Alex Lo
SCMP Columnist
My Take
by Alex Lo
My Take
by Alex Lo

Why extreme wealth should be a crime

  • A new study by Oxfam finds that a billionaire is minted every 30 hours globally during the ongoing Covid-19 pandemic while a million people will fall into extreme poverty every 33 hours this year

George Santayana got it all wrong. People who have learned from history to avoid repeating past mistakes often find new ways to make worse ones.

And so, here we are, stuck with an international monetary system that always has the back of the biggest corporations and multibillionaires, at the slightest sign of an economic crisis and at the expense of most people.

No one, therefore, should be surprised by a new study by Oxfam, which found that a billionaire was minted every 30 hours during the ongoing Covid-19 pandemic.

The combined wealth of billionaires worldwide is equivalent to 13.9 per cent of global gross domestic product.

In contrast, 263 million more people are expected to fall into extreme poverty globally this year, at a rate of a million people every 33 hours.

None of this is new, other than the latest figures. The only reason the study attracted attention was because it was deliberately timed to coincide with the annual World Economic Forum in Davos, Switzerland, that is, the forum for those very same rich and powerful people.

How did we get here? No doubt it’s very, very complicated. But one main reason is surely the takeaway consensus lesson that the most influential economists and most powerful policymakers in recent generations have learned from the Great Depression: firefight with all you’ve got, don’t let a crisis burn itself out.

Flood the markets with massive liquidity, rather than drying them up. Always bail out “the too big to fail” companies, which are usually the guilty ones in a financial crisis, while letting small firms and workers be collateral damage.

Save the capital markets, though not necessarily the economy; Wall Street, not Main Street.

Coronavirus: New billionaire every 30 hours during pandemic, Oxfam analysis

In this context, the now-famous equation of French economist Thomas Piketty is even more infuriating: “r > g” where “r” is the rate of return on capital and “g” is the rate of growth in the economy.

Thanks to the world’s most powerful central bankers, every crisis is now another opportunity for those with capital to amass more wealth. But if you live on wages or savings, you are on your own.

Is there a way out? Piketty has long proposed the only real solution but it won’t happen: progressive tax on the merely rich to the super-rich that’s up to 90 per cent. Of course, the rich and powerful will never let that happen.

They would rather watch your children starve.