‘Survival of the Richest’: Where is the World Going?

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‘The fact is, we live on an abundant planet with more than enough to go around, even with 8 billion people here. And if we adopted a commons-based model of, how do we share the abundance rather than how do we market the scarcity, we end up with a very different reality. And it’s not rocket science. The only people it doesn’t favour are the super-wealthy, selfish people who want a disproportionate share and need to keep us competing with each other in order to maintain their monopoly on power over us’.

– Douglas Rushkoff

A plethora of inequalities afflicts mother earth. These inequalities manifest in numerous ways such as income distribution, lack of access to education and healthcare and lack of social justice. Therefore, despite living in a society with numerous resources and possibilities, a large percentage of the population is unable to access them owing to economic, social and political issues. Moreover, education and healthcare quality vary substantially depending on where one lives. This eventually results in inequities in accessing opportunities.

However, the political representation and decision-making authority are often concentrated in the hands of a small number of people, increasing uneven resource distribution. The legal system is also often prejudiced and fails to properly serve underprivileged populations. These inequities intersect and reinforce one another, supporting an unbalanced power structure that is difficult to modify. As a result, the world started to become a place for all but a home for a few.

A perpetual paradox 

The apocalypse has already arrived, wiping out all human accomplishments and leaving a suffering civilisation for future generations to inherit. The deadly pandemics were insufficient to instil sanity in mankind. So they resumed the war game. Thus, we are entering a paradoxical era in which we have the power to relinquish the future but also have the cure.

Nevertheless, society has lost control of almost everything. The additional gap between rich and poor has enriched them so much that the word “inequality” has become very nominal to describe this unprecedented disproportion.  And now, at the beginning of the 21st century, survival of the richest has replaced survival of the fittest as the benchmark for accomplishment.

The World Bank declared in 2022 that we would fail to fulfil the objective of eradicating extreme poverty by 2030 and that “global progress on decreasing extreme poverty has come to a standstill,” citing the highest rise in global inequality and the worst setback in tackling global poverty since World War II.

According to the IMF, one-third of the global economy will be in recession by 2023. The UNDP has discovered that human development is declining in nine out of ten nations for the first time. The Oxfam research also highlights several fundamental features of global inequality as well as a substantial gap in the taxation system.

Survival of the richest 

Since 2020, the wealthiest 1% have amassed about two-thirds of all new wealth—roughly twice as much as the poorest 99% of the global population. The billionaires’ incomes have decreased significantly since their peak in 2021. However, they are still trillions of dollars richer than before the pandemic. World’s ten richest billionaires became wealthier during the pandemic than in the combined previous 14 years, doubling their wealth from $700 billion to $1.5 trillion, the analysis found. The collective wealth of the world’s 2,755 billionaires increased by $5 trillion.

Furthermore, billionaire fortunes are expanding by $2.7 billion every day despite the fact that inflation outpaces the incomes of at least 1.7 billion employees which is more than India’s population. Food and energy firms, on the other hand, more than quadrupled their earnings in 2022, giving out $257 billion to affluent stockholders while over 800 million people went to bed hungry.

Furthermore, wealth taxes generate just 4 cents out of every dollar of taxable income. And half of the world’s billionaires reside in nations with no inheritance tax on the money they leave to their offspring. Moreover, a torrent of public money injected into the economy by wealthy nations to sustain their people drove up asset values and wealth at the top.

Besides, the present cost-of-living issue, which includes skyrocketing food and energy costs, is also resulting in significant gains for those at the top. Food and energy companies are earning record profits and paying out record dividends to their wealthy shareholders and billionaire owners. Corporate pricing gouging is causing at least 50% of inflation in Australia, the United States and Europe, in what is both a “cost-of-profit” and a “cost-of-living” disaster.

The tax debate

Taxation plays a critical role in decreasing inequality by ensuring that the wealthiest pay their fair amount. However, tax policy decisions have increasingly increased inequality over the last decades by transferring the tax burden from those who can afford to pay to those who cannot. Capital gains tax rates, which are the major source of income for the top 1% in most nations, are barely 18% on average across more than 100 countries. Only three nations’ tax capital income is higher than labour income.

Zooming in at the very top indicates that many of the world’s wealthiest people today get away with paying almost no tax. Elon Musk, for example, pays a “real tax rate” of 3.2%, while Jeff Bezos, another of the wealthiest billionaires, pays less than 1%. In comparison, Aber Christine, one of the market vendors with whom Oxfam works in Uganda, pays 40% of her earnings in taxes.

Where are we heading?

The economic disparity may swiftly lead to political inequalities, such as differences in representation and voice in international organisations. In this aspect, it may not only erode these organisations’ legitimacy but also obstruct efforts at international cooperation. Furthermore, inequity may lead to a divide between the affluent and the poor in the future. This can culminate in social and political turmoil.

Moreover, if people perceive the system as unfair and their needs are not being met, they may lose trust in government institutions. Mistrust may fuel public outrage and political action as people seek greater fairness and representation.

In certain nations, the concentration of wealth and political power in the hands of a few numbers led to a loss of representation for the majority of inhabitants. As a consequence, the legitimacy and popularity of the administration are expected to decline in the near future. Populist political movements, on the other hand, may emerge in response to inequality when individuals strive to challenge established power structures and demand more representation and fairness.

Towards an endless war

The beginning of 2022 gave us the optimistic impression that human society’s unification can put the horrors of pandemics and economic crises to an end. However, the war has shaken hands with humans since its inception, and this has been reflected in 2022 as well. On European territory, the most explosive conflict since World War II has begun.

On the other hand, this conflict has helped the wealthy. Practically every industry, from energy to ICT to weaponry, is expected to increase significantly by 2022. As a consequence, the conflict has repeated its pattern of “killing many and benefiting few.”

Inequality costs people 

Every day, at least 21,300 individuals die as a result of inequality. That means one individual dies every four seconds. This is a very conservative estimate of the number of fatalities caused by starvation, a lack of access to healthcare, climate breakdown in impoverished nations and gender-based violence against women that is entrenched in patriarchy and oppressive economic systems.

Millions of individuals would be living today if they had received Covid-19 vaccination. But they were denied the opportunity while large pharmaceutical firms maintain monopolistic control over this technology. According to research, there are now more than 160 million more people living below the poverty line than there were before the pandemic.

The social safeguards are being reduced as a result of governments’ struggles to pay for rising Covid-19-related debt. Therefore, the United Nations issued a warning in September of last year that lower-income nations will suffer economic losses of $12 trillion as a result of the pandemic. Therefore, the poverty issue will hinder progress in the upcoming months and cause significant social problems.

Inequality will intensify the effects of climate change

Inequality is fatal for humanity’s future. The tremendous concentration of wealth, power and influence among a few at the top has a negative impact on the rest of us. When affluent nations refuse to address the repercussions of their culpability for an estimated 92% of all past emissions, we all suffer. We all lose when the world’s richest 1% emits twice as much carbon as the lowest 50%. Or, when a few big businesses can monopolise the production of life-saving medicines and treatments during a worldwide pandemic.

We are experiencing an unparalleled time of numerous catastrophes. Tens of millions of people are confronting starvation. Hundreds of millions more are facing insurmountable increases in the cost of essential products or heating their houses. Furthermore, climate change is devastating economies and driving people to evacuate their homes as a consequence of droughts, cyclones and floods. As a result, in order to urgently establish a fairer society and preserve our planet, we must rethink, reinvent and repurpose our economy to address these issues.

We must, in particular, rediscover the lessons of our own past, when the wealthy paid their fair share of taxes. Those taxes helped support the growth of rights such as universal access to healthcare and education. Inequality is not unavoidable. It is also a policy decision. Governments may adopt clear, tangible and practical initiatives to drastically decrease inequality and give themselves the budgetary strength to safeguard their people. They may opt to assist people safely through crises rather than impose unneeded hardship on them via austerity programs.

– S. M. Saifee Islam is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).

Published in The Business Standard [Link]