Staggering economic inequality medieval or worse

Bill Knight column for Thurs., Fri., or Sat., Feb. 6, 7 or 8

A recent report from the non-profit Oxfam shows that 85 of the world’s richest people own some $110 trillion, equal to what HALF of the world’s population has. That’s 85 individuals vs. about 3.6 billion people. (For those scoring at home, that’s something like 2 ten-millionths of 1%, or 2.4 PRECEDED by seven zeroes: 0.000000024%.)

Further, the wealth gap in the United States is greater than most developed countries, according to Oxfam’s “Working for the Few: Political Capture and Economic Inequality.”

Earth’s economic situation is reminiscent of medieval times, when royalty literally lorded it over everyone else in feudal systems where most people labored to survive and the elite lived off serfs’ work.

In the United States following the 2009 financial crisis, the bottom 90% has become poorer while the top 1% has captured 95% of all economic growth. That points to the correlation between increased wealth and increased power, which translates to policies favoring the rich and their corporations at the expense of all others: tax havens and structures that permit tax avoidance, financial deregulation, and “austerity” policies that benefit investors but hurt the rest of us.

Such policies undermine democracy, the report states.

“When there is growth and diminishing inequality, the rules governing markets are working for the middle classes and the poorest sections of society,” it says. “However, when only the rich are gaining, the rules start bending toward their interests exclusively. Concentration of wealth in the hands of the few leads to undue political influence, which ultimately robs citizens of natural-resource revenues, produces unfair tax policies and encourages corrupt practices, and challenges the regulatory powers of governments.”

In markets, some economic inequality helps drive growth and progress, rewarding those with talent, hard-earned skills, and the ambition to innovate and take entrepreneurial risks, the report concedes.

“However, the extreme levels of wealth concentration occurring today threaten to exclude hundreds of millions of people from realizing the benefits of their talents and hard work,” continues the study, which notes that extreme economic inequality can have negative impacts on economic growth and poverty reduction, can multiply social problems, and is morally questionable.

“We will soon live in a world where equality of opportunity is just a dream,” comments Oxfam Executive Director Winnie Byanyima. “In too many countries economic growth already amounts to little more than a ‘winner takes all’ windfall for the richest.”

Continuing such policies could contribute to inequality for generations, she warns.

“In developed and developing countries alike, we are increasingly living in a world where the lowest tax rates, the best health and education, and the opportunity to influence are being given not just to the rich but also to their children,” Byanyima says.

Such a massive concentration of economic resources in the hands of fewer and fewer people presents a huge threat to inclusive political and economic systems, it says. Instead of advancing together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown. In fact, a majority of people surveyed in Brazil, India, South Africa, Spain, the United Kingdom and the United States said they believed that laws are already skewed in favor of the rich, and a second Oxfam poll of low-wage earners in the United States showed that 65% believe that Congress passes laws that predominantly benefit the wealthy.

“Extreme economic inequality is worrying because of the pernicious impact that wealth concentrations can have on equal political representation,” it says. “When wealth captures government policymaking, the rules bend to favor the rich. The consequences include the erosion of democratic governance, the pulling apart of social cohesion, and the vanishing of equal opportunities.”

Politics and policies that represent the majority are possible, the group says; it happened in the decades following World War II, when the United States and Europe reduced inequality and grew prosperous. Latin America also has significantly reduced inequality in the last decade.

On the other hand, such extreme economic inequality is not new. As U.S. Supreme Court Justice Louis Brandeis in the 1930s was reported to have said, “We may have democracy, or we may have wealth concentrated in the hands of the few, but we cannot have both.”

The planet needs a new Magna Carta, that 1215 document forced upon England’s King John by his subjects seeking some limits on the wealthy monarch.

The problem isn’t medieval.

It’s just evil.

[PICTURED: Graphic from Oxfam.]