Growing Gap in Wealth, Power Worries World Leaders
Brandon Sun “Small World” Column, Monday, January 26 / 15
At this time of year, annually, world political, financial and business leaders meet at the resort town of Davos, Switzerland to discuss the state of the planet. It has come at an interesting time as U.S. President Barack Obama, in his State of the Union Address last week, indicated that he would like Congress to pass legislation that would increase taxes on the top 1% of America’s richest people in order to support improved benefits for working families.
While the Republican-dominated House of Representatives and Senate aren’t likely to go along with Obama’s wishes, it is instructive that the President is not a lone voice on the growing gap between the very rich and everyone else. From the reformist Pope Francis in the Vatican to the Managing Director of the private enterprise oriented International Monetary Fund (IMF), world leaders are expressing concern that growing inequality will damage governance in our political systems and society, the world economy and the environment in which we live.
In other words, leaders are saying that the gap between rich and poor makes our peace and good government unsustainable. A recent research initiative by Oxfam International, published earlier this month, reported that half of global wealth is held by just 1% of the population, up from 44% in 2009 and 48% in 2014. The least well-off 80% of the world’s population own just 5.5% of global wealth. Oxfam has been invited to co-chair the Davos economic summit and bring its message to the world’s most powerful people.
Oxfam research shows that the 85 richest people on Earth have the same wealth as the poorest 3.5 billion people! In Great Britain today, as another example of concentration of riches, the wealthiest 100 families have as much wealth as 30% of the rest of UK households. Oxfam maintains that great financial power in today’s world tends to be inherited and then used as a lobbying tool by the rich to further their own interests, says The Guardian, a British on-line newspaper.
More than one-third of the 1,645 billionaires listed by Forbes have inherited their riches, while 20% have interests in the financial and insurance sectors. These groups spent $550 million lobbying US and European lawmakers in 2013 and provided $571 million in political campaign contributions.
This effort to concentrate wealth has been, to some extent, stepped up by the rich due to their insecurity (if you can imagine that) coming out of the Great Recession that the world has just experienced. An interesting comparison of how two world powers have dealt with this recession is contained in the recent book The Body Economic by David Stuckler and Sanjay Basu, on how austerity programs instituted by the IMF and various governments have adversely affected the health of their citizens while not providing any stimulus or growth in affected economies.
In other words, the rich are getting richer and, when their financial activities (speculation, for example) change boom to bust, it is the poor who pay the price and cover their losses.
The authors, who are doctors and epidemiologists (researchers of the causes and effects of disease) looked at how U.S. President Obama developed social programs to support working people affected by job and housing loss due to the recession as compared to British Prime Minister David Cameron who cut health and social programs as a measure of financial austerity. Instances of hospital visits, suicide and family violence rose in Britain while the economy stagnated, while in America, the country is coming out of the recession before Britain and generally hasn’t had the same health, education and homelessness challenges except where individual states have instituted cuts.
Countries such as Greece, Spain and Portugal also brought in austerity measures as demanded by the IMF in exchange for bail-outs, while Sweden, Finland and Iceland brought in stimulus packages and supported social programs, thus avoiding the worst of both economic meltdown and human tragedy. These more Nordic countries saw the super-rich as speculators who brought about the real estate bubbles that precipitated the recession and they weren’t prepared to fix the problem on the backs of the more financially vulnerable.
Global social movements have spoken out and taken action against globalization and concentration of wealth in recent years. A hopeful sign is that some world leaders are following suit today. However, the proof is always in the pudding! Coming elections in countries like the U.S., Canada and Britain in the near future may shed more light on these issues and lead to some change in the way things are.
Zack Gross is a former Executive Director of the Marquis Project in Brandon.
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