Gargantuan Gap Between Super-Rich and Poor Defines the Economic System

It may sound like a cliché to say that the poor are getting poorer, while the minuscule rich are accruing all the wealth, obviously at the expense of the poor. But if one wants to tell a spade a spade, then this fact has to be uttered over and over again, no matter how banal it may sound to some.

Take the latest Oxfam report, named “Takers Not Makers: The Unjust Poverty and Unearned Wealth of Colonial Inheritance”, which was published on the first day of the WEF (World Economic Forum) annual meeting every year. The WEF annual meeting at Davos is a boisterous show of the world’s richest at Davos, the ski resort town in Switzerland. 

Does the title of the Oxfam report bell a ring? Well, it is implicative that the world’s richest of the riches are growing at a fast pace that results in further widening of the gap between the rich and the poor. Moreover, the title also hints that colonial inheritance may fuel the process, as Amitabh Behar, the Executive Director of Oxfam International writes—“I am convinced, now more than ever, that the root cause lies in the grotesque inequality of our rigged economic system – a system deliberately designed to enrich a wealthy elite, at the expense of ordinary people.” Let’s see what the Oxfam analysis tells us.

First, Billionaire wealth across the globe surged by $2 trillion in 2024 to $15 trillion at a rate three times faster than the previous year. The huge jump in the billionaire wealth, contrastingly, is seen with the number of people living in poverty nearly unchanged since 1990.

The year 2024 saw an addition of 204 new billionaires, which is equivalent to an average of nearly four every week. Asia got 41 new billionaires this year. Asia also saw an increase in the wealth of billionaires by $299 billion in 2024. Oxfam also predicted that there will be at least five trillionaires within a decade from now.

That is not all, the real scenario is depicted in the fact that the richest 1% in the Global North (developed countries) extracted $30 million an hour from the Global South through the financial systems in 2023. This is atrocious! The richest 1% means a few people across the globe that can be counted in the fingers that accumulate huge wealth plunging a large section of the global population into the mires of poverty.

Billionaire Wealth Unmerited

The Oxfam report reveals a stunning fact of the inheritance of wealth. It says that over 60% of the billionaire's wealth is now derived from inheritance and monopoly power or crony connections. This puts the fact in front of all of us—that extreme wealth is largely unmerited putting the common perception that “one becomes rich by hard work and talent” in shambles. 

The year 2024, for the first time, saw a rise in billionaires minted through the process of inheritance rather than entrepreneurship. Every billionaire under the age of 30 inherited their wealth. In a decade now, in the words of Amitabh Behar, “trillions will be handed down to heirs, much of it largely untaxed, creating a new Downton Abbey era for the 21st century. That is not good for our economy, democracy, or for our collective future.” Almost 36% of billionaire wealth is now inherited. 

In addition to inheritance, what accounts for the increase in wealth of a few in the world is monopoly power and crony connections to governments, which accelerates the growing inequality. Monopolistic corporations have tremendous control over the markets, they can also set terms and prices with impunity, which pave the path for enriching their billionaire owners. Cronyism and corruption are entangled to allow the super-rich ensuring government to work for them, not for ordinary people.

“Many of the super-rich, particularly in Europe, owe part of their wealth to historical colonialism and the exploitation of poorer countries," Oxfam said.

Coining the term ‘Modern Colonialism’, Oxfam said that vast sums of money still flow from the Global South to countries in the Global North and their richest citizens. 

Oxfam suggests governments across the world to put heavy taxes on the richest to reduce inequality. In addition, the rights group also advocates that former colonial powers must be put into boards to address the harm they have done to colonized countries with reparations.

The Oxfam report also reveals that billionaire's wealth grew in 2024 at a staggering average of $5.7 billion a day, while the number of billionaires rose to 2,769, from 2,565 in 2023.

The wealth of the world's ten richest men grew at such a scale that “even if they lost 99 per cent of their wealth overnight, they would remain billionaires.” Their wealth grew by almost $100 million a day. 

Remember, any Oxfam report is based on real data and their analysis. It is in no way rhetoric or something having a political overtone. It has brought out the reality. Should we still think that talking about the rich-poor gap and the economic system that fuels it is a cliché? Remember, this affects the lives of all of us.