Each year the international charity, development and advocacy organisation Oxfam releases a report on global wealth and income inequalities. The reports are timed to be released just prior to the annual meeting of the World Economic Forum (WEF) in January at the Swiss ski resort of Davos (more on this shortly). Oxfam’s 2020 report is titled Time to care: Unpaid and underpaid care work and the global inequality crisis.
The key ‘take-aways’ of the report are captured in this graphic:
This report was released just as the wider global community began to comprehend that the emergence of a novel coronavirus in Wuhan in China had the potential to become a pandemic – the World Health Organization (WHO) declared a global public-health emergency on January 30, 2020. What this year’s report, and previous years reports reveal is that COVID-19 emerged from, and into, a world that is characterised by great wealth for a very few, and great poverty for very many. And an ever-widening gap in these inequalities.
In this post I want to make reference back to work that we did in the aftermath of the Global Financial Crisis – I referenced this work in an earlier blog post on Young people, the GFC, the Great Recession and Austerity: Lessons from our Recent Past.
Is Neo-Liberal Capitalism Eating Itself or Its Young?
In an Introduction to the edited collection titled Neo-Liberalism and Austerity: The Moral Economies of Young People’s Health and Well-being, we discussed in some detail the sorts of ongoing crises that have characterised capitalism in many of the over-developed economies of the EU/OECD in the period since the GFC. And the ways in which in these crises the interests of capital accumulation Trump the interests of those who work to earn a living, or those who have to rely on various forms of government income support.
Aditya Chakrabortty is the senior economics commentator for The Guardian (UK) newspaper. Since 2008–2009 he has constructed a long CV of stories that have critically examined the GFC, the Great Recession, the UK and European Union (EU) austerity policies and the array of social, cultural and political consequences of neo-Liberal capitalism’s illusory attempts to manage its multiple, self-inflicted, on-going crises.
As the WEF convened at Davos in 2016, Chakrabortty wrote an article which suggested that We’ve been conned by the rich predators of Davos. The predatory metaphor seems particularly apt here. Much of Chakrabortty’s account referenced Oxfam’s 2016 report on global wealth inequalities, inequalities that had widened significantly in the wake of the GFC – see the point above. As Chakrabortty observes:
(…) in the five years since the world recession, the very richest have grown inexorably wealthier (…) every worker on a pay freeze and every family seeing their benefits cut knows’ that this massive increase in the wealth of the very few has not occurred because economies are booming, or are experiencing growth rates that result in wealth increases across the board. Rather, it is ‘because we are living in a period of trickle-up economics, in which the middle- and working-classes have handed over money to those right at the very top.
For Chakrabortty, reports such as Oxfam’s, and much of the critique from both the left and the right about growing inequality, largely miss the point if they focus too heavily on the use of tax havens to avoid paying tax, or the situation in which the likes of Google, Apple and Amazon are able to negotiate with finance ministers in various jurisdictions about how much corporate tax that they deem it appropriate to pay (a luxury denied wage and salary earners who are subject to legislated pay-as-you-go tax scales/regimes).
As bad as these tax practices and regimes may seem if we are concerned with the consequences of increased inequality, Chakrabortty insists that the story of growing inequality in the period since the GFC is one that is much more profoundly characterised by the roles of central banks around the world in printing massive amounts of money in the name of Quantitative Easing (QE).
Around the globe, trillions of dollars have been pumped by central banks – not into public work programmes, infrastructure projects, bridging technologies into a post-carbon future, health infrastructure, or investments in education, training and employment initiatives that might promise some hope, some cause for optimism among the world’s tens of millions of unemployed, underemployed and precariously employed young people – but into the inflation of asset prices. Assets are, by definition, held by the wealthy. In that article, Chakrabortty references various sources which indicate, among other things that:
(…) in the period 2009–2012 the Bank of England’s £375 billion QE programme had inflated the value of shares and bonds by £600 billion, and that 40 % of these gains had gone to increase the wealth of the top 5% of UK households.
In the same period, according to Emmanuel Saez, a UC Berkeley Professor of Economics, and the Director of the Center for Equitable Growth:
the wealthiest 1% of US households took 91 cents of each dollar in new wealth generated, while the 99% had to share the remaining 9 cents.
It is little ‘wonder’, according to Chakrabortty, that Stanley Druckenmiller, the billionaire hedge fund manager, has labelled QE:
‘The biggest redistribution of wealth from the middle-class and the poor to the rich ever’.
This is the economic model, the global economy, and community of nations, into which COVID-19 has emerged. This is the historical evidence that we have as to how crises are managed in the interests of capital and wealth holders.
This is the economic model that has created massive inequalities, the economic model in which hundreds of millions of people, billions even, are effectively surplus to requirements.
Zygmunt Bauman, the influential sociologist of liquid modernity who passed away in early 2017, argued that at the start of the 21st century large numbers of people around the globe – hundreds of millions, in fact – are surplus to requirements, are, indeed, redundant. In Wasted Lives: Modernity and its Outcasts, Bauman suggested that:
‘To be “redundant” means to be supernumerary, unneeded, of no use – whatever the needs and uses are that set the standard of usefulness and indispensability. The others do not need you; they can do as well, and better, without you.’
To be ‘redundant suggests that there is no ‘self evident reason for your being around and no obvious justification for your claim to have the right to stay around. To be declared redundant means to have been disposed of because of being disposable – just like the empty and non-refundable plastic bottle or once-used syringe, an unattractive commodity with no buyers…’
It is in this sense – and in the light of the work of organisations such as Oxfam, commentators such as Chakrabortty, and in the work of groups and think-tanks such as the World Inequality Lab – that it seems obscene to suggest that once the initial public health dimensions of COVID-19 have been mitigated, have been bought under some degree of control, that things should return to business-as-usual!
That is not a present, or future, that is sustainable, or is worthy of us in terms of what current generations bequeath future generations.