Economy

Shocking Stats Show How Much Gross Inequality Dominates the Globe

Economic inequality is getting worse, not better, everywhere.

Photo Credit: Image by Shutterstock

The international anti-poverty coalition Oxfam has issued a remarkable report that forcefully documents how the worst of the West’s capitalist ravages have gone global and show no sign of letting up, even as addressing inequality has been cited as a new political priority in speeches as diverse as President Obama's State of The Union and the recent capitalist forum in Davos, Switzerland.

The most-quoted soundbite from the Oxfam report, “Working For The Few: Political Capture and Economic Inequality,” is how the richest 85 people in the world own as much as the bottom half of the entire global popuation, which is 7.2 billion people. “Seven out of ten people live in counties where economic inequality has increased in the last 30 years.”

Turning to the United States, Oxfam said, “In the U.S., the wealthiest one percent captured 95 percent of the post-financial crisis growth since 2009, while the bottom 90 percent became poorer.”

Inequality indicators like these are hardly new. The gap beween haves and have-nots has been growing for years. But what’s new in Oxfam’s report are country-based profiles that show the worst of capitalist excess—exploitive businesses, insider deals offered by top government officials to those who bankroll their elections, and shrinking chances for poorer people with talent to advance—isn’t just an American condition.

“Economic growth looks more like a winner-takes-all system,” it noted, citing examples on every continent where behind the latest economic news is a larger reality: not just that the fortunes of the few have skyrocketed—but that these wealthy few have could offset the misery of many if they chose to share slices of their out-sized riches.

“To give an indication of the scale of wealth concentration, the combined wealth of Europe’s 10 richest people exceeds the total cost of stimulus measures implemented across the European Union (EU) between 2008 and 2010 (217 billion Euros compared with 200 billion Euros,” Oxfam said. “Furthermore, post-recovery austerity policies are hitting poor people very hard, while making the rich even richer. Austerity is also having an unprecedented impact on the middle classes.”

The notion that world’s wealthiest families could act to offset vast inequity is a theme that runs throughout Oxfam’s report. In 2013, the number of new billionaires globally grew by one-sixth to “1,426 individuals with a combined net worth of $5.4 trillion.”

Oxfam noted that the world’s economic system is not natural but man-made. “Markets are not autonomous, spontaneous phenomena operating according to their own natural laws. In reality, they are social constructions whose rules are set by institutions and regulated by governments that should be accountable to the participants and citizens.”

The key word in that last sentence is “should,” because, as the report goes on to note, economic inequality is a predictable outcome when elections and economic rules are “rigged” in favor of insiders. “Oxfam has spent 70 years working to fight poverty and injustice in more than 90 countries,” it said. “Though these experiences, Oxfam has witnessed firsthand how the wealthiest individuals and groups capture political institutions for their aggrandizement at the expense of the rest of society.”    

When the report turns to the most booming economies outside the West, its profiles of profiligate profit read like modern-day versions of the American and European industrial revolution. Speaking of India’s real estate, construction, mining and telecommunications, it says that political corruption, tax-avoidance and unaccountability is rife. “It is common knowledge that property development is India’s most opaque business, where enormous sums of illegal money exchange hands and little tax is collected.”

Turning to Pakistan’s Parliament, it says it “is comprised of the nation’s wealthiest elites, who create economic rules specifically aimed toward advancing their narrow interests, while doing little to build the capacity of the state or enhance the economic power of the millions of citizens it is supposed to represent… Pakistan’s revenue from taxation [is] among the lowest in the world, even beating Sierra Leone in having the lowest ratio of tax to GDP in the world.”

Turning to Africa, it points to vast mineral wealth that is stolen by private interests as the country lives in dire poverty—echoing the American West’s 19th century mining barons. “In 2011, Zambia’s copper exports genertated $10 million, while government revenues from copper were only $240 million,” it said, noting that this is “a country where 69 percent of the people live on less than $1.25 a day.”

Where all of this is heading is toward an ever more segregated world. The wealthy live in enclaves and have the biggest homes, best health care, top schools, access to banking and tax shelters, and so on, and everybody else seems to be living in a domestic version of the Hunger Games. “Today’s unprecedented levels of econimic inequality tell us that left unchecked, representative institutions will decay further, and the power disparity between the haves and have-nots may become entrenched and immutable.”

Oxfam notes that there have been times in recent history—the three decades after World War Two in the U.S.; the past decade in much of Latin America—where the government and private sector saw each other’s prosperity and effectiveness as interdependent.

“Owing to the economic power of middle class consumers, big business realized the utility of paying good wages, with cost of living increases (as well as health insurance and pensions, which had primarily been management perks until the 1950s),” Oxfam said of post-war America. “The government’s role was to maintain the balance between labor and big business… The era of ‘Great Prosperity’ …came to an end as big business increasingly concentrated its economic power to lobby policy makers in Washington DC throughout the 1970s and 1980s, eventually edging out labor, and fighting otherwise popular policies impacting working families, like increasing the minimum wage.”

President Obama’s 2014 State of The Union poses the same question as the recent retreat in Davos for the world’s most powerful and wealthy: What it will take to turn strong words from a podium into realities for the multitudes. As Oxfam’s report amply notes, the problems and solutions facing the United States are not exactly a mystery.

“Had the share of income going to the richest one percent stayed the same as in 1980, the rest of America would have an additional $6,000 dollars at their disposal in 2012,” it noted—a figure that would boost the average U.S. income by almost 12 percent.

The solutions, Oxfam concluded, lay in the rich not dodging taxes, not using their wealth to seek political favors, making public investments, supporting progressive taxation and other national social safety nets, and removing barriers facing women and challenging “other economic elites to join them.” 

Steven Rosenfeld covers national political issues for AlterNet, including America's retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).