Hogging the Global Pie
The richest 100 people in the world are earning much more than enough to end the world's worst poverty.
Apologists for inequality have a standard retort to anyone who calls for a more equal distribution of the world’s treasure. If you took all the wealth of the wealthy and divvied it up equally among all the poor, they claim, no one would gain enough to accomplish much of anything.
Oxfam International, one of the world’s premiere anti-poverty charitable organizations, begs to differ. The world’s top 100 billionaires now hold so much wealth, says a new Oxfam report, that just the increase in their net worth last year would be “enough to make extreme poverty history four times over.”
“Oxfam’s mission is to work with others to end poverty,” notes Oxfam analyst Emma Seery. “But in a world with limited resources, this is no longer possible without an end to extreme wealth.”
Oxfam timed its new analysis, The Cost of Inequality: How Wealth and Income Extremes Hurt Us All, to appear right on the eve of this year’s World Economic Forum in Davos, Switzerland. This annual and earnest “issues” confab brings together a glittering array of global business and political leaders.
In today’s recession-ravaged world, these leaders are playing defense. They feel increasingly pressured to address the global economic inequality they’ve so long tried to sweep under the rug.
That pressure at this year’s Davos forum came from figures like Christine Lagarde, the former French finance minister who now directs the International Monetary Fund. Lagarde blasted outsized executive pay in high finance, attacked bankers for lobbying against needed new regulations, and called for more “robust social safety nets.”
Oxfam, for its part, is calling for much bolder action to narrow the stunning gap between the global uber-rich and everyone else. The group is urging world leaders to commit their nations “to reducing inequality to at least 1990 levels.”
Meeting that goal, the new Oxfam report relates, would require a wide range of measures, everything from higher income tax rates on the richest of the rich to pay caps that limit how much corporate executives can take home to a fixed multiple of the wages that go to their lowest-paid workers.
Oxfam also prescribes cracking down on offshore tax havens, a prime contributor to global inequality. As much as a quarter of the world’s wealth now sits shielded offshore.
Don’t hold your breath waiting for the Davos crowd to buy into any of this bold agenda. Even the modest reforms that the IMF’s Lagarde is urging found limited support among the corporate and banking movers and shakers who ambled up to the Alps for this year’s gathering.
One American on hand for the festivities, JPMorgan Chase chief exec Jamie Dimon, made no move to hide his distaste for reformers. Bank regulators, he charged, were “trying to do too much, too fast” — and spreading “huge misinformation” about the noble work underway at banks like his.
“We’re doing the right thing,” Dimon assured his fellow notables.
Other global corporate notables at Davos sang a similar tune. Azim Premji, the chairman of the Bangalore-based Indian high-tech giant Wipro, admitted that the new Oxfam data — on how the richest 100 people in the world are earning much more than enough to end the world’s worst poverty — do “sadden” him.
But Premji declined in an interview to term the incredible concentration of the world’s wealth in any way “unethical.” We need not waste time, he suggested, worrying about “redistribution.” We need instead to help the rich grasp their “obligation,” their “trusteeship responsibility,” to wield their wealth for good.
Trust the rich, in other words, to solve our problems.
Not on your life, says Oxfam.
“In a world where even basic resources such as land and water are increasingly scarce,” Oxfam’s Jeremy Hobbs sums up, “we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left.”