At a global level, the top 1% (60 million people), and
particularly the even more select few in the top 0.01% (600,000 individuals –
there are around 1,200 billionaires in the world), the last 30 years has been
an incredible feeding frenzy.
Inequality has grown dramatically in many countries. In the US the share of
national income going to the top 1% has doubled since 1980 from 10 to 20%. For
the top 0.01% it has quadrupled to levels never seen before.
This goes way beyond America . In the UK inequality is
rapidly returning to levels not seen since the time of Charles Dickens. In China the top
10% now take home nearly 60% of the income. Chinese inequality levels are now
similar to those in South
Africa , which are now the most unequal
country on earth. Even in many of the poorest countries, inequality has rapidly
grown.
Globally, the incomes of the top 1% have increased 60% in 20
years. The growth in income for the 0.01% has been even greater. Following the
financial crisis, the process has accelerated, with the top 1% further
increasing their share of income.
The luxury goods market has registered double digit growth
every year since the crisis hit. Whether it is a sports car or a super-yacht,
caviar or champagne, there has never been a bigger demand for the most
expensive luxuries.
These are some of the statistics collected
together in “The cost of inequality: how wealth and income extremes hurt us
all”. This is Oxfam’s contribution to an avalanche of analyses and opinions
tumbling out in the days leading up to the gathering of the super-rich and
their hangers-on in Davos this week.
Mostly they are aimed at trying to steer the discussion and
debate amongst the rich and powerful leaders of the global corporations who
make up the membership of World Economic Forum.
But in its oh-so-gentle warning “Occupy protests
demonstrated the increasing public
anger and feeling that inequality has gone too far”, Oxfam
isn’t telling the WEF something it doesn’t know already. “Severe Income
Disparity” is, after all, one of the top ten global risks
featured in the report the WEF commissioned for itself.
There may well be quite a number of well-meaning, even
enlightened multi-billionaires in attendance, in between visits to the ski
slopes. After all, Bill Gates and Warren Buffet are way up there on the list of
the world’s richest and having seen the writing on the wall they’ve committed
to giving away truly huge amounts of money. Buffet is even calling for greater
taxes on the rich.
Oxfam argues that extreme wealth and inequality is
economically inefficient, politically corrosive, socially divisive, environmentally
destructive, unethical and not inevitable. The charity lists a range of
measures to reduce the gap that have worked in the past, and could work in the
future.
But what they don’t do is to look behind the shocking
statistics to explain why the disparity between rich and poor has grown so far
and so fast in the last 30 years. If they did, they’d be looking at a
profit-driven social, economic and political system which for its survival
ensures that the ownership of the world’s resources is concentrated in fewer
and fewer hands
In the good times, at least, the value of those resources
expands by putting more and more people to work and paying them a declining
share of what they produce until they are no longer able to afford the things
they produce. And then, in the consequential bad times (like now), the same
system is driven to destroy the surplus capacity that is the result of all that
accumulation.
So yesterday, the International Labour Organisation reported
that the number of unemployed globally is expected to pass the 200 million mark
this year. The WEF has nothing to offer humanity and the anger that Oxfam
refers to needs to be channelled into making the Davos gathering history.
Gerry Gold
Economics editor
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