New estimates show that just eight men own the same wealth as the poorest half of the world.
The estimated US$426 billion worth of assets attributed to just a handful of men, including Bill Gates of Microsoft, Mark Zuckerberg of Facebook, and Jeff Bezos, the founder of Amazon, is equal in value to that owned by the poorest 3.6 billion people on the planet.
These figures have come to light in an Oxfam report released today to coincide with the opening of the World Economic Forum (WEF) in Davos, Switzerland.
While world leaders come together to discuss global growth and development, Oxfam has used its most recent report to highlight the growing problem of rising economic inequality and the threat that is poses to global development.
“It is beyond grotesque,” Mark Goldring, chief executive of Oxfam GB said. “This year’s snapshot of inequality is clearer, more accurate and more shocking than ever before.”
The report points out that, despite world leaders signing up to a global goal to reduce inequality, the gap between the rich and the rest continues to widen.
And the figures are truly staggering.
- Since 2015, the richest 1 percent has owned more wealth than the rest of the planet.
- Over the next 20 years, 500 people will hand over US$2.1 trillion to their heirs – a sum larger than the GDP of India, a country of 1.3 billion people.
- The incomes of the poorest 10 percent of people increased by less than $3 a year between 1988 and 2011, while the incomes of the richest 1 percent increased 182 times as much.
- A FTSE-100 CEO earns as much in a year as 10,000 people in working in garment factories in Bangladesh.
- In the US, new research by economist Thomas Piketty shows that over the last 30 years the growth in the incomes of the bottom 50 percent has been zero, whereas incomes of the top 1% have grown 300 percent.
- In Vietnam, the country’s richest man earns more in a day than the poorest person earns in 10 years
Oxfam warns of the dangers of leaving these troubling trends unchecked.
The growing inequality is responsible for a number of deepening problems across the globe. It increases crime and insecurity in communities and undermines the efforts to reduce poverty, a movement that has seen success in recent decades with hundreds of millions of people being lifted out of poverty.
As more people are forced to live in fear and with diminishing hope for the future, disillusionment takes hold and from this we see the rise of concerning phenomenon such as racism and nationalism.
The report points to Brexit and Donald Trump’s election victory as products of this disillusionment, listing wage stagnation, insecure jobs and the widening gap between the haves and the have-nots as reasons for the population’s lack of willingness to tolerate the status quo.
The situation in developing nations is also showing some troubling trends. Despite the progress on reducing poverty, one in nine people still go to bed hungry.
Oxfam’s early estimations of poverty have also been proven to be highly underestimated. Last year, Oxfam said the world’s 62 richest billionaires were as wealthy as half the world’s population. However, this number dropped to just eight men when information showed that poor people in China and India owned fewer assets than previously thought, making the bottom 50 percent even worse off and widening the gap between rich and poor further.
Oxfam points out perceived causes of the deepening crisis. And places the blame squarely at the feet of big business and the super-rich.
Big corporations did well in 2016 with profits for some of the big hitters soaring, so much so in fact that the world’s ten biggest corporations together have revenue greater than that of the government revenue of 180 countries combined.
But we are seeing increasingly big business’s desire to work for the rich and a refusal to spread the benefits of economic growth to those that need it. By striving to turn profit and reward shareholders at any cost, many top companies are squeezing workers resulting in over working, wage stagnation and, in some cases, even a cut in wages.
The widespread occurrence of tax avoidance by some the world’s biggest business also came to light last year. It appears tax avoidance is purely business as usual for many of these corporations in their pursuit to maximise profit. But all of this comes at the cost of vital public services and economic growth for the most vulnerable in society.
The report also points to the control that big business wields in the corridors of power. With profits soaring and influential stake holders, many corporations are able to pull the strings that dictate policy, furthering their own cause often at the expense of poorer people.
While pointing out the seriousness of the situation, the Oxfam report also proposes a method of correcting the path of the global economy.
Based on research carried out by Hoy and Sumner in their 2016 report, “Gasoline, Guns, and Giveaways: Is There New Capacity for Redistribution to End Three Quarters of Global Poverty?” Oxfam believes that three-quarters of extreme poverty could in fact be eliminated now using existing resources.
By increasing taxation and cutting down on military and other regressive spending, as well as implementing a more ‘human’ approach to our economy, we can stymie the slide into further inequality.
The human economy, as imagined by Oxfam, would look after the 99 percent, rather than the top 1 percent of society. It would be based on core principles of cooperation rather than competition, business plans that operate sustainably and that benefit everyone, forcing the super-rich to pay their fair share of tax, harnessing of new technology to benefit the masses, the development of sustainable renewable energy, and, at the very heart of the principle, gender equality.
The juxtaposition of having staggering poverty and yet so much obscene wealth in the world is nonsensical. To have so much money in the hands of so few, while so many go hungry is illogical. This, along with concern for the future, is a point that is driven home in today’s report. To rectify the absurdity of the situation, Oxfam has shown that we must act.
Their positive outlook for a ‘human’ future is possible if we adapt our current thinking and arrive at a new common consciousness in which money does not trump humanity.
Given the escalating inequality across the globe, the increasing disenfranchisement of large swathes of the population, and the growing sense of insecurity, this needs to happen sooner rather than later.
As Oxfam puts it, “we can and must build a more human economy before it is too late”.