Has Wealth Inequality Gone Too Far?
By Robert Hochgraf
Eight People Own As Much As Half the World
Financial inequality is so lopsided now that eight men control the same magnitude of wealth as the poorest half of the world. The world's 10 richest corporations combined have revenue equal to the poorest 180 countries combined, says data published from a report by an international poverty-fighting group known as Oxfam [1]. Oxfam said the world's poorest 50% owned $426 billion, the same as what a group of the eight richest people in the world owns. This group, led by Bill Gates, the founder of Microsoft, includes Amancio Ortega, founder of the fashion chain Zara, Warren Buffett, renowned investor and chief executive of Berkshire Hathaway, Carlos Slim Helú, Mexican telecom tycoon, Jeff Bezos, founder of Amazon, Mark Zuckerberg, founder of Facebook, Larry Ellison, chief executive of US tech firm Oracle, and Michael Bloomberg, former mayor of New York and founder and owner of the Bloomberg corporation.
The current world population, according to worldometers [2], is 7,477,904,299, as of January 16, 2017, which means half of the current population is equivalent to about 3.8 billion people. If $426 billion dollars is split among 3.8 billion people equitably, each person would get about $113, which means half of the world's population has an average total wealth of $113. Bill Gates alone controls about 663 million times that amount. The richest are gathering wealth at such an incredible rate that the world could see its first trillionaire in just 25 years. To spend a trillion dollars, you would need to spend $1 million every day for 2738 years.
Financial inequality is so lopsided now that eight men control the same magnitude of wealth as the poorest half of the world. The world's 10 richest corporations combined have revenue equal to the poorest 180 countries combined, says data published from a report by an international poverty-fighting group known as Oxfam [1]. Oxfam said the world's poorest 50% owned $426 billion, the same as what a group of the eight richest people in the world owns. This group, led by Bill Gates, the founder of Microsoft, includes Amancio Ortega, founder of the fashion chain Zara, Warren Buffett, renowned investor and chief executive of Berkshire Hathaway, Carlos Slim Helú, Mexican telecom tycoon, Jeff Bezos, founder of Amazon, Mark Zuckerberg, founder of Facebook, Larry Ellison, chief executive of US tech firm Oracle, and Michael Bloomberg, former mayor of New York and founder and owner of the Bloomberg corporation.
The current world population, according to worldometers [2], is 7,477,904,299, as of January 16, 2017, which means half of the current population is equivalent to about 3.8 billion people. If $426 billion dollars is split among 3.8 billion people equitably, each person would get about $113, which means half of the world's population has an average total wealth of $113. Bill Gates alone controls about 663 million times that amount. The richest are gathering wealth at such an incredible rate that the world could see its first trillionaire in just 25 years. To spend a trillion dollars, you would need to spend $1 million every day for 2738 years.
Oxfam's Theory
Oxfam's idea to fully end poverty is the opposite of the trickle-down theory. Rather than believing that having rich people will create jobs and lift others out of poverty, the group says, having super-rich people causes lower demand for goods and services, limiting overall economic growth. Oxfam supports the idea that wealth inequality causes poverty, which means the group believes ending poverty therefore means ending extreme wealth.
Sam Pizzigati [3] , author and associate at the Institute for Policy Studies, notes that many people have a standard saying to anyone who calls for a more equal distribution of the world's capital. He says the retort goes like this, "If you took all the wealth of the wealthy and divvied it up equally among all the poor, the retort goes, no one would gain nearly enough to accomplish much of anything". Oxfam contradicts that statement. In a new Oxfam report, Oxfam found that just the increase in the world's top 100 billionaires in their net worth in 2012 would be enough to eliminate extreme poverty, four times over. Oxfam is urging world leaders to "commit to reducing inequality to at least 1990 levels" [4]. The new Oxfam report says that reaching that goal would require a wide range of fixes, including global progressive taxation, pay caps that limit to what extent corporate executives can take home to a multiple of what the lowest-paid workers in their firms are making, and cracking down on offshore tax safe havens. As much as a quarter of global wealth now sits shielded from taxes offshore.
Trust the Rich? Not so fast.
Azim Premji, the chairman of the Bangalore-based Indian high-tech giant Wipro, said 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”. He says to trust the rich to solve poverty.
Pizzigati says that Oxfam would reply, "Not on your life".
Oxfam's idea to fully end poverty is the opposite of the trickle-down theory. Rather than believing that having rich people will create jobs and lift others out of poverty, the group says, having super-rich people causes lower demand for goods and services, limiting overall economic growth. Oxfam supports the idea that wealth inequality causes poverty, which means the group believes ending poverty therefore means ending extreme wealth.
Sam Pizzigati [3] , author and associate at the Institute for Policy Studies, notes that many people have a standard saying to anyone who calls for a more equal distribution of the world's capital. He says the retort goes like this, "If you took all the wealth of the wealthy and divvied it up equally among all the poor, the retort goes, no one would gain nearly enough to accomplish much of anything". Oxfam contradicts that statement. In a new Oxfam report, Oxfam found that just the increase in the world's top 100 billionaires in their net worth in 2012 would be enough to eliminate extreme poverty, four times over. Oxfam is urging world leaders to "commit to reducing inequality to at least 1990 levels" [4]. The new Oxfam report says that reaching that goal would require a wide range of fixes, including global progressive taxation, pay caps that limit to what extent corporate executives can take home to a multiple of what the lowest-paid workers in their firms are making, and cracking down on offshore tax safe havens. As much as a quarter of global wealth now sits shielded from taxes offshore.
Trust the Rich? Not so fast.
Azim Premji, the chairman of the Bangalore-based Indian high-tech giant Wipro, said 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”. He says to trust the rich to solve poverty.
Pizzigati says that Oxfam would reply, "Not on your life".
“In a world where even basic resources such as land and water are increasingly scarce,” Jeremy Hobbs, the Executive Director of Oxfam International, sums up, “we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left.”
References
[1] Hardoon, Deborah. "An Economy for the 99%: It's time to build a human economy that benefits everyone, not just the privileged few". oxfam.org.uk. Oxfam. Retrieved 18 January 2017.
[2] "Current World Population." World Population Clock: 7.5 Billion People (2017) - Worldometers. N.p., n.d. Web. 18 Jan. 2017.
[3] "To End Extreme Poverty, End Extreme Wealth." Inequality.org. N.p., 27 Jan. 2013. Web. 18 Jan. 2017.
[4] "Annual Income of Richest 100 People Enough to End Global Poverty Four times over." Annual Income of Richest 100 People Enough to End Global Poverty Four times over | Oxfam International. N.p., n.d. Web. 18 Jan. 2017.
References
[1] Hardoon, Deborah. "An Economy for the 99%: It's time to build a human economy that benefits everyone, not just the privileged few". oxfam.org.uk. Oxfam. Retrieved 18 January 2017.
[2] "Current World Population." World Population Clock: 7.5 Billion People (2017) - Worldometers. N.p., n.d. Web. 18 Jan. 2017.
[3] "To End Extreme Poverty, End Extreme Wealth." Inequality.org. N.p., 27 Jan. 2013. Web. 18 Jan. 2017.
[4] "Annual Income of Richest 100 People Enough to End Global Poverty Four times over." Annual Income of Richest 100 People Enough to End Global Poverty Four times over | Oxfam International. N.p., n.d. Web. 18 Jan. 2017.