By every measure inequality is increasing with the richest 1% seeing huge growth in their wealth whilst everyone else has either gone backwards or plateaued.
The 1992 Forbes Top 400 Richest had combined wealth of $300bn. By 2015 it had increased to $2.34 trillion. That’s nearly 8x growth. By comparison inflation hasn’t even doubled over that period. Something that cost $100 in 1990 would cost $186.20 by 2015 according to US inflation records.
In the 1970’s the 1% accounted for 10% of the world’s wealth. According to recent report by Credit Suisse the wealthiest 1% now have over 50%.
In 2005 the combined wealth of Bill Gates and Warren Buffet was higher than the combined wealth of the lowest 40% of Americans. There are now 123,800 people with over $50m that make up the richest 0.37%. At the opposite end, 71% of the world’s population have less than $10k each.
For the first time in history increases in productivity have been decoupled from increased wages and employment. Since the late nineties we’ve seen GDP increase, company profits at the highest they’ve ever been, and corporate investments at all time highs. Corporations are doing well and they are spending.
Worryingly they aren’t hiring.
Countries are getting richer. Corporations are more productive & profitable. But this isn’t creating jobs. Just wealth for the richest few.
With increasing automation predicted to heavily impact 47% of job categories within the next couple of decades we’re in danger of seeing a world even more dominated by the super rich. Supported by a small number of middle class, leaving most the world on the scrap heap.
This threat is also a great opportunity with the potential to liberate many from the burden of work. But doing so will require major reform of existing social and economic systems.
When plotted against key measures of a society’s health, such as literacy and life expectancy, those countries with highest inequality perform the worst demonstrating high levels of general social dysfunction. Whereas countries with the lowest inequality see the opposite results, performing the best as highlighted by Richard Wilkinsons comprehensive study.
There are over 200 studies published in academic journals on the impacts on inequality on the health and wellbeing of a society that clearly show that more inequality leads to worse performing societies.
Nations typically compare themselves based on GDP but the monetary value of goods produced within a country is hardly the best measure of a society. As Robert F Kennedy pointed out, GDP “measures everything except that which is worthwhile”
The real measure of a society’s health is to look at a myriad factors such as life expectancy, literacy, infant mortality, obesity, murder rates, and trust in the wider society & government.
Based on these measures, inequality is even bad for the rich as all socio-demographic groups performing worse than the same groups in societies with less inequality. But without question, its the lower socio demographic groups that really suffer.
The evidence for this is overwhelming and indisputable.
Equality sets everyone up for success. Inequality sets a society up for failure.
The current plutocratic political system with it’s crony capitalism almost guarantees this will continue, driving more and more people into poverty and hardship. It is designed to ensure the richest 0.1% and the corporations they control maintain control and influence over politicians.
Their lobbying and funding of the politicians ensures they shape every single decision that is made. Their invisible hand has…
- Introduced legal loopholes to help them avoid paying personal or corporation tax
- Deregulated industries, financial markets, and environmental protections to exploit the public and planet in pursuit of profits
- Sold off publicly owned assets and services under the pretext of increased efficiency through privatisation
- Removed hard earned employment and workers rights
Right now, the world’s superpowers are pushing for a new trade agreement (TTIP) that will only make the inequality gap worse. It proposes to give yet more power to the corporations and restrict growth for the major emerging economies. It will further remove workers rights and allow corporations to sue governments that introduce any legislation that hurts their profits. So if a law is passed that increases the minimum wage, discourages junk food, or protects the environment, the corporations will be able to sue the state.
Some of the latest generation of billionaires also recognise the danger of inequality. The likes of Zuckerberg and Gates have given up some of that aforementioned wealth being highly philanthropic. One billionaire called Nick Hanauer has even warned the super rich to reform or expect an uprising.
There are a number of potential ways to address this. Two of the best performing countries have very different approaches that have both led to increased equality and a healthier society. Japan has low taxes, a relatively weak welfare state, and small salary gap between the highest and lowest. Sweden conversely has a high salary gap but this is offset by high taxes and one of the strongest welfare states in the world.
The lesson from this, is that the approach followed is very much secondary. What really matters is a commitment to social mobility and equality.
However, getting that commitment will take a lot more than the overwhelming evidence of its benefits. Any attempts to deliver significant reform will almost certainly fail with the current plutocratic system which is rigged to serve the richest few. They will bring all their power and influence to block any such reforms.
The only way to tackle this and every other major issue facing the world today is by reforming the entire corrupt political system. Establishing a genuinely open and democratic system that gives power to the people.
The current system is outdated and poses the biggest single risk to humanity today.
If we are able to reform and unite to give real power to people then we have the capacity to solve almost all the challenges facing the world today.
Some comfort can be taken from parallels with the industrial revolution which also had horrific working conditions. At the time most the population were either slaves or the economic equivalent. But over the last 200 years we’ve managed to emerge stronger, healthier, richer, and happier with a much improved life expectancy.
However getting to that point took several great depressions, two world wars, countless social & political revolutions, huge technological advancements, creation of the welfare state, and the unnecessary suffering and death of millions.
Unless we want a return to the conditions of the industrial revolution, it’s time for us to stand up and demand major political reform. Sign the petition now on change.org