Yesterday, January 16, Oxfam published its report, Survival of the Richest. It opens by telling us that:
Tens of millions are facing hunger. Hundreds of millions more face impossible rises in the cost of basic goods or heating their homes. At the same time the very richest have become dramatically richer and corporate profits have hit record highs, driving an explosion of inequality. Taxing the rich is vital and can set us on a path to a more equal, sustainable world free from poverty.
In line with all liberal humanist perspectives – and with “common sense” empiricism 1 – Oxfam defines the problem as one of unfair sharing of wealth. Marxists, me included, beg to differ. The misery and madness inflicted by capitalism (not just poverty but ecocide and permanent war to boot) have their roots not in its relations of wealth distribution but those of wealth production. 2 This was true in the 19th century, when Marx took J S Mill to task on the question. And it is truer than ever today, in an imperialist age marked by the globalisation – northern capital v southern labour 3 – of those relations of production.
But who would deny that today’s staggering levels of inequality, impeccably documented by the likes of Oxfam and The Rowntree Foundation, are an affront to the most basic notions of human decency? Or that the affront is compounded by grossly unfair taxation?
The latter is driven, though this truth falls too far outside the Overton Window for mainstream recognition, by the State under capitalism having always been owned by its ruling classes. The difference now being that those ruling classes have in the West largely ceased to be industrial capitalists who needed not just roads, railways and electricity but the social infrastructures to maintain healthy and suitably trained workforces. With industrial capital supplanted by finance capital in the West, and with rentiers more powerful than the politicians they own, equitable taxation, even if still regarded as desirable in a shrinking State, becomes less attainable with each passing year.
None of which escapes the Socialist Equality Party, whose critical welcoming of Survival of the Richest has furnished my second post in a row from its site at WSWS. Writing the following day, January 17, here is Jacob Crosse on this latest Oxfam offering.
Oxfam report documents “explosion of inequality” during pandemic
In the face of an unending pandemic, war and inflation, the wealthiest people and multinational corporations on the planet became “dramatically richer,” driving an “explosion of inequality,” according to the latest report from the UK-based charity Oxfam.
In the report, titled “Survival of the Richest” and delivered ahead of the World Economic Forum meeting in Davos, Switzerland, the charity documents an enormous concentration of wealth in the hands of a tiny corporate and financial oligarchy.
The report refers to what it calls a “global polycrisis” developing throughout the world:
Tens of millions more people are facing hunger. Hundreds of millions more face impossible rises in the cost of basic goods or heating their homes. Climate breakdown is crippling economies and seeing droughts, cyclones and floods force people from their homes. Millions are still reeling from the continuing impact of COVID-19, which has already killed over 20 million people. Poverty has increased for the first time in 25 years.
In the midst of this social catastrophe, the report notes, “the very richest have become dramatically richer and corporate profits have hit record highs.”
In the first page of its executive summary, Oxfam lays out the following staggering facts:
- Since 2020, the richest 1 percent have captured almost two-thirds of all new wealth—nearly twice as much money as the bottom 99 percent of the world’s population.
- Billionaire fortunes are increasing by $2.7 billion a day, even as inflation outpaces the wages of at least 1.7 billion workers, more than the population of India.
- Food and energy companies more than doubled their profits in 2022, paying out $257 billion to wealthy shareholders, while over 800 million people went to bed hungry.
- Only 4 cents out of every dollar of tax revenue comes from wealth taxes, and half the world’s billionaires live in countries with no inheritance tax on money they give to their children.
- A tax of up to 5 percent on the world’s multimillionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty, and fund a global plan to end hunger.
The extreme growth of social inequality continued through the pandemic, though there was a slight dip in the wealth of the oligarchy last year, due to the increase in interest rates by central banks aimed at beating back demands for higher wages by workers.
In a stunning graph, Oxfam showed that the top 1 percent siphoned 63 percent of all new wealth created, more than $26 trillion between 2020-2021. The top nine percent below them gobbled up 27 percent of all new wealth, a bit more than $11 trillion, leaving only 10 percent, or about $5 trillion for the bottom 90 percent, or 7.2 billion people.
Based on these figures, one can only conclude that the pandemic, which is a massive catastrophe for hundreds of millions of people, has been a miracle for the rich.
This concentration of wealth has been facilitated by capitalist governments. Citing a study conducted by the Research School of International Taxation (RSIT), which covers 142 countries, Oxfam noted that states throughout the world have reduced taxes on corporations, while increasing Value Added Tax (VAT) or consumption taxes, which disproportionately affect the incomes of workers and the poor.
For every $1 of tax revenue, 44 percent of it was generated via VAT or consumption taxes, in 75 countries measured by RSIT from 2007 through 2019. Corporate income taxes meanwhile only accounted for 14 percent of tax revenue, four percentage points less than payroll taxes.
Notably, for the first time in 25 years, Oxfam reported an increase in wealth inequality and poverty, “simultaneously.” In another “first,” the United Nations’ Human Development Index—which measures life expectancy, expected years of schooling and inequality within a country—fell in nine out of every 10 countries in either 2020 or 2021.
No matter where they live, workers around the world have had to contend with skyrocketing inflation, which Oxfam, using data from the International Labor Organization, estimated wiped out “$337 billion” in wages from workers last year. Revealing the global character of the crisis, Oxfam conducted an analysis of wage data from 96 countries in 2022 and found that at least 1.7 billion workers, nearly a quarter of humanity, live in countries where inflation is outpacing wage growth, driving up inequality and poverty.
In contrast to claims of US President Joe Biden and other leaders of the major capitalist countries, the authors of the report squarely place the blame for once-in-a-generation inflation on corporate profiteering. Noting that this began well before the pandemic, Oxfam wrote that Global Fortune 500 firms increased their profits by 156 percent, from $820 billion in 2009, to $2.1 trillion in 2019, and that this trend has only accelerated.
The report revealed that these price increases were the result of a small number of corporations which have “effective oligopolies” allowing them to “maintain high prices” while passing on savings when the costs fall to “shareholders rather than consumers.”
The charity analyzed the profits of the largest 95 food and energy companies in the world, and found that “Corporate price profiteering is driving at least 50 percent of inflation in Australia, the US, and Europe, in what is as much a ‘cost-of-profit’ crisis as a cost-of-living one.”
Oxfam noted that in response to widening inequality, the vast majority of governments around the world, 95 percent, did not increase taxes on the rich; instead they, “either did not increase, or even lowered, taxes on rich people and corporations.”
That is, instead of enacting hugely popular policies to lessen inequality, capitalist governments the world over have foisted the “polycrisis” onto the back of the working class, while enriching a tiny parasitic few.
Beyond starving society of resources, the Oxfam report states that the corporate and financial oligarchy is a massive factor in the crisis. It notes that “the richest are key contributors to climate breakdown: a billionaire emits a million times more carbon than the average person…” It adds that “the very existence of booming billionaires and record profits, while most people face austerity, rising poverty and a cost-of-living crisis, is evidence of an economic system that fails to deliver for humanity.”
The facts and details presented in the report should be studied by every worker. However, as liberal reformists, they evade the fundamental issues. Oxfam presents as a panacea a “one-off solidarity wealth tax” which would eventually lead to “permanent tax increases” with the goal of eventually eliminating “billionaires.”
Such a proposal evades two fundamental facts: 1) Those who have used their power to accumulate their wealth, and who control capitalist governments throughout the world, are not going to just give it up; and 2) The massive concentration of wealth is rooted in the capitalist relations of production, based on the exploitation of the working class for corporate profit.
There is no solution to the crises confronting mankind without a frontal assault on the wealth and power of the corporate and financial oligarchy. But the power of this oligarchy can and will be broken, its ill-gotten fortunes expropriated, only through a massive social movement of the working class, which has as its aim the conquest of state power and the reorganization of all of social and economic life on the basis of equality and socialism.
As ever with WSWS, I distance myself from the solution articulated in that last paragraph. Not because I deem it undesirable. Simply because, in line with all such calls by the revolutionary left, it maintains a deafening silence on the small question of how power is to be seized from ruling classes armed to the teeth, their counterinsurgency skills honed in the world’s hell holes from Sharpesville and Bogside to Gaza, and possessing surveillance technologies beyond the wildest dreams of the twentieth century totalitarianisms.
It is on this basis, combined with equally low confidence in other oppositional currents in the West, that such hopes as I still harbour for humanity rest with the challenge to neoliberalism from China rising. But that’s a story told elsewhere. Here for instance.
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- This is the second time recently that I’ve used “empiricism” in a critical way, despite often calling for an empirical approach. I can best explain myself by contrasting three different understandings of how we get to know stuff. One is idealism, which says knowledge may be derived by contemplation, without doing anything so vulgar as to leave our armchairs and look at the world. Another is empiricism, which holds the opposite: that information gathered by our senses is a sufficient condition of knowledge. Yet another speaks of the need for empirically informed thinking – with the information gathered by our senses a necessary but insufficient condition of knowledge. Also required is our meditation on the deeper connections, abstract and by definition inaccessible through sensory experience, between the things we see, hear, smell, taste and touch. Of course, neither idealism nor empiricism are ever encountered in pure forms: no one could be that obtuse! I speak only of relative tendencies. Here endeth the epistemology lesson.
- What distinguishes capitalism’s exploitation of wealth-producers is that while slavery and feudalism appropriated surplus wealth – over and above what was needed to keep the toilers alive and reproducing – overtly and after it had been produced, capitalism does so covertly, before it is produced and valorised in the markets. This is not a small difference. Because capital’s exploitation occurs out of sight – Adam Smith’s Invisible Hand? – well intended empiricist understandings (footnote 1) are deceived by infamies which take the surface forms of unfair wealth sharing when the problem lies deeper.
- That imperialism sees the internationalising – northern capital vs southern labour – of productive relations does not mean that poverty and inequality do not afflict the West. Of course they do! How could it be otherwise? Even as monopoly capital extracts super profits through the natural assets and cheap labour pools of the global south, at home it extracts them through various forms – land and property rental, mortgages and student loans, health and social care creepingly privatised, and boom time for insurers (Hudson is good on all this) – of renting out unearned and largely unproductive money. (That last a truth obscured by the distortions of GDP metrics in FIRE-centric economies. As is the fact that the inequalities so thoroughly researched by Oxfam are as dysfunctional as they are immoral. Where most of us have little choice but to part with our hard earned in the real economy; the super rich invest their ill-gotten in the ways just noted; ways which generate profits by recycling “added” value rather than producing new value.) And now think tanks for the oligarchs tinker at Davos with the question of what is to be done with hundreds of millions of labour sellers in the West, now surplus to the requirements of private profit. Obscene as they are, the inequalities of capitalism aren’t the real problem. That honour belongs to the economic lunacy and ecocidal, Armageddon-bent tendencies of a system whose addiction to private profits generates those inequalities.