At the annual retreat of our global elites, the world’s wealthy wring their hands over the widening inequality they so relentlessly widen.
By Sam Pizzigati
Every January our global corporate and financial executive superstars, accompanied by assorted heads of state and deep thinkers, make the trek up the Alps to the Swiss village of Davos. They don’t come to party, though they do their share of imbibing. They come instead to “solve” the world’s problems.
Through five days of workshops and lectures, these swells discuss and debate. Hundreds of reporters intently track their deliberations. The whole world listens.
The irony in all this problem solving? The world faces no greater problem than the concentrated wealth and power the men of Davos hold in their hands and stuff in their pockets, an irony never more obvious than at this year’s edition of the annual Davos “World Economic Forum.”
This year’s Davos confab opened last Wednesday just after the release of a Davos 700-expert survey that named our world’s “chronic gap” between rich and poor the risk “most likely to cause serious damage globally” in the decade ahead.[pullquote]The world’s richest 85 people now hold as much wealth as the entire bottom half of the world’s population.[/pullquote]
What to do about this inequality? Two reports on the eve of Davos — one from the respected global anti-poverty agency Oxfam, the other from a top corporate consulting group — pointed to some suggestions. The 2,500 conferees at Davos ignored both reports. For good reason. At Davos, they don’t do introspection.
Some introspection just might be in order, Oxfam made plain in its contribution to the Davos dialogue. The world’s richest 85 people now hold as much wealth, the new Oxfam Working for the Few report points out, as the entire bottom half of the world’s population combined, 3.5 billion people in all.
Today’s current “extreme levels of wealth concentration,” the Oxfam study adds, “threaten to exclude hundreds of millions of people from realizing the benefits of their talents and hard work.”
Our world would be a significantly better place, Working for the Few continues, if our most extravagantly affluent simply stopped dodging their taxes, a move that could end the budget austerity now crushing the world’s poor and middle-class alike.[pullquote]Davos 2014 saw no groundswell for closing tax havens.[/pullquote]
Oxfam researchers put the total wealth now sitting in offshore tax havens at $18.5 trillion. By comparison, they point out, the annual gross domestic product of the United States, the world’s richest nation, only amounts to $15.8 trillion.
These striking Oxfam stats would generate no groundswell at Davos 2014 for closing tax havens. In fact, the high-tech lobby group that includes Google, Amazon, and Apple spent the week before Davos insisting that the G20 group of developed nations not shut the “Double Irish” loophole, a slick accounting maneuver that saves tech giants billions of dollars year after year in taxes.
Oxfam’s Working for the Few study also suggests that the corporations the Davos elite run — the World Economic Forum has 100 corporate “strategic partners” — might want to consider paying their workers more. Wages are stagnating, Oxfam notes, as “stocks and corporate profits soar to new heights.”
Corporate CEOs, a new Deloitte consultancy group report detailed last week, certainly have the cash on hand to end wage stagnation. The current corporate squeeze on worker wages has the world’s largest corporations now sitting on a stash of cash some $2.8 trillion high.
Apple alone has nearly $150 billion sloshing around in its corporate accounts.
In the fairy-tale world of rich people-friendly politicians, corporate surpluses this stunning supposedly make economies stronger. These surpluses give corporate CEOs the wherewithal to invest in good new jobs, or so the story goes.[pullquote]The United States once had political leaders who dared call for both special taxes on undistributed corporate profits.[/pullquote]
But good jobs remain in short supply, especially in the United States. CEOs simply aren’t investing in their workforces or research or anything that builds prosperity for the long haul, as Google exec Eric Schmidt acknowledged in one rare revealing moment at this year’s Davos deliberations.
What are CEOs doing with their surplus cash? They’re speculating and pumping billions into mergers that typically inflate executive pay — and eliminate jobs.
Back in FDR’s day, the United States had political leaders who dared call for both special taxes on undistributed corporate profits and higher tax rates on the nation’s plushest individual incomes. These political leaders didn’t just magically appear on the 1930s scene. They rode in on a wave of public protest.
The world’s elites who gather at Davos fear yet another wave. No other reason better explains why they’re now so ostentatiously discussing inequality. “Message: We care,” as George H. W. Bush once put it.
Labor journalist Sam Pizzigati, an Institute for Policy Studies associate fellow, writes widely about inequality. His latest book: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970.