly vague: all that we’re told is that he owns something named Grey Enterprises Holdings, Inc. But here’s the weird thing: the fictional Christian Grey can teach us a lot about how today’s real-world wealth works, and what the word “billionaire” actually means.

Here’s what it doesn’t mean: that if you take the mark-to-market equity book value of Grey Enterprises Holdings, after subtracting the value of debt and externally-held preferred stock, multiply by the beneficial ownership percentage held by Christian Grey, subtract any of Grey’s own personal liabilities, and add the value of non-corporate assets such as cars, helicopters, and Ed Ruscha paintings, then the resulting net worth calculation will generate a US dollar amount which is at least ten digits long.

Instead, the “billionaire” label is much like all those other labels in Christian Grey’s life: the Omega watches, the Bottega Veneta windbreaker, the fleet of Audis, the Flugzeugbau DG-1001 sailplane, the $269,000 Fazioli piano, the discreet staff. It’s a signifier of power and luxury and conspicuous consumption.

Christian Grey, then, is a “quacks like a duck” billionaire: so long as he looks like a billionaire, and acts like a billionaire, that’s all that anybody cares about. At one point in the novel, Anastasia even calls him a “multimillionaire, billionaire, whatever-aire”. She has no particular interest in the exact number. Still, the enormous discrepancy in wealth between Christian and Anastasia does amplify their sexual power dynamics. Which in turn renders even more problematic a relationship which (if you take it at all seriously) is already more sadistic than masochistic. When you’re dealing with a billionaire, the playing field is never level.

“Quacks like a duck” billionaires like Grey are sometimes actual financial billionaires (Oleg Deripaska and Larry Ellison spring to mind), and sometimes they’re not. The important thing is that you wear the label: it’s so important, indeed, that Donald Trump once asked for $5 billion in damages after a journalist said that he was worth a mere $200 million or so.

If you wear the label convincingly, you develop a very useful aura. Consider money manager and sex offender Jeffrey Epstein, who isn’t a billionaire even though he lives like one. His conspicuous displays of wealth — the largest private residence in New York, the private jets, the private island — served to persuade potential clients that he was “one of us,” but more importantly they helped to create a seductive illusion of stateless impunity. Epstein, like Christian Grey, has hearty and heterodox sexual drives, but Epstein’s are illegal. By creating a bubble of spectacular privilege, he successfully persuaded everybody — not only his friends, but the underage girls he was accused of having sex with — that he was untouchable. It took years for that bubble to burst, and even then he allegedly managed to cut a secret deal giving himself and his co-conspirators immunity from further prosecution.

That bubble was extremely useful to Epstein’s clients, too: the men whose billions he was managing. Epstein’s client list is a closely-guarded secret, and one reason why money managers are so coy about such things is that many of their clients don’t actually want the world to know how rich they are. Did Epstein actually own that house, that island? No one really knows: but if people think that they’re owned by Epstein, then that is a pretty effective way for the true owner to hide his assets.

The Asian version of this story was recently featured in the New York Times, which investigated a 33-year-old Malaysian named Jho Low. Low seems to have ready access to hundreds of millions, if not billions, of dollars — and the top of the story features a splashy image of him partying with Paris Hilton in St Tropez. That’s a methuselah of Cristal she’s holding; she reportedly ordered ten of them, at €35,000 a pop. That works out to roughly $475,000, in 2010 dollars. And you can be quite sure that it wasn’t Hilton footing the bill.

Low was certainly enjoying himself — and at the same time he was cultivating a reputation as being the kind of man capable of dropping half a million dollars a night on going out clubbing. More recently, he has been featured in the Wall Street Journal as the “scion” of a family with a $1.75 billion fortune. Presenting himself as being fabulously wealthy, and presenting the money he has access to as his own, is an effective way for Low to prevent people asking pointed questions about the actual source of those funds. (The Times investigation suggests that the money much more likely to come from corrupt Malaysian politicians than it is from Low’s family.)

Low is a prime example of what you might call a “consumption billionaire”: someone who has a billionaire’s lifestyle, without necessarily having a billionaire’s net worth. And while the lifestyle is expensive, it also comes with access to the kind of investment opportunities that only the very rich get to see. Which in turn can be very lucrative, in a world where it’s a lot easier to to make hundreds of millions of dollars if you start rich than if you start poor.

A recent Fortune story talked about the latest round of funding by hot Silicon Valley startup Slack. Stewart Butterfield, the founder and CEO, explained that if he couldn’t get the cachet of a billion-dollar valuation, then he wasn’t going to raise any money at all. That “psychological threshhold,” he says, is extremely useful when Slack is dealing with Fortune 500 companies. You might think that Slack’s high valuation would make such companies think that they were being ripped off, but in fact the opposite is the case: it gives them confidence that Slack is going to be around for many years to come, and that it’s not going to run into financial difficulties itself, down the road. It’s just another case of money attracting money, and big money attracting big money.

Which, I suppose, explains why Christian Grey never seems bothered by work. His money just magically multiplies in the background, while he can concentrate on chasing ingénues. That’s possibly the biggest fantasy in Fifty Shades of Grey: that once you reach a certain level of wealth, your worldly concerns just slip away and you can concentrate on anything, and anyone, you want. In reality, billionaires are just as stressed as the rest of us. But that doesn’t tend to play so well at the multiplex on Valentine’s Day.

Update: Since this story was published, Mr. Low, through a letter from his lawyers, has challenged what I wrote, and many of the claims in the New York Times story. He asserts that he is not a “fake billionaire”; that he has never acted as a front for wealthy individuals or corrupt politicians; and that he is not involved in any illegal conduct whatsoever. Certainly, I never intended to imply that Mr Low was guilty of any of the crimes of which Jeffrey Epstein has been accused. In contrast to Jeffrey Epstein and Christian Grey, Mr Low has been accused of no sexual misconduct whatsoever.