Once again Oxfam’s annual report on wealth Reward work, not Wealth confirms that the benefits of economic growth are concentrated in ever fewer hands.
Forty-two people now own the same wealth as the bottom 3.7 billion people, compared with 61 people last year. The richest 1% own more wealth than the whole of the rest of humanity. There are now 2,043 dollar billionaires worldwide who saw their wealth increase by $762bn in 12 months.
As Oxfam noted, this huge increase could have ended global extreme poverty seven times over.
Ordinary workers
Yet while billionaire wealth rose by nearly 13% a year between 2006 and 2015, ordinary workers saw their incomes rise by just 2% a year.
Such inequality is incompatible with democracy. In country after country Oxfam found that the space for citizens to speak out is being closed down, and freedom of speech suppressed.
The report also refutes the notion - endlessly promoted by business, governments and mainstream economic textbooks - that wealth provides incentives for innovation and investment and rewards talent, hard work and innovation that supposedly benefits us all.
It estimated that around two-thirds of billionaire wealth is the product of inheritance, monopoly and cronyism. For instance the 500 richest people in the world are expected to hand down $2.4tn to their heirs over the next two decades, an amount larger than the GDP of India.
Squeeze
Meanwhile the ever-increasing payout of dividends to wealthy shareholders is driving a relentless squeeze on workers, driving down wages and conditions, and forcing countries into a race to the bottom on wages, labour rights and tax breaks.
According to the International Labour Organisation, 40 million people were enslaved in 2016, 25 million of them in forced labour. Four million of those in slave labour are children, with more than 150 million children aged 5 to 17 undertaking some form of child labour, nearly one in 10.
According to the annual ITUC Global Rights Index, there has been a rise of 10% in the number of countries experiencing physical violence and threats against workers, with attacks on union members recorded in 59 countries. More than three-quarters of countries deny some, or all workers, of the right to strike.
Capitalist system
While the Oxfam report says little about the capitalist profit system per se, it provides a damning indictment of the capitalist system, highlighting two central processes outlined by Karl Marx, the founder of scientific socialism who was born 200 years ago.
In Capital, Marx explains that the logic of the capitalist system, based on the drive for profit, is to produce ever greater wealth at one pole and poverty, misery and degradation at the other. In the Communist Manifesto, he explains that all governments function as the executive committee for the capitalist class.
This is evidenced today by the tax policies and other ‘business-friendly’ measures carried out by governments around the world. Not to mention the crucial role played by governments and central banks in handing over trillions of dollars to bailout and underwrite the profits of the banks, major corporations and financial elites through quantitative easing after the 2008 global financial crisis.
The ever-increasing concentration of so much wealth into so few hands is to the detriment of the billions who toil every day just to meet their basic needs. The perspective of re-organising society on a socialist basis so that we produce for human need and not for profit must guide the immense social struggles that will erupt out of the dreadful social conditions detailed in the Oxfam report.
Jean Shaoul is Emeritus Professor at Alliance MBS
