The amassed fortunes of the globe’s five wealthiest individuals have experienced a staggering surge, more than doubling to an astronomical $869 billion since the tumultuous year of 2020, as reported by the renowned anti-poverty organization Oxfam.
This revelation, disclosed in Oxfam’s comprehensive report titled “Inequality Inc.,” coincides with the annual congregation of business elites during the World Economic Forum (WEF) meeting in Davos, spanning from January 15 to 19.
The report sheds light on a concerning trend where billionaires are increasingly taking the reins, with either direct management or primary shareholder roles in seven out of the world’s ten largest companies.
Despite the world grappling with various crises, notably the far-reaching impact of the COVID-19 pandemic, billionaires globally have seen their collective wealth soar by an astonishing $3.3 trillion since 2020.
A specific focus of the report centres on the exponential rise in fortunes of the five wealthiest men on the planet: Elon Musk of Tesla, Bernard Arnault and his family associated with the luxury conglomerate LVMH, Jeff Bezos, the visionary founder of Amazon, Larry Ellison, the trailblazing founder of Oracle, and the venerable investment guru Warren Buffett. The combined wealth of these magnates has surged by an impressive 114% in real terms since the pandemic-ridden year of 2020.
Traditionally released just ahead of the Davos forum in the Swiss Alpine resort, Oxfam’s annual report on global inequality serves as a poignant reminder of the pressing need for economic reforms. Behar’s assertion underscores the imperative for a paradigm shift, questioning the prevailing narrative that seems to prioritize the super-rich within the capitalist structure.
In essence, the Oxfam report paints a vivid picture of a world grappling with an exacerbated wealth gap, where the fortunes of a privileged few skyrocket while a significant portion of the global population faces economic hardship. This narrative aligns with Oxfam’s overarching mission to champion socio-economic justice, urging policymakers and leaders to address the root causes of this profound inequality.
Cost-of-living crisis
The rallying cry against inequality echoes loudly as Oxfam, on January 15, issued a fervent call for governments worldwide to rein in corporate power, asserting that the chasm between the haves and have-nots is not a mere coincidence.
The organization advocates for decisive action, proposing measures such as breaking up monopolies, levying taxes on excess profit and wealth, and endorsing alternative models of corporate governance, such as employee ownership.
Oxfam’s clarion call comes at a time when 148 top corporations are reported to have reaped staggering profits totalling $1.8 trillion, marking a significant 52% increase over a three-year average. This financial windfall, however, has not trickled down to the millions of workers grappling with a cost-of-living crisis, exacerbated by inflation-induced wage cuts in real terms.
A poignant assertion from Amitabh Behar, the interim Executive Director of Oxfam International, sheds light on the deliberate nature of this growing wealth gap. “This inequality is no accident; the billionaire class is ensuring corporations deliver more wealth to them at the expense of everyone else,” he remarked.
The report substantiates this claim by underscoring a disconcerting projection: the possibility of witnessing the world’s first trillionaire within a decade, a stark juxtaposition against the estimations that ending poverty would take a staggering 230 years.
The report draws attention to the rarity of such a financial milestone, noting that the individual who achieves the trillion-dollar mark, possibly not even featured on the current roster of the richest individuals, would essentially hold a comparable economic value to oil-rich Saudi Arabia.
The historical context is interwoven, referencing John D. Rockefeller, widely recognized as the world’s inaugural billionaire in 1916. Presently, Elon Musk, the visionary CEO of Tesla, commands the title of the richest individual globally, boasting a personal fortune just shy of $250 billion, according to Oxfam’s estimations.
The report takes a critical stance on the actions of the private sector globally, alleging an unrelenting pursuit of reduced tax rates, increased loopholes, diminished transparency, and other measures aimed at enabling companies to contribute as minimally as possible to public coffers.
The consequence of this intensive lobbying over tax policymaking, according to Oxfam, has been a significant reduction in corporate taxes. In Organisation for Economic Co-operation and Development (OECD) countries, corporate tax rates have plummeted from 48% in 1980 to a mere 23.1% in 2022, depriving governments of essential funds that could otherwise be channelled to support the most economically vulnerable segments of society.
In essence, Oxfam’s compelling narrative underscores the urgent need for systemic reforms, imploring governments and policymakers to address the root causes of burgeoning inequality and reshape economic landscapes to foster a more equitable future.
What is stakeholder capitalism?
The genesis of the Davos events was grounded in the advocacy of “stakeholder capitalism,” a principle championed by the World Economic Forum (WEF). According to the WEF, this ideology redefines corporations, emphasizing a purpose beyond profit maximization and a commitment to fulfilling “human and societal aspirations as part of the broader social system.”
However, Oxfam’s recent report, drawing from diverse data sources such as the International Labour Organization, World Bank, and Forbes annual Rich List, starkly contradicts the assertion that such aspirations are being realized.
Oxfam’s comprehensive analysis further reveals a grim reality for the global workforce. Over the past two years, nearly 800 million workers have witnessed their wages fail to keep pace with inflation. This stagnation translates, on average, to the equivalent of 25 days of lost annual income per worker, underscoring the economic challenges faced by millions of individuals.
In a disheartening revelation, the study highlights that a mere 0.4% of the world’s 1,600 largest corporations have publicly committed to paying workers a living wage and supporting such remuneration in their value chains. This statistic underscores a pervasive gap between corporate rhetoric and tangible actions in addressing the plight of workers worldwide.
Oxfam’s assessment extends to the global distribution of wealth, revealing a stark contrast. Despite representing only 21% of the global population, affluent countries in the Global North command a staggering 69% of the world’s total wealth and are home to a significant 74% of the world’s billionaire wealth. This data emphasizes the skewed distribution of economic resources, further exacerbating global inequality.
The report also draws attention to the impact of geopolitical events on economic disparities. Oxfam notes that Russia’s invasion of Ukraine in February 2022, leading to soaring energy and food costs, disproportionately affected the poorest nations. This geopolitical event acted as a catalyst for exacerbating the existing economic challenges faced by the most vulnerable populations.
This poignant observation encapsulates the stark realities outlined in the report, prompting a critical examination of the socioeconomic landscape and the imperative for transformative change.
The juxtaposition of the World Economic Forum’s advocacy for “stakeholder capitalism” and Oxfam’s findings underscores the dissonance between rhetoric and action within corporate circles. Despite the purported commitment to societal aspirations, the reality on the ground, as revealed by Oxfam’s analysis, highlights a glaring disparity between stated ideals and tangible outcomes.
The report’s scrutiny extends to the global distribution of wealth, emphasizing the disproportionate concentration of economic resources in affluent countries, particularly in the Global North. Moreover, the impact of geopolitical events, such as Russia’s invasion of Ukraine, serves as a poignant reminder of the vulnerabilities faced by the most economically disadvantaged nations.
As we navigate the beginnings of what Oxfam terms a “decade of division,” marked by economic shockwaves from the pandemic, inflation, and conflict, the imperative for transformative change becomes more apparent than ever. The call for governments and policymakers to address the root causes of inequality resonates, urging a paradigm shift away from shareholder capitalism towards a more equitable and sustainable future.
Oxfam’s compelling narrative serves as a powerful catalyst for dialogue, advocacy, and collective efforts to reshape economic landscapes and champion socio-economic justice on a global scale.