Oxfam’s most recent report on global wealth inequality paints a grim picture of the changes that have taken place in the world economy over the course of the pandemic.
According to research from the charity, the world’s ten richest men doubled their wealth over the course of the past year, meaning they earned the equivalent of $1.3 billion per day.
To put this figure in context, consider these illustrations of the difference between a million and a billion. If you were to count the numbers to a million it would take you 12 days; but if you were to count the numbers to a billion it would take you 32 years. If you were to spend a million dollars in a year, you’d have to spend roughly $2,700 per day; to spend a billion dollars in a year, you’d have to spend roughly $2.7 million per day.
These ten men are now so rich that, even if they lost 99.999 percent of their wealth, they’d still have more than 99% of people on the planet.
These numbers are so large that they’re difficult to comprehend, even with illustrations. But it is extremely important that we do try to wrap our heads around the scale of inequality in the world economy right now. Because wealth inequality doesn’t simply tell us about the divergent living standards and life chances of people in different tax brackets; it tells us about differences in power between the wealthy and everyone else.
Billionaire wealth isn’t just sitting in bank accounts accruing interest; it exists in the form of assets, like shares, property and bonds. Many on the right gleefully make this point when criticising Oxfam’s method for calculating wealth inequality, arguing that we shouldn’t think of Jeff Bezos’ wealth as equivalent to the value of his assets, because if he were to sell his assets all at once then their value would fall sharply.
But this criticism misses the point. The problem with the inequality between billionaires and everyone else isn’t just that they can afford to buy more stuff than everyone else; it’s that they control the resources that the rest of us rely on to survive.
Take Jeff Bezos, whose wealth exists mostly in the form of Amazon shares. When measuring the scale of Bezos’ wealth, we’re not just looking at how rich he is, we’re also looking at how powerful he is. The fact that Bezos personally controls around 10% of one of the largest and most valuable companies in the world means he has a significant amount of control over the way the economy works.
He can influence what wages Amazon sets, which determines the incomes of the millions of people all over the world. He can shape the investment decisions the company makes, which not only determine how many jobs will be created in the economy, but also the kinds of goods, services and technologies that are likely to be developed in the coming years. He can input into a whole range of decisions that have a massive impact on the rest of society – from the company’s environmental footprint to its total tax liability.
The same can be said for other billionaires who control most of the world’s resources. Property tycoons set our rents and influence land and property prices all over the world. Financiers determine where investment is allocated, which shapes all sorts of social trends like technological change, the carbon intensity of production and the geography of production. And media tycoons help to shape the very information we receive to understand these trends.
The decisions made by this small handful of men have a huge impact on almost every area of our lives – from our wages, to our rents, to the temperature of our planet. And yet they exercise this extraordinary amount of power with little to no accountability.
No one in their right mind would argue that this is a rational way to organise an economy. Most mainstream economists argue that people like Jeff Bezos don’t really have as much power as we think he does. Amazon’s decisions are, they argue, determined entirely by wider trends within the market. Bezos doesn’t make decisions; the market does.
Yet in a world characterised by extreme levels of inequality, high rates of market concentration, and corporate capture of the state, this view becomes much harder to defend. When 10 men could lose almost everything they have and still be wealthier than almost everyone else on the planet, it is absurd to argue that they’re not in control because the market is.
These men are the market – literally in the case of Jeff Bezos.
If Bezos decides he wants to perfect commercial spaceflight, then that’s how humanity’s scarce resources will be used for the foreseeable future; just as if Amazon decides to cut its wage bill, incomes for the worst-off will fall while profits for the best-off will rise.
Inequality doesn’t just matter because it is unfair; inequality matters because the wealth of those at the top is contingent upon the poverty of those at the bottom.
Oxfam emphasises precisely this point in this year’s report, arguing that ‘extreme inequality is a form of economic violence, where policies and political decisions that perpetuate the wealth and power of a privileged few result in direct harm to the vast majority of ordinary people across the world and the planet itself.’
Nowhere has this been clearer than in our governments’ and central banks’ responses to the pandemic, which have pumped billions of dollars into the pockets of the wealthy while leaving many of the worst off to fend for themselves.
So the next time someone tells you that the Jeff Bezos earned his money and that he should be able to spend it the way he wants, remind them that he didn’t earn it, he extracted it from the government, the environment, and his workers.