The combined fortunes of the world’s five richest men have more than doubled to $869 billion since 2020 while five billion people have been made poorer, anti-poverty group Oxfam said.
An Oxfam report titled “Inequality Inc.”, which comes as business elites gather between January 15 and 19 for the annual World Economic Forum (WEF) meeting in Davos, found that a billionaire is now either running or is the main shareholder of seven out of the world’s 10 biggest companies. Billionaires have become $3.3 trillion richer since 2020, despite many crises devastating the world’s economy since this decade began, including the COVID-19 pandemic.
The group also said the fortunes of the five richest men—Tesla CEO Elon Musk, Bernard Arnault and his family of luxury company LVMH, Amazon founder Jeff Bezos, Oracle founder Larry Ellison, and investment guru Warren Buffett—have spiked by 114 per cent in real terms since 2020, when the world was reeling from the pandemic.
“We cannot continue with these levels of obscene inequality,” Amitabh Behar, the interim Executive Director of Oxfam International, said. He added that it showed that “capitalism is at the service of the super-rich”. Oxfam’s yearly report on inequality worldwide is traditionally released just before the Davos forum opens in the Swiss Alpine resort of the same name.
‘Inequality is no accident’
On January 15, Oxfam called for governments to rein in corporate power by breaking up monopolies, instituting taxes on excess profit and wealth, and promoting alternatives to shareholder control such as forms of employee ownership. It estimated that 148 top corporations made $1.8 trillion in profits, 52 per cent up on a three-year average, allowing hefty pay-outs to shareholders even as millions of workers faced a cost of living crisis as inflation led to wage cuts in real terms.
“This inequality is no accident; the billionaire class is ensuring corporations deliver more wealth to them at the expense of everyone else,” said Behar. The report evidenced this by highlighting how the world could have its first trillionaire in 10 years, whereas it would take 230 years to end poverty.
If someone does reach that trillion-dollar milestone—and it could be someone not even on any list of richest people right now—he or she or they would have the same value as oil-rich Saudi Arabia. John D. Rockefeller of Standard Oil fame is widely considered to have become the world’s first billionaire in 1916. Currently, Musk is the richest man on the planet, with a personal fortune of just under $250 billion, according to Oxfam.
“Around the world, members of the private sector have relentlessly pushed for lower rates, more loopholes, less transparency, and other measures aimed at enabling companies to contribute as little as possible to public coffers,” Oxfam added.
The charity said thanks to intensive lobbying over tax policymaking, corporations have been able to pay lower corporate taxes, thereby depriving governments of money that could be used to financially support the poorest in society. Corporate taxes have significantly dropped in Organisation for Economic Co-operation and Development countries from 48 per cent in 1980 to 23.1 per cent in 2022, Oxfam noted.
The Davos events were launched to champion “stakeholder capitalism”, which the WEF says defines a corporation as being not just about maximising profits but fulfilling “human and societal aspirations as part of the broader social system”. Oxfam said its report, based on data sources ranging from the International Labour Organization and World Bank to the Forbes annual rich list, showed such aspirations were far from being fulfilled.
“What we know for sure is that today’s extreme system of shareholder capitalism, which puts ever-increasing returns to rich shareholders above all other objectives, is driving inequality,” said Max Lawson, its Head of Inequality Policy.
Meanwhile, nearly 800 million workers saw their wages over the past two years fail to keep up with inflation, resulting on average in the equivalent of 25 days of lost annual income per worker, according to Oxfam’s analysis. Of the world’s 1,600 largest corporations, just 0.4 per cent of them have publicly committed to paying workers a living wage and to supporting a living wage in their value chains, the study found.
Despite representing just 21 per cent of the global population, rich countries in the Global North own 69 per cent of global wealth and are home to 74 per cent of the world’s billionaire wealth, Oxfam said. In addition, Oxfam said Russia’s invasion of Ukraine in February 2022, which sent energy and food costs soaring, disproportionately hit the poorest nations.
“We are witnessing the beginnings of a decade of division, with billions of people shouldering the economic shockwaves of the pandemic, inflation, and war, while billionaires’ fortunes boom,” Behar said.
(with inputs from Reuters, AFP, AP, and PTI)