In 2024 Oxfam released the latest of astonishing statistics regarding wealth inequality. The world’s five richest men have more than doubled their fortunes to $869bn (£681.5bn) since 2020, whilst the world’s poorest 60% – making almost 5 billion people – had lost money. It most safely could be said that the economic fate of one billionaire and that of a billion working class people were shown to be polar opposites. And yet this all was predictable - consulting company Wealth X predicted in 2016 that ultra-high-net-worth individuals' wealth (that is the wealth of people starting with a net worth of at least $30 million) was ´projected to rise to $35.7 trillion, which implies an additional $8.7 trillion of newly created wealth over the next five years. If this prediction comes true, the planet’s UHNWs will have added the equivalent of the GDPs of Japan and Germany to their stock of wealth, in half a decade.’ The prediction came true and then corona-virus made that rise seem mild.
In 2022 the world inequality report showed the stark nature of kleptocratic capitalism with the following graph (as you can see the top 0.001% owned over twice as much household wealth to start with in comparison with the bottom 50%, but their share doubled while the bottom 50% stayed the same). The report stated 2020 marked the largest increase in the share of global billionaires wealth available on record, due to the beggining of the corona-virus epidemic and governmental measures.
Overall it is considered that the bottom half of the global population hold approximately a fiftieth of all wealth, while the top 10% hold over three-quarters and it is apparent this is getting worse, faster than ever. Meritocracy is non-existent, and the governments have failed over the last quarter of century to improve the situation at all.
This fact is set in stone, emphasised by how governments worldwide, like the UK government, have invested nearly hundreds times more time and resources catching petty benefit cheats than billionaire tax evaders. Conservatively speaking, benefit fraud costs the UK government 3% of what tax fraud costs (figures from 2013/14) and yet between 2009 and 2019, it was reported 23 times more benefit fraudsters were prosecuted than tax fraudsters in the UK. In fact, since then it's got considerably worse. In 2022-23 shamefully HMRC investigations led to prosecutions against just 11 “wealthy” people. These are not even billionaires - the HMRC classes a person as wealthy if they make £200,000 or more a year or have £2m or more in assets, and therefore there are 800,000 taxpayers classed as such.
Billionaires are particularly a more modern plague. Bear in mind billionaires owned just 0.4 percent of global private wealth in 1987, but now own roughly 4%. Altrata, released the Billionaire Census 2022 which revealed in 2021 'the global billionaire population rose by 3.3% to 3,311 individuals... with total wealth surging by 17.8% to a record $11.8 trillion. Billionaires account for an outsized proportion of global wealth. The 3,311 billionaires around the globe represent just 0.9% of the global ultra high net worth (UNHW) population – those with $30m+ in net worth – yet hold a vast 27.4% share of total UHNW wealth.' As shown, in contrast to cutting down on billionaires, governments have organised a system which have allowed their rank to grow. According to Forbes, the planet was home to just over 140 billionaires in 1987 but by 2013 there were more than 1,400 today, an increase by a factor of 10. Let it be clear this is a problem even for millionaires who will effectively be made into economic slaves for their billionaire counterparts, and for the working class, well freedom has frankly become a complete illusion over the last 25 years.
It has been found that 'the households in the very middle of America’s income scale—meaning the middle 20 percent—saw their median net worth rise by only 4 percent between 1989 and 2016. During the same period, the net worth of people in the top 20 percent more than doubled. The wealth of the top 1 percent nearly tripled.' Towards the end of this period there was the catastrophic 2008 financial crisis, created by the decadent financial system. In the 30 years before the crisis, between 1977 to 2007, it has been found 'that the richest 10 percent appropriated three-quarters of the growth. The richest 1 percent alone absorbed nearly 60 percent of the total increase of US national income in this period. Hence for the bottom 90 percent, the rate of income growth was less than 0.5 percent per year.' Since the crisis it is only worse.
Davos condescendingly and publicly prepares the public for what is happening, teaching that that they will be happy with nothing, meanwhile defending billionaires' interests. Kleptocracy occurs when governments are led by those who seek chiefly status and personal gain at the expense of the governed. If the government is actively persecuting the poorer majority with much greater vigor for breaking the law (far less seriously) than the wealthier minority, it is clear the leaders are kleptocratic and are working on maintaining a slave state. The trickle-down economics was made highly fashionable on the political right in the 1980s, when both Ronald Reagan in the US and Margaret Thatcher in the UK championed the idea that by increasing the wealth of the rich, they will spend more money, which would trickle down throughout society, leading to more wealth for all. It comes to no surprise, that this was wrong and that since 1980 the share of the upper centile in national income has risen significantly in the United States, Great Britain, Canada, and Australia, more so than any other countries. The plague is everywhere but statistics show that problem is most gravely Anglo-Saxon.
Thomas Piketty shows this clearly in his book 'Capital in the 21st century', describing how in the 'United States, income inequality in 2000–2010 regained the record levels observed in 1910–1920 (although the composition of income was now different, with a larger role played by high incomes from labor and a smaller role by high incomes from capital). In Britain and Canada, things moved in the same direction. In continental Europe and Japan, income inequality today remains far lower than it was at the beginning of the twentieth century and in fact has not changed much since 1945, if we take a long run view.'
Piketty highlighted how this problem particularly has worsened in the last half-century - 'In the 1970s, the upper centile’s share of national income was quite similar across countries. It ranged from 6 to 8 percent in the four English-speaking countries considered, and the United States did not stand out as exceptional: indeed, Canada was slightly higher, at 9 percent, whereas Australia came in last, with just 5 percent of national income going to the top centile in the late 1970s and early 1980s. Thirty years later, in the early 2010s, the situation is totally different. The upper centile’s share is nearly 20 percent in the United States, compared with 14–15 percent in Britain and Canada and barely 9–10 percent in Australia.' Due to the fact this type of problem is compounding, the difficult question to ask is when will it be too unsustainable and what will eventually be the crisis which leads it to be fixed. The trickle down theory is totally delusional, and would be more aptly called a trickle up, where even millionaires end up losing their wealth to billionaires just by living.
Truthfully, our modern western society conjures images akin to Gotham. As Raj Rajatnaram (a renowned Hedge-Fund Manager) stated - ‘A society that is indulgent towards corruption and the successfully corrupt is not, as is often argued, a liberal sophisticated society inspired with a shrewd understanding of human nature… On the contrary, it is what one sociologist has aptly termed a “kleptocracy” – a society of the corrupt, for the corrupt, by the corrupt...
He explained 'the essence of kleptocracy is that the functioning of the organs of authority is determined by the mechanisms of supply and demand rather than the laws and regulations; and a kleptocratic state constitutes a curiously generalised model of laissez-faire economics even if its economy is nominally socialist.’
The price of losing the battle for economic freedom (according to Keynes and Friedman - the two world's most influential economists since Adam Smith)
What is the price of freedom according to economists and why would an economists opinion matter? Well, to answer the latter, in the words of John Maynard Keynes - 'practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist'. More to the point, the monetarist Milton Friedman wrote - ‘our minds tell us, and history confirms, that the great threat to freedom is the concentration of power...'
Friedman particularly highlighted how economically we are all dependent on each other stating - 'the challenge to the believer in liberty is to reconcile this widespread interdependence with individual freedom’. He further believed financial freedom was further intertwined with political freedom stating ‘economic freedom is also an indispensable means toward the achievement of political freedom’.
Sadly, a renowned advocate for free-markets, Friedman also wrote ‘if economic power is kept in separate hands from political power, it can serve as a check and a counter to political power’ and that ‘the tyranny of the status quo is enforced… when the firms that would specialize in speculation and arbitrage in a free market for exchange do not exist.’ Whilst it is clear economic power should be kept in separate hands form political power, the issue in our society today appears to be that economic power is so concentrated amongst so few, resulting in these individuals finding it far too easy to capture political power and for almost all countries, barring perhaps Scandinavian countries, to be entirely kleptocratic.
Friedman got it wrong. Instead of protecting economic power from the hands of political power, speculation and arbitrage in the free market for exchange has contributed to that captured state of politics and corrupted society. Friedman was inspired by Hayek, who whilst stating that too much government interference and planning comes at the cost of the individual, also wrote - 'To create conditions in which competition will be as effective as possible, to prevent fraud and deception, to break up monopolies – these tasks provide a wide and unquestioned field for state activity.' Billionaires are most genuinely the product of monopolies, fraud and deception and therefore, a failing state activity. Whilst more billionaires than ever are becoming billionaires through inheritance, of the self-made billionaires - they are largely coming from the technology sector of the economy which employs the least people for its size and where monopolies such as Facebook, Google and Amazon thrive.
Keynes wrote when in negotiations with America before the Bretton Woods Agreement that - ‘the decadent international but individualistic capitalist is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods. In short, we dislike it, and we are beginning to despise it.’ These are strong words for an intellectual, and most certainly imply that Keynes would be busy raging were he to live in the world today, where individualistic capitalism has dominated community-oriented capitalism. He wrote those words in 1933!
The bigger question really is, in these decadent and individualistic times, full of billionaires, is are the masses really living more fulfilling lives; are they at least reaping the rewards of technological advancements instigated by billionaires and their puppet governments? Political parties have tricked generations into believing we are perfecting the life, by being forced to work more hours to attain material goods, but in truth while survival may be easier, we are probably now working more than ever and with less and less pride and care, just so we can enjoy that bit more financially freedom and satisfy our materialistic wants.
As Milton Friedman stated – ‘One man may prefer a routine job with much time off for basking in the sun to a more exacting job paying a higher salary; another man may prefer the opposite. If both were paid equally in money, their incomes in a more fundamental sense would be unequal. Similarly, equal treatment requires that an individual be paid more for a dirty, unattractive job than for a pleasant rewarding one. Much observed inequality is of this kind.’
Today, the more you have, the less you have to work, and the more you can earn, regardless of how much dirty work a person starting with little is willing to do. There is no such thing as meritocracy anymore. If there is no meritocracy in relation to income, the system that takes its place can be justly called a 'rat race'. The rat race is called the rat race precisely because it degrades humans to the status of rats, where's there's no intelligent judgement and very little dignity involved, just lots of desperation and hunger.
This desperation results in more and more people wanting to have more by any means possible - cheating or over-working for instance, only to find, by the time they make it (if they even do), that those who already had, now have even more and the gap to catch up with them is already larger. It's no doubt a trap. What's worse is the indiference of the majority of people. Across the world, the public are constantly being manipulated to not care at all. Tellingly, in the UK, Lewis Hamilton was publicly voted BBC Sports Personality of the Year in 2014 even though Hamilton is a stereotypical multi-millionaire tax exile (since 2007) and had been living in Monaco, not England from 2012. The fact he won a British personality award is tragic, given it shows tax avoidance by millionaires is totally ignored. The real question that should be asked is what is the point of such multi-millionaires avoiding tax? Well, it isn't happiness according to science, at least not once a certain income is reached (estimates of that peak happiness income lie between - $75,000 and $500,00 exist - a huge difference to the $55 million Hamilton earned). It does seem to be something more sinister driving such personalities to not share any of their success with the every-day man. Its probably time the public took better care of their needs, such as the need for a fairer world, meaning more protests and more humanity, and less top-down obedience and sycophantic pandering.
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