It is a well-known truism that the rich get richer and the poor get poorer, but sometimes, the rich just get so absurdly, substantively richer that those who are not them, the other 99 percent, pause to question.
Gone are the days when the lines of a saccharine hymn will qualm any feelings of bubbling rebellion, as in the notorious third verse of All Things Bright and Beautiful, with its call for social order; the rich man in his castle, the poor man at his gate. The general idea is that life should afford equal opportunity and equal rights to one and all.
The case in point here is Great Britain and it’s annual Sunday Times Rich List that was just published. Like most other Western nations, GB suffered greatly in the economic crisis of 2008, brought about, in large part, by greedy bankers. Back in the halcyon pre-crash days a wealthy person required “identifiable assets” of at least £80million to enter the hallowed ranks of the Sunday Times Rich List. This is the equivalent to the Forbes List in the US. This annual “guesstimate” of fortune (as it has no access to bank accounts) is an unofficial, but much perused, index of wealth. To get a spot in the top 500 in 2014, the rich need a staggering minimum of £190 million ($320m). This is a leap of thirty million from 2013.
To boil this down to a digestible (or indigestible) fact, this means that one-third of the UK’s Gross Domestic Product (GDP) is owned by a mere 1,000 astoundingly rich individuals. One whole third. There are 63 million people living in the United Kingdom.
Small wonder the person who compiles this list has said, “The richest people in England have had an astonishing year.” The combined wealth of the super-wealthy has gone up by an average 15.4% while inflation sits at 1.7 percent (and many are on wage freezes) and the Bank of England interest rate remains at an historically low 0.5 percent.
Just to pick a random example, TV chef Jamie Oliver and his wife Jools, have shot up £90million from last year to £240 million this year. They now come in at position 396 on the 500 list, having restaurants, cookbook sales and a children’s clothing range between them. The old, down-to-earth Jamie character might have thought this was “pukka” but apparently he regrets ever using that phrase now. As a couple, with their various companies, they create a lot of employment and opportunity but this is still a phenomenal rise in their personal income.
There was worrying talk towards the end of last year that Queen Elizabeth was possibly down to her last million, but this is refuted by the Rich List, which sees Her Majesty’s personal fortune of £330 million position her comfortably at 285. The corgis are not about to starve.
This is just the common or garden old millionaires. They are becoming two a penny. The real money now is with the billionaires. These guys have tripled in a decade. There are now 104 of them domiciled in the UK, the highest per head of population of any other country in the entire world. Seventy two of them live in London. Between them they are worth £310 billion.
Meanwhile, the ordinary working populace are estimated to be £1,600 a year worse off as a result of the cost of living crisis. It could almost be the template for Thomas Piketty’s argument in his best-selling book Capital in the Twenty First Century.
Piketty says that current economic circumstances have created a second “Belle Epoque” whereby the richest 1 percent in such countries as the US, UK and France have seen their fortunes dip and then rise again in a classic U shape, during the last century. When this happened at the end of the 19th century it became clear that change had to come.
The answer is redistribution. If the returns to capital keep growing faster than economies are growing, in other words, if the rich are getting disproportionately richer as they so clearly are, then inequality sets in at an unsustainable level. Piketty’s solution is a tax on wealth. He dismisses any suggestions that this will “destroy capitalism.” He does warn that something can and must be done though.
The Occupy movement have already drawn these matters to widespread public attention but opinions vary as to the efficacy of the overall campaign effort. The lack of “a plan” led to criticism that Occupy failed, however the huge original protests largely splintered off into neighborhood action groups that are still active. There is also an opinion that Bill de Blasio would not have become Mayor of New York without the consciousness raising of the inequality gap that Occupy created. In those ways, they were effective.
The Piketty book puts some real meat on the bones of this understanding, that the 1 percent and the 99 percent most certainly do exist, and continue to co-exist across an ever wider chasm. The top 1 percent can afford to take risks, and this gives them another advantage in wealth generation. The billionaires took 6.8 percent, on average, return on their investments between 1987 and 2013, whilst any ordinary saver would have struggled to make 2 percent.
The rich are getting remarkably richer. This is not just something to dismiss as an inevitable unfairness of life. It is a serious societal problem that will lead to further political and economic inequality worldwide, unless it is tackled.
By Kate Henderson