The widening gap between the rich and the rest has reached an alarming level: only 8 men own the same wealth as half of the world.
How did this happen? Over the last 30 years, the growth in the incomes of the bottom 50% has been zero, whereas incomes of the top 1% have grown 300%, widening the gap inbetween. A key role is played by corporations working for those at the top, squeezing workers, dodging tax and trying to maximize returns to their shareholders. The super-rich also contribute; once wealth is accumulated it develops a momentum of its own which is made easier by tax avoidance and by shaping politics in favour of the rich.
The cause of growing inequality also lies in these false assumptions steering its course:
1. The market is always right and the role of the government in the economy should be minimized.
On the contrary: governments should be powerful players in the economy. 75% of extreme poverty could be eradicated given our existing resources, simply by increasing taxation and cutting military and other regressive spending.
2. Corporations must maximize profits and returns to shareholders at all costs.
On the contrary: businesses prioritizing a social mission over profit maximization have grown significantly, often outperforming other businesses on sales and employment growth, without cutting wages whilst also treating natural resources more sustainably.
3. Extreme individual wealth is benign and a sign of success- and individual inequality is not relevant.
On the contrary: countries that are less unequal grow more.
4. GDP growth should be the overriding goal of policy making.
On the contrary: GDP does not take into account many factors, including inequality.
5. This profit-driven capital growth model is gender-neutral.
On the contrary: we do not have complete equality of opportunity. In many countries there are still huge barriers to the full participation of women in society.
6. The planet provides inexhaustible resources for the economy.
On the contrary: Our resources are limited, but due to the environmental blindness of our economies and the increased relative power of the rich to influence policy to their advantage, the long-term perspective is suppressed.
What is the solution? Building a human economy, where governments work for the 99%, collaborating among themselves to create thriving business environments and to end the extreme concentration of wealth to end poverty. This economy works equally for men and women, provides technology for all and is powered by sustainable renewable energy.
For further information, click here to read the full report by Oxfam.