A project of the
Institute for Policy Studies

To End Extreme Poverty, End Extreme Wealth

The world’s wealthy gathered in the Swiss Alps once again last week to discuss how to ‘solve’ the world’s toughest problems. The world’s biggest problem, suggests one top global anti-poverty outfit, may be their fortunes.

By Sam Pizzigati

IMF chief Christine Lagarde told the world’s business elites in Davos last week that “the economics profession and the policy community have downplayed inequality for too long.”

Apologists for inequality have a standard retort to anyone who calls for a more equal distribution of the world’s treasure. If you took all the wealth of the wealthy and divvied it up equally among all the poor, the retort goes, no one would gain nearly enough to accomplish much of anything.

Oxfam International, one of the world’s premiere anti-poverty charitable organizations, would beg to differ. The world’s top 100 billionaires now hold so much wealth, says a new Oxfam report, that just the increase in their net worth last year would be “enough to make extreme poverty history four times over.”

“Oxfam’s mission is to work with others to end poverty,” Oxfam analyst Emma Seery noted last week. “But in a world with limited resources, this is no longer possible without an end to extreme wealth.”

Oxfam timed its new analysis, The cost of inequality: how wealth and income extremes hurt us all, to appear right on the eve of last week’s World Economic Forum in Davos, Switzerland. This earnest “issues” confab annually brings together a glittering array of global business and political leaders.

The world’s corporate and financial elites began this January trek into the Alps back in 1971. But the Davos sessions really didn’t start grabbing big-time global media attention until the go-go 1990s.

“Throughout the boom years,” as a UK Guardian profile last week noted, “chief executives would gather every winter high up in the Swiss Alps to discuss in a lordly fashion the world economy and how it could be revised to suit their objectives and views.”

The power suits that frequent Davos now feel pressured to address the global economic inequality they’ve so long tried to sweep under the rug.

But in these days of deep global economic uncertainty, the power suits that frequent Davos have lost their mojo — and even feel pressured to address the global economic inequality they’ve so long tried to sweep under the rug.

That pressure last week came from figures like Christine Lagarde, the former French finance minister who now directs the International Monetary Fund. Lagarde blasted outsized executive pay in high finance, attacked bankers for lobbying against new regulation, and called for more “robust social safety nets.”

Oxfam, for its part, is calling for much bolder steps to narrow the stunning gap between the global uber rich and everyone else. The group is urging world leaders to “commit to reducing inequality to at least 1990 levels.”

Meeting that goal, the new Oxfam report relates, would require a wide range of measures, everything from far more steeply graduated income tax rates to actual pay caps that limit how much corporate executives can take home to a multiple of what the lowest-paid workers in the firms they run are making.

Oxfam is also emphasizing the importance of cracking down on offshore tax havens. As much as a quarter of global wealth now sits shielded offshore.

But don’t hold your breath waiting for the Davos crowd to buy into any of this bolder agenda. Even the modest reforms that the IMF’s Lagarde urged last week found no wide support among the corporate and banking movers and shakers who ambled up to the Alps for this year’s Davos gathering.

Oxfam is urging world leaders to ‘commit to reducing inequality to at least 1990 levels.’

One American on hand for the 2013 Davos festivities, JPMorgan Chase chief exec Jamie Dimon, made no move to hide his distaste for reformers. Bank regulators, he charged, were “trying to do too much, too fast” — and spreading “huge misinformation” about the noble work underway at banks like his.

“We’re doing the right thing,” Dimon assured his fellow Davos notables.

Other global corporate notables at Davos sang a similar tune. Azim Premji, the chairman of the Bangalore-based Indian high-tech giant Wipro, admitted that the new Oxfam data — on how the richest 100 people in the world are earning much more than enough to end the world’s worst poverty — do “sadden” him.

But Premji declined in an interview to term the incredible concentration of the world’s wealth in any way “unethical.” We need not waste time, he suggested, worrying about “redistribution.” We need instead to help the rich grasp their “obligation,” their “trusteeship responsibility,” to wield their wealth for good.

Trust the rich, in other words, to solve our problems.

Not on your life, says Oxfam.

Sign up for To Much“In a world where even basic resources such as land and water are increasingly scarce,” Oxfam’s Jeremy Hobbs sums up, “we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left.”

  • JPSnoopington

    Greed. That’s what I see in all these redistribution articles.

    “I have never understood why it is “greed” to want to keep the money you’ve earned, but not greed to want to take somebody else’s money.”

    -Thomas Sowell, Stanford University

    You want to make money? Get a worthwhile education in something useful, even if it’s shop classes in high school. Then get a job and don’t neglect saving a chunk of your paycheck for investment. You’ll do fine.

    Do not waste your time on an unimportant pursuit like spending your life writing articles complaining that others have been successful but you missed out. That is a true waste of basic resources.

    • allen

      such moronic nonsense, go away already

      • JPSnoopington

        You are a prime example of the knowledge needy. Did you never learn grammar or punctuation? If you are still in third grade, tell the teacher you need some help.

    • Gregory Vile

      Snoop is such a goon. No understanding of economics, ethics, the purpose of society, or even of what real work is. Just another fool suffering from narcissism wishing he had riches to brag about and who fails to even attempt to understand the world and human history.

      Our species is too neurotic and immature for extreme wealth. We simply cannot handle it properly.

      • JPSnoopington

        Name-calling, unfounded assumptions, and pscyco-analysis without any basis all rapped into one short paragraph. Well done.

        You should not have followed up that masterful work with a nonsensical second paragraph, however.

  • Peter Gatliff

    “The health of a nation is more important than the wealth of a nation”. Will Rogers,Oklahoma

  • Parthasarathy Shakkottai

    USA is a money creator and does not need taxes to spend. The private
    sector needs new money to grow. New created money is the DEFICIT. Taxes
    do not matter.

    USA would be better off with huge deficit funding to cover all social
    needs like SS, medicare for all, free college education, generous
    funding for states, Arts etc with no fear of INFLATION. This will also
    reduce income inequality, a measure of national well being. it is not necessary to tax anyone more. Eliminating FICA will help the lower end and support small businesses too. All that is required is more funding on infrastructure. Monetary
    sovereignty is explained in

  • Ash

    I’m doing a report for my Honors History Social Studies. This really helps a lot :)

    My opinion is to maybe take a more socialistic approach, just to even the playing field a bit by making the income taxes higher for those who have more than enough and use those taxes towards the impoverished. Though I understand that that person earned the money, but don’t they realize that humans die every day because they didn’t have enough money to survive even when they do work for an income.

  • L Carol Auten

    First, to those who need to make billions of dollars in order to be incentivized -You must be the laziest people on earth. Second, no one earn billions without taking food from the mouths of the poor. I have a solution that could help with wealth disparity. Replace pride in wealth with pride in infrastructure support.

    The world bank should put a cap on personal wealth at 100 million. Donate balance of personal wealth to infrastructure and schools of an impoverished country. The donator and public should have oversight of all projects.

    Result might just be the creation of new wealth.

Read previous post:
To Save Social Security, Raise the Minimum Wage

We have at least twenty years to rebuild the Social Security trust fund. If we raise minimum wages now, we...