Just 1 percent of the world’s adult population owns half of global household wealth. That’s the stunning finding of the annual Global Wealth Report published by Credit Suisse investment bank.
The accumulation of wealth in the hands of a tiny minority is accelerating. Earlier this year, Oxfam had predicted that this concentration of wealth would not occur until next year. Oxfam’s Mark Goldring said: “This is the latest evidence that extreme inequality is out of control”.
To be in the top 1 percent requires wealth of at least US$759,000. Seventy percent of the global population owns less than $10,000.
Eighty-eight percent of millionaires live in just 12 countries – the US, the UK, Japan, France, Germany, China, Canada, Australia and a small smattering of other Western European countries. Just 12 percent live in the remaining 181 nations.
This staggering geographic concentration of wealth tells us plenty about the legacy of colonialism and the operation of imperialism today. Only China has managed to break into the small elite group of nations with large numbers of millionaires.
But let’s delve into things more deeply. While $759,000 might be a fortune for an Indian peasant or Chinese factory worker, it is equal to what many workers in Australia with a house and superannuation might own.
So let’s look not at the 1 percent, nor even the 0.1 percent. Let’s look at the 0.0001 percent – the filthy rich.
Credit Suisse reckons that 45,000 people have assets of more than $100 million, and 4,500 own more than $500 million. The Rich List published by Forbes magazine in March tells us that there are 1,826 billionaires in the world. This small coterie of filthy rich own $7 trillion, up from $6.4 trillion last year. And within their ranks are the elite of the elite – the richest 500 who collectively hold $4.7 trillion.
At the top of the tree you’ll find the two Koch brothers who together own $86 billion and the four Walton siblings who own $162 billion. The richest individuals are Bill Gates, with a fortune of $79 billion; Carlos Slim with $77 billion; Warren Buffet with $73 billion; and Amancio Ortega, boss of Zara, with $65 billion.
That’s just nine individuals with $542 billion.
Exploitation the basis of wealth
The rich give plenty of explanations for their wealth – usually their talent and hard work.
This is rot. They get their wealth in unrelated ways. First is inheritance (take a bow Rupert Murdoch, James Packer, Donald Trump, Gina Rinehart, etc.). In the US, the wealthiest 1 percent of families on average receives almost $3 million in inheritance. A 2012 report from United for a Fair Economy estimated that 40 percent of the Forbes 400 richest Americans inherited a “sizeable asset from a spouse or family member”. But it’s not just the money. Matt Bruenig, writing at Demos, last year noted:
“Rich parents pass along more than just money to their kids. They also pass along social and cultural capital that help their kids capture the scarce supply of highly-paid jobs. Indeed, even rich kids who do not receive a college degree are
2.5 times more likely to wind up as high-income adults than poor kids who do receive a college degree. That is not because of money transfers, but it’s unfair intergenerational advantage nonetheless.”
The second, and at the root of it all, is exploiting workers at the point of production – that is, by paying workers far less than the value of what they produce. Murdoch may have inherited wealth, but he can only hold onto and extend it by screwing media workers. Rinehart may have inherited stolen Aboriginal land, but she still needs mine workers to dig up the ore.
The Walton family, owner of Walmart, might be the best known and most egregious blood suckers. Their fortune is built on the back of retail workers who have to rely on welfare to survive. Zara’s founder, Ortega, uses cheap labour in Spain, Portugal and Asia to make the clothes which are then sold by underpaid retail staff at Zara stores around the world.
These cases are just the tip of the iceberg. Exploitation is built into the system; it is not just the result of the actions of a few greedy pigs who can never have too many yachts or private islands.
The rich get fat off exploiting the working class whether they pay them high wages or low. Even the best-paid workers in an advanced country like Australia are exploited. Consider iron ore miners of the Pilbara. Their annual pay of $150-180,000 may sound like riches, but it lags far behind what they produce for their employers. The difference goes into the hands of the bosses of BHP Billiton, Rio Tinto and Fortescue Metals. The mine workers, no matter how much overtime they perform, will never own the mine in which they work.
And that’s the nub of exploitation – the fact that a tiny minority don’t just own wealth, but wealth in a form that allows them to hire workers to produce more wealth. The bosses own the land, factories, mines, railway networks, shopping malls, office buildings and so forth. That gives them the ability to expand their wealth – not just once but year after year because of the labour they employ.
Those capitalists who fail to do so get gobbled up by those who succeed. And those who work for the bosses, even those with a house and super worth a million bucks (the median house price in Sydney is now a staggering $1 million), see their lifeblood drained away as profit to someone else.
Production for need not greed
If we take a step back, we can see how wasteful all of this is. Billions, trillions of dollars rest in the hands of a tiny minority. Some of it is wasted through luxury consumption – the expensive jewellery, the fancy cars, the fur coats.
Some of it is ploughed back into production, which might make socially useful products. But even here we have no say over where it goes. When it comes down to it, capitalists invest in steel or chemicals or coal or house building for one reason only – to make more money. They are not in the business of making useful things, only in the business of business.
So if money can’t be made through generic drugs, or clean water or low cost housing, these won’t be produced. But if money can be made on cruise missiles or toxic products, you can bet business will pour money in.
To protect the fortunes of the capitalist class, governments around the world spend huge amounts on direct and indirect business subsidies, and on a legal system that protects corporations and criminalises the poor.
If we took back the US$7 trillion just from the billionaires, we could ensure that the hungriest 860 million people in the world got enough to eat. That would cost just US$30 billion per year, according to the director of the UN’s Food and Agriculture Organisation. Economist Jeffrey Sachs estimated in 2005 that ending extreme poverty – which blights the lives of 1 billion people worldwide and kills 20,000 people a day – would cost about $175 billion every year for 20 years. That’s a lot of money, but only half the fortunes of the richest 1,826 people!
As another Invasion Day approaches, the gap between public support for Indigenous rights and the endurance of racist oppression is striking. Just take the Don Dale youth detention centre in the Northern Territory. In 2016, the ABC’s Four Corners broadcast an exposé of the brutality inflicted upon the overwhelmingly Aboriginal youth locked up there. The public outrage that followed the program pressured the federal government into establishing a royal commission into youth detention in the NT, which concluded in 2017.
In January 1788, the eleven ships of the First Fleet made landing at what was later named Sydney Cove in New South Wales. The ships carried 1,373 people from Britain, around half of whom were convicts, to form the basis for the first colony in Australia.
“The Black Power movement shook the world; it certainly shook the roots of this country.”
Prisoners inside Western Australia’s only youth detention centre, Banksia Hill, heralded the new year with an act of resistance—burning a building to the ground and climbing to the top of the prison’s perimeter fence. A look into the daily conditions faced by these young people, many of them Indigenous, shows why they would want to fight back against this horrendous institution.
For 350 years, Dutch colonialism oversaw a system of brutal exploitation and repression in Indonesia. But in 1945, a mass movement defeated the colonial regime, despite the imprisonment, torture and execution of thousands of independence activists.
After fourteen years, the Melbourne public transport ticket system, Myki, is being replaced. Most of us won’t miss it. Myki’s successor is unlikely to offer any real improvement to the severe inadequacies of public transport in Victoria. But looking back at the confusing and costly Myki system in its dying days is yet another reminder of just how illogical and wasteful capitalism is.