There is a cold wind blowing from the pandemic front and it is the wealth windfall greatly benefiting the 1.1 per cent of the global population of 7 billion.
Assoc Editor Vikram Khanna has written a sobering article about what this weath windfall means to the world at large.
First, he clarifies that this is not about income inequality. Not about monthly or yearly salary differences that pricks the heart of equality. The stab is the “inequalities in wealth”, that is, “the value of financial and real assets that people own, less their liabilities.”
Second, Vikram cited real world stats and it is an eye opener. Now, we all know about how the income/wealth gap is increasing but here are the meat in percentage terms to add to our dry bone of contention.
“It estimated that 56.1 million individuals (1.1 per cent of the adult population) each had assets worth more than US$1 million at the end of last year. Their total wealth was US$191.6 trillion.”(Credit Suisse reports last month).
Put a mental note on 1.1 percent, accumulated total wealth of US$191.6 trillion, with more than US$1 million. Now, how does the rest compare?
“By comparison, 2.9 billion individuals - 55 per cent of all adults in the world - each had wealth below US$10,000. Their total wealth was US$5.5 trillion.”
Vikram concludes: “In other words, the top 1.1 per cent, which holds almost half of all the wealth in the world, had about 35 times the wealth of the bottom 55 per cent.”
That’s not all. Let’s granularise it.
Singapore, amongst other economically advanced economies like UK, Belgium and Canada, suffered high GDP losses of 7.1%, yet the “high wealth gains averaging 7.7 percent, net of exchange rate consideration.”
And this is what they mean when they say, the rich are getting richer, or the wealthy has gotten wealthier.
As for our endearing billionaires, their net wealth has soared 55%, from US$2.95 trillion to US$4.56 trillion.
The cause?
Well, according to reports, it’s governmental policies, reacting indiscriminately to the pandemic crisis, by flooding the economy with money, which the wealthy immediately capitalises. Vikram puts it this way: -
“The US Federal Reserve and other major central banks slashed interest rates and expanded their asset purchases, flooding the markets with liquidity. Huge fiscal expansions followed. This led to stock market rallies, particularly in the US, where the Standard & Poor's index jumped 16 per cent, with most of the gain concentrated in technology stocks.”
This is what it means by the catchphrase “winners take all, and losers, well, they suck it up.”
The article also goes on to talk about the recent global wealth tax of 15%, with its many drawbacks, and a novel and audacious proposal to tax on companies’ stock at 0.2%.
They make for a very interesting read and you can read it when you are free. But I’d leave all that for a condensed lesson about the larger scheme of things.
Lesson. Admittedly, it is hard not to envy the wealthy and famous. In a world where whatever they do comes to your screen at a touch of a button, you will need to be shanghai’ed away into an hermitage in some faraway land to remain oblivious about their heavily advertised opulence and extravagant lifestyles.
Imagine this, and as Vikram puts it, “as the wealthy got wealthier during the pandemic, hundreds of millions of middle class and the poor got poorer, having lost their jobs and livelihoods, or were furloughed. The World Bank and other multilateral agencies estimate that at least 100 million people either remained poor or were pushed into poverty last year. During the worst of the pandemic, the vast majority of the world's workforce that could not work remotely had the stark choice of either staying at home and earning nothing or going out to work and putting their lives at risk.”
Well, I have been telling myself about contentment, and that is still relevant, if not more so, but at some point, I will be forced to think not just about the wealth gap, but the humanity gap, that is, with so much wealth in their hands, are we then no different from the time of kings and princes, aristocrats and barons in the feudal states between the 9th and 15th centuries?
Aren’t we then back full circle with the ironic aid of meritocracy, meant initially for the common good, with a big push from the advancement of enlightened knowledge and civilization?
Question is, if meritocracy, like democracy, is the best flawed system amongst the worst, and the issue is about how to improve it, rather than eradicating it completely, are we catching a glimpse of an evolving or fully evolved system where the one (that is, 1.1%) who directly or indirectly pays the piper (Govt) calls the shot (policy decisions)?
Another way of putting it is this - “We can have a democratic society or we can have the concentration of great wealth in the hands of a few. We cannot have both” (Supreme Court Justice Louis Brandeis).
And I think we cannot have both because anything that concentrates changes the character of that thing. The concentration of great wealth in the hands of the 1.1% threatens to not only deeply divide society, but elevates the handful to godlike status.
I suspect there is a foreboding dehumanising effect on the handful, not all though, as the advancement and protection of their immense wealth takes on a possessive and an obsessive hold. Of course, the other 55% (or more) is not immune from such stranglehold arising from sheer deprivation and envy.
And that is the main perplexing issue when the gap grows beyond the well-intended resolve of policy maker to close it. That widening gap therefore worsens the desperation on both sides, thereby resulting in a crisis on a whole new humanity scale.
And taking a page of wisdom from Einstein who said, “We can't solve problems by using the same kind of thinking we used when we created them,” maybe there’s a parallel here for our meritocratic system. For we can’t solve problems from within the system that created it in the first place.
And this may be because the political will to change is often drowned out by the power of money and its influence. Or, maybe those seeking to defend their wealth and position are using the meritocratic system to lull us into accepting or resigning to the matrix-like reality that there is really no other way except the one we have been living in, and we should all just suck it up and make the best of a far-from-ideal situation. And on a wing and a prayer, maybe things might just improve and get rosier in the distant future?
Mm...food for thought?
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