Eight men own 50% of the world’s wealth, according to a new report by Oxfam. Eight men. Less than a football team. Less than the number of people at my family’s Christmas lunch.
This shocking statistic comes from Oxfam’s report, An Economy for the 99%, which indicates that global inequality is much, much worse than previously realised. And it isn’t an accident. Our economy has been designed this way.
Last year it was believed that 62 people had the same wealth as the poorest half of humanity. Now with new and better data available from populations in China and India, the grim reality of our laissez-faire nightmares has been stripped bare.
Oxfam reports that the number of billionaires is growing by 11% every year and if current trends continue, the world could see its first trillionaire by 2035.
In the past 25 years, the top 1% have gained more income than the bottom 50% combined. Remind me when that wealth is meant to start “trickling down” exactly?
Not surprisingly, the majority of the poorest half of humanity live in Africa and Asia, where the gap between billionaires and most other citizens should be criminalised.
“That so much wealth is now in the hands of just eight people – and that this fact can coexist in a world with extreme poverty which sees one in 10 people surviving on less than $2 a day – highlights how broken our economic system really is,” said Helen Szoke, CEO of Oxfam Australia.
Africa, a continent brimming with natural resources, sees a large chunk of its wealth leaving its shores. This represents one of the most deceptive characteristics of using GDP as an economic barometer. While GDP can measure all economic activity within a particular country during a particular period, it fails to account for whether or not the value earned from that activity stays within its borders. This was exemplified when BHP Billiton undertook extensive gold and copper mining in Papua New Guinea during the 1980’s. PNG’s GDP grew considerably but almost all of the income went to foreign owners: natural wealth that should have benefited Papua New Guineans was moved offshore and much of the country continued to live in economic poverty. Economist Joseph Stiglitz, who has been warning against the shortfalls of GDP for over a decade, points out that PNG was also left with enormous environmental damages, and once BHP had paid a multimillion dollar settlement, the company was then indemnified from any future liability.
“Under my government, Australia’s GDP is growing faster than any G7 economy,” tweeted Malcolm Turnbull last year. Given that the vast majority of us are not economists, we are misled into believing that GDP must give a comprehensive illustration of the nation’s health and, importantly, societal wellbeing. As Stiglitz explains, if rising inequality leads to greater violence, and higher spending to combat that violence, this will show up as a rise in GDP – not exactly the best metric for a nation’s prosperity. Not only does GDP not account for societal wellbeing – or levels of equality – it doesn’t account for environmental degradation, which often sees a country’s natural riches depleting while its GDP skyrockets.
It is these economic myths we are fed which have helped to sustain our modern global economy and created the great injustices we are living with today. But inequality of this magnitude has not always existed, and, importantly, inequality seen as an injustice is a relatively new phenomenon.
The industrialisation of Britain and the US marked a period of sharp income widening and heralded the beginnings of economic inequality seen as an injustice. Though epochs of vast wealth came and went before that, the eighteenth and nineteenth centuries were characterised by collective demand for greater distribution in the West. The Age of Enlightenment in seventeenth century Europe propelled advances in both medical science (resulting in greater health and longevity) and industrial technology. These advances set in motion a tidal wave that catapulted the West on its path of “progress”. The “robber barons” in the US built empires and obscene fortunes in railroads, finance, steel and oil, while industrial workers began to earn more than their rural counterparts. The result was an enormous and rapid widening of the income gap in the US and Western Europe.
Perhaps due to the opportunistic atmosphere of the time, these great disparities created a rumbling of political mobility and workers’ struggles resulting in a rise of communist ideologies, workers’ unions and social demands. Following a stock market crash in 1929, progressive taxes and social welfare took root in the US. An era of great income equality was underway, which would last until the 1970’s and then begin a sharp reversal.
While citizens had successfully obtained greater social and political inclusion, this was not without the big capitalists hurtling miles ahead of them. The industrial revolution was perhaps the prelude for the corporate heavyweights getting cosy in Washington and their profound political sway, in the US and abroad, was something that would continue unadulterated into the twenty-first century.
With banking becoming big business in the 1980’s, and devastating structural adjustment policies rolled out across the global South, neoliberal economics began digging its thick roots into the fabric of our societies.
Along with the misguided belief that free markets will naturally correct themselves, which we are continually seeing evidence to the contrary, a very sinister individualistic, dog-eat-dog, sink or swim attitude has pervaded our culture and profoundly affected our behaviour towards one another.
This attitude is displayed by apologists for wealth concentration amongst the so-called hardworking “risk takers” in the corporate world. It’s this attitude which surely buttresses the argument for dismantling universal healthcare in the US and other attacks on social safety nets: where some of the most peculiarly ardent anti-welfare proponents are the downtrodden and the working classes.
We have been so expertly fed the myth that the wealthy are at least partly deserving of the billion dollar rewards that come with high-pressure jobs or cutting edge innovation in their fields, forgetting that most of the hardest working people in this world have names you’ll never know, not to mention likely come from countries whose wealth was appropriated (i.e. stolen) for the development of Europe and other imperial powers.
We idolise the rich, the famous, the high rollers, the billionaires. Rather than wanting to topple the infrastructure that placed them there and redistribute the wealth, we respect, envy and admire them, even while we hate them. We do whatever we can to get a fatter slice of the pie – or just a seat at the table where they’re eating. While we look to the rich for any hint of their secret to success – mindfulness, meditation, a fast-tracked MBA – we admonish the poor for their hand-outs and excuses.
In his book, Who’s the Fairest of Them All?, US economist Stephen Moore, who founded the conservative right-wing group the “Club for Growth”, argues for the basic necessities such as food, shelter and clothing to be provided for disadvantaged persons during times of hardship by basic “safety nets” but that anything beyond this, such as high taxation of the wealthy is a “violation of personal liberty… It is not fair to the productive, to the risk takers, to the hardworking, to deprive them of what they have produced merely to make them equal to others who have worked less, taken less risk and produced less”.
It’s hard to understand how anyone who doesn’t have the IQ of a baked potato could argue that wealth creation in corporate America is made purely by productivity, risk and hard work, and that all other Americans have just as much opportunity to do so, if they’d only get off the couch and try. As Winnie Byanyima, Executive Director of Oxfam International, writes, “The world’s wealthiest did not earn their spoils through their own hard work. More than half of the world’s billionaires either inherited their wealth, or accumulated it in industries prone to corruption and cronyism.”
Research published by PJ Henry and his team in the Journal of Applied Social Psychology found that most Americans are in favour of programs to help the “poor” but respond negatively to programs aimed at “welfare recipients”, despite the two terms being almost interchangeable.
Similar hostility to welfare has seemingly been on the rise in Australia, where “dole bludgers” and lazy millennials receiving financial assistance for university are blamed for blowing out the national budget, despite ATO data showing that more than one in three large companies in Australia are paying zero tax. In December last year, Turnbull told 3AW radio that to overcome Australia’s “bump in the road” – and by that he meant a short fall in GDP – reducing company taxes should be on the agenda.
While six of the eight richest men named in Oxfam’s report are from the US (the other two are from Spain and Mexico), Australia is not immune to rising inequality. Australia’s two richest billionaires own the same wealth as the poorest 20% of the country, and our income inequality is also rising.
Right now, political and business leaders are meeting at the annual World Economic Forum in Davos. This will mark the first time a Chinese head of state has attended the event, just days before the inauguration of a US President vowing to slap Chinese imports with huge tariffs and other protectionist measures.
It’s been a tumultuous year for global politics and one that has surely been driven by an undercurrent of dissatisfaction with rising inequality. This was capitalised on by opportunistic politicians as refugees and migrants were often used as scapegoats for invading borders to steal jobs and drain the national purse. Again, the downtrodden are trampled upon while the wealthy enjoy their pie.
Featured image: Kids playing in a Delhi slum, 2012 (Credit: Michal Huniewicz/Flickr)
There was previously an error in the title of this post, which stated “8 men own half the world’s wealth”. This has now been updated to reflect the correct research finding that “8 men own the same wealth as the poorest 50% of humanity”.
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