THE RISE OF THE OLIGARCHS
In a report published back in January and timed to coincide with the World Economic Forum in Davos in Switzerland, Oxfam calculated that the world’s eight richest billionaires control the same wealth between them as the poorest half of the globe’s population. Bill Gates has $426bn (£350bn), equivalent to the wealth of 3.6 billion people. Credit Suisse’s global wealth report published in November makes the same point: that the globe’s richest 1% own half the world’s wealth.
And they’re getting richer. Their share of the globe’s total wealth increased from 42.5% at the height of the 2008 financial crisis to 50.1% in 2017, or $140tn (£106tn). “The share of the top 1% has been on an upward path ever since [the crisis], passing the 2000 level in 2013 and achieving new peaks every year thereafter,” the annual report said.
Credit Suisse says that “global wealth inequality has certainly been high and rising in the post-crisis period”. And in September Campden Wealth and UBS said that three in four of the world’s super-rich families boosted their wealth in 2016. Thanks to booming stock markets and private equity deals only 4% of them lost money last year.
If you have the cash you can exploit crises, buying low and selling high. But they have other advantages too, as can be seen in the so-called Paradise Papers published in November. These revealed a huge range of offshore accounts and arrangements to minimise tax liabilities.
One must emphasise that almost all of these are entirely legal. Calmer heads have pointed out that (to take but one example) duty free sales are a tax avoidance scheme. Also, in some cases, perhaps many, those involved didn’t personally know their resources were involved. Actions had been taken on their behalf by investment firms or agents to whom they had entrusted accounts.
So the focus hasn’t been on the individuals themselves. Rather, it has been on three things. The first of these is those countries or territories where the most egregious cases are to be found. Change needs to come, and soon.
The second is the global regulatory morass that is so easily exploited by those with the real smarts in all this, the armies of accountants, advisers and tax consultants all of whom, of course, are extremely well paid for their troubles.
Finally, there’s the deeper question of personal and corporate morality. There’s a whole lot of need out there in the world and a more equitable division of spoils would go a long way to addressing it.