In an inauspicious start to the new year, one of the world’s most prominent charities issued a new report finding that, as of 2015, a little over sixty individuals own more wealth than 3.5 billion people — half the world’s population. According to The Guardian:
Oxfam said that the wealth of the poorest 50% dropped by 41% between 2010 and 2015, despite an increase in the global population of 400m. In the same period, the wealth of the richest 62 people increased by $500bn (£350bn) to $1.76tn.
The charity said that, in 2010, the 388 richest people owned the same wealth as the poorest 50%. This dropped to 80 in 2014 before falling again in 2015.
Mark Goldring, the Oxfam GB chief executive, said: “It is simply unacceptable that the poorest half of the world population owns no more than a small group of the global super-rich – so few, you could fit them all on a single coach”.
I concur. In a world where millions still die annually from easily treatable and preventable causes, and where hundreds of millions struggle just to get by each day, it is unfathomable that a mere busload of people could control so much wealth (and with it, power).
Moreover, the problem is only worsening with time. The year before, in 2014, it was 80 individuals whose combined wealth totaled half the world’s; in 2010, it was close to 400 people. Those years were already highly unequal, but the degree of concentration is visibly worsening with time.
This trend says a lot about the changing nature of the global (as well as many national) economy. As once widely-available and well-paying jobs get gutted, the only avenues left to make money is through the opaque and complex world of finance, which has a high barrier of entry to the average person. Economies are working less for middle class and poor people, and more for those who own, invest, and manage companies (more often than not born into such wealth in the first place).
Oxfam’s proposed solutions are straightforward in principle, but difficult in practice:
Oxfam said a three-pronged approach was needed: a crackdown on tax dodging; higher investment in public services; and higher wages for the low paid. It said a priority should be to close down tax havens, increasingly used by rich individuals and companies to avoid paying tax and which had deprived governments of the resources needed to tackle poverty and inequality.
Oxfam cited estimates that rich individuals have placed a total of $7.6tn in offshore accounts, adding that if tax were paid on the income that this wealth generates, an extra $190bn would be available to governments every year.
The charity said as much as 30% of all African financial wealth was thought to be held offshore. The estimated loss of $14bn in tax revenues would be enough to pay for healthcare for mothers and children that could save 4 million children’s lives a year and employ enough teachers to get every African child into school.
The amount of resources and political will needed to implement these measures will not be easy, even with the growing chorus of popular concern about the problem (not to mention the mounting warnings by economists, academics, policymakers, religious leaders, and other leading figures).
Moreover, this approach assumes that countries will be willing and able to put this lost revenue to good use; given the considerable influence that wealthy elites have over governments — indeed, how else did they get away with stashing so much wealth? — to say nothing of the inefficiencies and perverse incentives inherent in a lot of state bureaucracies, addressing this problem will take a lot of time, effort, and mass political action. It seems inevitable that something will come to a head.
What are your thoughts?