One per cent of the world’s population will own as much wealth as the other 99 per cent by next year, according to a new report by Oxfam. The study also found that the rich have got considerably richer since 2010, as the number of billionaires holding 50 per cent of the world’s wealth has fallen from 388 to just 80 in the last four years.
Published just in time for the annual Davos meeting of the World Economic Forum, the research says that the world’s richest people have made their money from a variety of asset classes but the financial and insurance and the pharmaceuticals and healthcare sectors were particularly lucrative, providing investors with returns of 15 per cent (or $150 billion in total) and 47 per cent ($250 billion) respectively.
The report also underlines the ability of the extremely wealthy to protect themselves from variations in the economic climate – chiefly by lobbying government. Individual interests are often aligned with financial corporations’, which in 2013 spent $400 million on lobbying in the US alone.
According to the study, the bailouts given out by government to banks following the financial crisis are also indicative of wealth’s advantage: ‘While the financial sector has recovered well as a result of this bailout, median income levels in the US are yet to return to their pre-crisis levels. The ongoing cost to the tax payer for “systematically important financial institutions” – in other words those that are too big to fail – has been estimated by the IMF to be $83 billion every year.’
In the UK, despite a return to economic growth, real wages still remain low, having started to grow again in 2014 after six years.
However it is easy to over simplify wealth and the contrast it creates. Those inside the one per cent are responsible for crucial employment and investment in the world economy. They are also philanthropists, able to address issues and causes directly in way governments often cannot.
It is not a crime to be wealthy and before this report provokes reactionary rich-bashing rhetoric we should remember the complex nature of and responsibility inherent in wealth and how it can benefit society.
Still, however you look at it one per cent owning the same as 99 per cent is an unacceptable level of inequality. More than ever, those at the top have a mandate to address that.