Survival Of The Richest

This’ll sound callous: There’s no utility left in lamenting the worsening trends in global inequality.

The situation is by now so absurd, and the political will to correct it so lacking, that mourning the injustice of it all is a waste of time.

New readers should note: I’ve wasted quite a bit of time in that regard. I’m the furthest thing from aloof. I wish it were possible to make a difference. But it’s not.

Most relevant trends get worse every year. In a testament to how intractable those trends are, even the publication of what, arguably, was the first truly meaningful work of political economy since the days of great thinkers (Piketty’s “Capital”) made no difference whatsoever despite being overtly prescriptive in nature, and despite identifying precisely where the problems reside.

It’s easy to lay the blame at the feet of the rich for resisting attempts to ameliorate the situation with, for example, a tax regime designed specifically to halt the most deleterious trends. But, as I’ve emphasized in these pages on innumerable occasions, the rich and their shrill protestations are only a small part of the problem.

The crux of the issue are the dynamics which have allowed the largest fortunes on Earth to multiply exponentially such that someone with $100 million is a relative pauper in the 2020s. Those dynamics, I’ve argued, will eventually mean that virtually all of the world’s wealth, capital and resources are owned by a literal handful of people, who will become autonomous actors, beholden to no one and no government.

It’s with all of that in mind that I wanted to highlight a few, well, a few highlights, from a new Oxfam report released on Monday. It’s called “Survival Of The Richest.”

Most of us are totally desensitized to these sorts of reports and to the statistics they contain. Some of that apathy is attributable to the idea that as long as we’re doing “ok” (whatever that means for you), it doesn’t so much matter how the ultra-wealthy are doing. “If I have a BMW X5, who cares if Mohammed Bin Salman has a gold plated-Phantom? There’s no path for me to a Rolls Royce-style life, and besides, I like my X5!”

There’s nothing “wrong” with that mentality, particularly given that, as is the case with climate change, most living humans won’t be around to witness the terrifying long-term consequences of today’s apathy. But make no mistake: Over the longer run, these trends are ruinous and will lead to dystopian outcomes.

More so perhaps than the “I’m doing fine myself” explanation for the general public’s lack of interest, apathy towards spiraling wealth inequality is attributable to the fact that no one (even the ultra-wealthy) is capable of processing the actual numbers. They’re too large, the disparities too wide, the extremes too extraordinary for humans to meaningfully contemplate.

Elon Musk is no more capable of understanding $300 billion than you or I. 300 billion simply isn’t a number that’s comprehensible in the context of dollars. If we (humans) were capable of processing these statistics, Bernie Sanders would be president not just of the United States, but of the entire world. Sanders is the subject of intense derision among many Americans, but his overarching message about the concentration of wealth isn’t up for debate of any sort.

The figure below from the Oxfam report underscores how this already perilous path has morphed, in the 2020s, into a road to total ruin.

The trend in the 2020s is virtually no one’s friend. It’s getting more acute and more narrow all the time. “Over the last 10 years, the richest 1% of humanity has captured more than half of all new global wealth [but] since 2020, this wealth grab by the super-rich has accelerated, and the richest 1% have captured almost two-thirds of all new wealth.”

As I’ve explained over and over again, the dynamics behind that statistic (and others like it) are likely to optimize further around themselves absent intervention such that by, say, the year 2150, the same chart will be one large bar on the far right-hand side representing a dozen or so people, looking down on nearly imperceptible rectangles representing everyone else on the planet.

Oxfam recommended taxing the rich, which the report not-so-gently noted is “a wildly popular idea, even with rich people.” (Emphasis mine.)

The report is publicly available, and at “just” 57 pages, it’s actually quite short as far as these sorts of things go. Given its accessibility, I won’t laboriously paraphrase it. Instead, I’ll just point readers to the original (here) and close with a few statistics which, as noted above, are impossible for humans to process, and thereby will surely be greeted with the same bemused apathy that greets such figures each and every time they’re presented:

• Since 2020, for every dollar of new global wealth gained by someone in the bottom 90%, one of the world’s billionaires has gained $1.7 million.
• Since 2020, the richest 1% have captured almost two-thirds of all new wealth — nearly twice as much money as the bottom 99% of the world’s population.
• Billionaire fortunes are increasing by $2.7 billion a day, even as inflation outpaces the wages of at least 1.7 billion workers, more than the population of India.
• Only 4 cents in every dollar of tax revenue comes from wealth taxes, and half the world’s billionaires live in countries with no inheritance tax on money they give to their children.
• A tax of up to 5% on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty, and fund a global plan to end hunger.
• The richest 1% hold 45.6% of global wealth, while the poorest half of the world have just 0.75%.
• 81 billionaires hold more wealth than 50% of the world combined.
• 10 billionaires own more than 200 million African women combined.

Oh, and I should include one additional quote from the report: “Inequality is not inevitable. Inequality is a policy choice.”