If I go into a restaurant and order five meals when I only intend to eat one, that would be recognised as wasteful. If I bought five tins of paint when I only needed one, I’d be wasting my money. We understand waste at the micro level. Why do these rules not apply at the macro level?
I ask because Oxfam’s latest inequality report, timed as usual for the World Economic Forum, shows how wasteful the global economy is. It reliably delivers more for those who already have plenty.
Here’s the headline graphic from the report. It shows the distribution of the new wealth that was generated in 2020 and 2021.
As the graph shows, 63% of new wealth went to the top 1%. You don’t have to be massively wealthy to be in the top 1%, but even that 1% share is skewed towards the very richest. Billionaire wealth increased dramatically.
The rest of the top ten percent did alright. The other 90% get diminishing shares, and if you look closely you’ll see that the poorest 10% went backwards. Those who most need the increase, for whom more is a matter of life and death, are failed by the global economy. Those who have more than they can ever realistically spend, and for whom more is pretty much meaningless, reap further abundance.
Defenders of capitalism have their arguments for why it must be so, naturally, and can only ever be so. But there are alternatives (and I don’t mean Communism, before you fly to the comments section). My book with Katherine Trebeck, The Economics of Arrival, is all about how to create a more inclusive economy, one that recognises the possibility of enough.
And really, the injustice is so extreme at the moment. Those capitalist arguments for the status quo ring more hollow with every passing year. I have no idea how close it may be, but I am confident that the time will come when the wastefulness and futility of global capitalism will be seen for what it is.
- For more, see the Oxfam report Survival of the Richest.