Top 100 Billionaires Could End World Poverty Tomorrow, Four Times Over

There has been great progress in the fight against extreme poverty. Hundreds of millions of people have seen their lives improve dramatically – an historically unprecedented achievement of which the world should be proud. But as we look to the next decade, and new development goals we need to define progress, we must demonstrate that we are also tackling inequality- and that means looking at not just the poorest but the richest . Oxfam believes that reducing inequality is a key part of fighting poverty and securing a sustainable future for all. 

Extreme wealth and inequality are reaching levels never before seen and are getting worse Over the last thirty years inequality has grown dramatically in many countries. In the US the share of national income going to the top 1% has doubled since 1980 from 10 to 20%. For the top 0.01% it has quadrupled  to levels never seen before. At a global level, the top 1% (60 million people), and particularly the even more select few in the top 0.01% (600,000 individuals – there are around 1200 billionaires in the world), the last thirty years has been an incredible feeding frenzy. 

Following the financial crisis, the process has accelerated, with the top 1% further  increasing their share of income. The luxury goods market has registered double digit growth every year since the crisis hit19. Whether it is a sports car or a super-yacht, caviar or champagne, there has never been a bigger demand for the most expensive luxuries.

The IMF has said that inequality is dangerous and divisive and could lead to civil unrest. Polling shows the public is increasingly concerned about growing inequality in many countries, and by people across the political spectrum.

Extreme wealth and inequality is economically inefficient.  A growing chorus of voices is pointing to the fact that whilst a certain level of inequality may benefit growth by rewarding risk takers and innovation, the levels of inequality now being seen are in fact economically damaging and inefficient. They limit the overall amount of growth, and at the same time mean that growth fails to benefit the majority. Consolidation of so much wealth and capital in so few hands is inefficient because it depresses demand, a point made famous by Henry Ford and more recently billionaire Nick Hanauer in his much-discussed TED talk.

There quite simply is a limit to how many luxury yachts a person could want or own. Wages in many countries have barely risen in real terms for many years, with the majority of the gains being to capital instead. If this money were instead more evenly spread across the population then it would give more people more spending power, which in turn would drive growth and drive down inequality. 

Extreme Wealth and Inequality is Politically Corrosive

If, in the words of the old adage ‘money equals power’ then more unequal societies represent a threat to meaningful democracy. This power can be exercised legally, with hundreds of millions spent each year in many countries on lobbying politicians, or illegitimately with money used to corrupt the political process and purchase democratic decision making. Joseph Stiglitz and others have pointed out the way in which financial liberalization led to huge power for the financial industry, which in turn has led to further liberalisation. In the UK the governing

Conservative party receives over half its donations from the financial services industry. Capture of politics by elites is also very prevalent in developing countries, leading to policies that benefit the richest few and not the poor majority, even in democracies.

Extreme Wealth and Inequality is Socially Divisive

Extreme wealth and inequality undermines societies. It leads to far less social mobility. If you are born poor in a very unequal society you are much more likely to end your life in poverty. As Richard Wilkinson, co- author of the Spirit Level, has said, the American dream is more real in Sweden than it ever has been in the United States. Social mobility has fallen rapidly in many countries as inequality has grown. 

Extreme Wealth and Inequality is Environmentally Destructive