New Orleans The headline, sound bite from the Oxfam report, “Working for the Few: Political Capture and Inequality,” released on the eve of the World Economic Forum for the rich and business elite at Davos, Switzerland, was the fact that 85 individual super-rich have as much citizen wealth as half of the world’s population. Indeed, the fact that each of those mega-millionaires has as much wealth as more than 40 million people is simply staggering. The bottom line of the report is that the rich have so much money that they have thoroughly captured the political system and bent it to their will and further riches, exacerbating inequality to the record levels we face today.
To give some props to Oxfam, when you actually read the report, there’s more to the report than even that glaring headline. Here’s their case:
• Almost half of the world’s wealth is now owned by just one percent of the population.
• The wealth of the one percent richest people in the world amounts to $110 trillion. That’s 65 times the total wealth of the bottom half of the world’s population.
• Seven out of ten people live in countries where economic inequality has increased in the last 30 years.
• The richest one percent increased their share of income in 24 out of 26 countries for which we have data between 1980 and 2012.
• In the US, the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer.
Following this brief and survey results indicating in 6 countries that people overwhelming believe that the political system has been captured by the rich, 80% in Spain for example, their laundry list of recommendations is hard to argue with. They believe the rich should:
• Not dodge taxes in their own countries or in countries where they invest and operate, by using tax havens;
• Not use their economic wealth to seek political favors that undermine the democratic will of their fellow citizens;
• Make public all the investments in companies and trusts for which they are the ultimate beneficial owners;
• Support progressive taxation on wealth and income;
• Challenge governments to use their tax revenue to provide universal healthcare, education and social protection for citizens;
• Demand a living wage in all the companies they own or control
The particular combination of policies required to reverse rising economic inequalities should be tailored to each national context. But developing and developed countries that have successfully reduced economic inequality provide some suggested starting points, notably:
• Cracking down on financial secrecy and tax dodging;
• Redistributive transfers; and strengthening of social protection schemes;
• Investment in universal access to healthcare and education;
• Progressive taxation;
• Strengthening wage floors and worker rights;
• Removing the barriers to equal rights and opportunities for women
OK, maybe it’s pie in the sky, but it’s hard for me to disagree that it would be heaven on earth compared to the one-way world 99% of us are living in today.