Global inequality is a failure of imagination. Here's why

We expect our leaders of industry and politics to be capable people who appreciate their power and are able to understand evidence and consequences.

We trust that they can act responsibly, to listen and learn, and make big decisions that can contribute to a broader collective interest.

So … how exactly are we here? In a world facing existential danger, divided, feeling out of control, with warning sirens blaring.

For 10 years now, Oxfam has tried to answer this by following the money.

From all the deprivations and discriminations suffered by people living in poverty — many whom we work with — we have traced the systemic flow of the world’s wealth up to the richest individuals and corporations.

It is inconceivable to me how global inequality could have gotten any worse. But incredibly, it has, as our latest report Survival of the Richest shows.

During the past decade, the richest 1% of people captured around half of all new global wealth. But even that pales against what is happening now.

Since 2020 and over these pandemic years, the top 1% have managed to seize nearly two-thirds of the $42 trillion in newly-created wealth. This is nearly twice as much money as gained over the same period by the remaining 99% of humanity.

The “average” billionaire has gained roughly $1.7 million for every $1 of new wealth earned by a person in the bottom 90%. The collective wealth of the world’s super-rich is increasing by $2.7 billion a day. Yes, really. You may want to read that again.

These numbers feel staggering, at a scale that is almost beyond comprehension. Most of us have difficulty imagining what one billion of anything actually is.

Here’s what inequality really means…

Inequality is the accumulation of wealth and power in a few hands. It has corrupted and polarized our politics and media. It is corroding our democracies.

It is widening the gap between races and genders. It fuels the unrelenting extraction and monetization of our natural resources, driving conflict and climate change.

Emissions from a billionaire’s investments produce a million times more carbon than the average person.

We can only conclude that the elite own the rules and their functionaries fight to rig them in their interests, especially on tax, labour rights, monopolies and intellectual property; on land control, planning and extraction rights, and union-busting.

Everything, in fact, that serves to maximize profit, solidify control, minimize cost and relocate risk. Everything that quashes accountability and dissent.

They sell us the story of this wealth somehow “trickling down”. They propagandize “austerity” as the unfortunate cure.

Over the next five years, three-quarters of the world’s governments are planning public spending cuts of $7.8 trillion.

They blame migrants. People of colour. Women. Unions. They blame nurses and teachers. Activists. They blame “the poor” and those living in the margins. And so, on it goes.

Never the rich. Never the elite. Never the City or Wall Street. Not the system. Occasionally they’ll throw out a rogue scapegoat, a Ponzi too far.

Here’s what inequality really means…

We’ve already lost the race to end extreme poverty by 2030. At least 1.7 billion workers now live in countries where inflation is outstripping wages. Millions are struggling to find food, pay their bills or heat their homes.

We’re losing the race to keep global warming below 1.5ºC degrees. The climate crisis is driving people from their lands at this very moment, by drought, fire, failing crops, cyclone, or flood.

We’re losing the race against hunger. More than 820 million people are now going hungry, most of them women who have to eat last and least. In addition, 339 million people now need humanitarian aid – the most ever. I’m talking here about emergency food rations and clean water and shelter.

Poor countries are so indebted now, including to predatory private lenders, they are having to spend four times more on debt repayments than on healthcare.

Over the last 40 years, there has been a systematic race to the bottom on the taxation of the richest, driven by economic ideology and the capture of politics by rich elites.

Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3% from 2014 to 2018. Jeff Bezos paid less than 1%. Meanwhile, Aber Christine, a flour seller in Uganda, makes $80 a month and pays a tax rate of 40%.

Half of the world’s billionaires live in countries with zero inheritance tax for direct descendants. They have a $5 trillion tax-free treasure chest to pass seamlessly onto the next generation, building tomorrow’s elite.

How is all that fair and reasonable?

As recently as 1980, the average marginal tax rate on the highest incomes was 51% in Latin America. Now it is nearly half that.

In the US, the top federal income tax rate averaged 81% between 1944 and 1981. Progressive taxation and successful economies went hand in hand for decades.

It is time to relearn that lesson, and fast. I hope we still have it within ourselves to be shocked into action.

Taxing the richest will start to claw back their power and reduce not only economic inequality but racial, gender and colonial inequalities, too.

Billionaires are a potent symbol of policy failure, of an economic system that is not working for the majority.

The number and wealth of billionaires has doubled in 10 years. Let’s use all the tools at our disposal, including new taxes, to turn this around.

Let’s halve the number of billionaires by 2030 and set a goal to eliminate them altogether as part of the journey to a fairer, more equal and sustainable world free from poverty.

No more austerity. Get more money circulating to fight inflation and hunger, and to invest in healthier and happier and cleaner-powered societies. This will reduce social inequalities and the oppression of women and racialized groups and other minorities.

Taxing the rich is popular, both historically and today too across the political spectrum. It consistently polls highly with publics from the US to India, Brazil and throughout Africa.

I believe we are here because this system has hollowed out our collective imagination to any possibilities that deviate from this catastrophic status quo.

Our leaders need to imagine new economic processes and structures that we can build together to face down these crises and create a fairer, more equal world and to save our planet.

Inequality is destroying us. It is not inevitable. It is a choice.

Worst of all, inequality is revealing us as lacking in both empathy and imagination.

There is nothing less defining of humanity than that.

Download Oxfam’s new report Survival of the Richest.