Oxfam International has released a damning report on global inequality just as the global elite meet in Davos, Switzerland for the 2016 World Economic Forum.
According to the report [PDF], the 62 richest billionaires in the world own as much wealth as the poorer half of the planet’s population — 3.6 billion people. In all, the richest 1% have more wealth than all of the rest of the world combined.
Oxfam also noted that the gap between rich and poor is growing larger, with the wealth of the poorest 50% dropping by 41% while the wealth of the richest 62 people increased by $500bn between 2010 and 2015.
Given the great divergence between the 1% and the 99%, it’s not surprising that a recent survey by corporate PR firm Edelman showed a significant “trust disparity” between elites and everyone else. Elites, again not surprisingly, think everything is wonderful while the overwhelming majority of the world’s population have little faith in elites.
Such high global inequality thwarts democratic progress as well as undermining urgency for collective problems like climate change. We are not all, it seems, in the same yacht.
It is also worth noting that, under capitalism, the global neoliberal elite are rarely innovators or dedicated to solving important social or material problems. As Oxfam details, many of the global 1% are parasites who are wealthy from engaging in rent-seeking behavior to the benefit of none but themselves and the costs borne by everyone else:
The practices of so-called ‘crony sectors’ illustrate how benefit-free wealth can be accrued to such a massive extent. Crony sectors are those that are vulnerable to monopoly or that have a large degree of state involvement, including government authority to provide licences to operate. The increase in billionaire wealth from crony sectors also suggests that wealth and income are being accrued in ways that do not deliver associated benefits or value to the rest of society.
Using Forbes data to calculate the wealth concentrated in crony sectors, The Economist finds that billionaires from emerging economies who have generated their wealth, at least in part, from these sectors doubled their wealth relative to the size of the economy between 2000 and 2014.91 It also finds that individuals have benefited from urbanization and the associated increase in land and property values; the commodity price boom has enriched natural resource owners from Brazil to Indonesia; and privatizations, some of which have taken place on dubious terms, have also led to lucrative returns for new private owners.
From Wall Street to the old landowning families getting rich off inherited land, the 62 billionaires and their fellow 1%ers are not building better mouse traps, they are using their power and influence to suck blood out of the real economy.
How long can such a system endure?