By Paul M. Lewis
Only some five or six years ago, it took close to 400 rich people to equal the wealth of one-half of the world’s population. And as astounding as this may in itself be, the numbers that register today go even beyond that. In 2016, the amount of riches held by just 62 individuals equals that of 3.5 billion people in the world combined.
The Gateses, the Buffets, the Slims, and the Kochs of the world are not just rich, they are so super-, mega-, ultra-rich that the money they have could—and to an extent does—bury much of the population of the globe. At these levels, the notion of wealth begins to blur a bit in the minds of most of us. We are no longer talking just about dollars and cents, that is, bills and coins, but instead we begin to enter into the realm of exotic financial tools that expand exponentially what we normally think of as money. For example, derivatives, monetary instruments that allow parties to create contracts between themselves for the purpose of benefiting from underlying assets or options such as futures, are worth far more than mere money, at least as we normally think of it.
The amount of simple hard cash in circulation in the world amounts to something on the order of about 5 trillion dollars. If we consider only that figure, these 62 super-rich men (it is mostly men, not surprisingly) own about 1.75 trillion dollars. However, if we move on to these other ways of valuing wealth in the world, what they are worth is far greater. It’s estimated that the derivatives market alone may be valued at close to 630 trillion dollars. No one knows exactly how much of this kind of wealth the mega-rich own, because it is often held in secret and in accounts that are closed to government scrutiny, and therefore to taxation. But we would probably not go too far afield in guessing that a very large percentage of derivative wealth is held by these same Gateses, Buffets, Slims, Kochs, and so on, and of course in the portfolios of multinational corporations like Exxon, Royal Dutch Shell, Berkshire Hathaway, GE etc. Bill Gates alone, the richest individual man in the world, is said to be worth $77 billion. If we take the Koch brothers together (and we know they often act in tandem, at least politically), they are even richer, at a combined wealth of about $80 billion. And if we are talking dynasties, the Walton family of Wal-Mart fame, taken as a whole, is valued at well north of $140 billion.
What are we to make of this kind of wealth, and of the ever expanding, yawning chasm between the super-rich, the middle class, and the super-poor? Most people in the world believe that you get money by working. When I was a boy in the late 40’s and early 50’s, living in an even then dying industrial town in upstate New York, you attended high school, graduated, and then went to work in one of the local factories. My brother worked on an assembly line that turned out radiators for the Ford Company; one of my uncles worked in a local steel mill and another in an Army arsenal that happened to be located nearby as a toolmaker. My mother sold women’s lingerie in Pearl’s Department Store in Troy, New York. She came home with $35.00 a week, and my father, who worked in a sandpaper factory, took home $65.00 a week.
Even in those years, it was not easy to raise a family of three kids on a weekly income of one hundred dollars. But that was, and is, wealth compared to the poorest of the poor, who today subsist on $1.25 a day. Many such people cannot find what we might think of as actual jobs, but live instead on scavenging or begging. If you are lucky enough to have a bit of land, you scratch out a living for yourself and your family through subsistance farming, if the rains come on time, or in the hope that not too much rain comes, and if you can afford a bit of seed in order to plant a crop for next year.
When we consider these figures and the depth of poverty so many people live in, we often think of it in moral terms. And undoubtedly there is a kind of moral framework in which we ought to consider such disparities. Questions of justice and injustice spring to mind. Is it right for such enormities of wealth to be concentrated in 62 men, while billions of people barely have enough to buy a loaf of bread or a bowl of rice?
But as crucial as this viewpoint may be, we must also consider issues beyond justice and injustice. Questions related to the general economy and to politics also arise. When so much money is concentrated in so few people, there is that much less wealth available to invest in the lives of the have-nots (yes, in this sense, it is a kind of a zero sum game). People without resources cannot buy things they need; they cannot purchase food and clothing for themselves, or afford a clean and decent place to live, to say nothing of needed medical attention and an education so that their children will have a chance at a better life than they have had. As such, the cycle of poverty repeats itself endlessly, and the poor not only remain poor, but they become more and more desperate. Additionally, this lack of buying power on the part of so many actually starves the market itself; when sellers are no longer able to move their wares, they stop buying from suppliers, and a downward spiral begins to set in.
Neither do desperate people make for a stable social order. Why should they? Why try to participate in a political system that appears to exclude you, that criminalizes you for being poor, or that ostracizes you from obtaining the bare necessities of life? And while factors like these do not fully explain dissident terrorist groups such as ISIS, they do go a long way toward helping us understand why young men and women feel they have nothing to lose, why they feel hopeless and enraged, and why they may be prone to follow authoritarian demagogues who promise ascendency in this world and reward in the next, if only they will believe, join up, and follow proper orders.
Although the world-wide stock markets and related money markets, where the real wealth is made, have taken a bit of a beating of late, even so they have risen enormously over the last 5 to 6 years. In a similar vein, CEO compensation has increased by more than 40% during that same period of time, while the wages of every day working people have remained either flat, or actually fallen, in real dollars. “The poor,” as one Catholic priest once told me many years ago, “we shall always have with us.”
He was not wrong. There will always be a disparity between people and how much money they have. To a large extent, such disparities are fueled by things like family wealth (those who come from money have a far greater chance of making money), as well as race, class, and educational levels. For better or for worse, these are things we all live with. But if we do not find some way of better disseminating what might be called “wealth opportunity,” if not actual wealth, if we do not begin to grapple with providing people with the chance to earn a living that not only gives them daily necessities, but one they can take some pride in as well, then we are dooming our world to ever increasing instability, insecurity, and terrorism.
In the end, an economy in which less than 1% of the population owns half of the world’s wealth is not merely unfair and unjust, it is also a highly dangerous world for all of us to live in.