UBS has pointed out that in these terrible economic times the wealth of billionaires has risen. Varied are using this to climb their favoured hobby horse as of course we would expect them to. And why should we be left out? We here taking this to be evidence that capitalism is working just fine.
A slightly different Credit Suisse report states that global wealth in 2019 was around $360 trillion. The claim here from UBS is that the billionaires have about $10 trillion of that. Sounds fair enough to us. Peeps at top of a distribution have 2% of that distribution. Shrug.
But hobby horses:
Luke Hilyard, executive director of the High Pay Centre, a thinktank that focuses on excessive pay, said the “extreme wealth concentration is an ugly phenomenon from a moral perspective, but it’s also economically and socially destructive”.
“Billionaire wealth equates to a fortune almost impossible to spend over multiple lifetimes of absolute luxury,” Hilyard said. “Anyone accumulating riches on this scale could easily afford to raise the pay of the employees who generate their wealth, or contribute a great deal more in taxes to support vital public services, while remaining very well rewarded for whatever successes they’ve achieved.
“The findings from the UBS report showing that the super-rich are getting even richer are a sign that capitalism isn’t working as it should.”
Quite why someone employed to whimper about pay should be interested in this is unclear. People not, generally, becoming billionaires through their pay. It’s also a little odd, the complaint. Generally the complaint from points left is that capitalism is the system by which the oppressors extract surplus value from the labours of the workers. If there’s some group of a couple of thousand people with $10 trillion between them this sounds like a pretty good outcome for a system designed to do that expropriation.
What Hilyard means of course is that other people have that cash and he doesn’t. He doesn’t even get a look in through the political system as it’s not being paid in tax – diddums, eh?
Our actual proof that capitalism really is working well, without the above archness and tongue in cheek, is the following:
However, fortunes are polarising among the world’s elite as the biggest gains were made among billionaires entrepreneurs in technology, healthcare and industrial sectors – a trend accelerated by the virus.
The UBS figures showed that during 2018 and 2019 and the first seven months of 2020, technology billionaires’ total wealth jumped by 42pc to $1.8 trillion, supported by surging tech shares as white-collar workers across the world depend on tools like Zoom for home working.
A surge in online shopping during lockdowns also boosted the fortune of Bezos – the world’s richest man– as Amazon’s shares soared 65pc this year and added $70bn to the value of his stake.
Billionaires in healthcare also saw their total wealth jump by more than half to $658bn, boosted by drug discoveries and new medical technology, as well as the demand for Covid-19 treatments and equipment across the world.
The people who produce the things that aid us through a global calamity make out like bandits.
These two sectors far outstripped the 19.1pc rise seen by the billionaire class as a whole since the beginning of 2018, while industrial firms also performed strongly as markets priced in a V-shaped economic recovery.
Among the laggards were real estate tycoons who saw a smaller 13.1pc rise amid doubts over future demand for offices following the pandemic.
The report noted: “Those that are the innovators and the disruptors, the architects of creative destruction in the economy, are still increasing their wealth. Other billionaires, on the wrong side of economic, technological, societal and environmental trends are becoming less wealthy.”
The people resting idle upon old technologies, the rentier classes, they’re losing money.
And what would we like in a society? That there is the incentive to get off the arse and innovate, right? What is our system currently doing? Ah, well then, it’s working just fine, isn’t it?
One further point. We do not allow billionaires – allow in the sense of not ban, or tax into oblivion – on the grounds of just rewards, righteousness or even fair play. It’s a purely pragmatic calculation. We out here gain vastly from technological advance and innovation. We consumers gain perhaps 95 to 97% of the total value of such new things, the entrepreneurs themselves some 3% according to the Nobel Laureate William Nordhaus. This is a hell of a bargain for us out here which is why we want it to continue.
We leave the current generation of billionaires be so that the next is encouraged to make the effort. Again, something that shows capitalism is working just fine. Even for Mr. Hilyard who is, I am absolutely certain, in the top 1% of global income earners and probably also the top 1% of wealth holders for a job whining about how rich the system makes him.