Global Wealth Inequality

Humanity isn’t poor. We’ve just been robbed of our collective inheritance.

When you look at an image like this, where 1% of the people have almost all of the wealth, a question quite naturally comes to mind:

Is THIS why it feels like there isn’t enough money to go around? Might it be the case that there is enough money but it is very unfairly distributed?

As the research director at for the last three years, I have gotten to learn a lot about wealth inequality and poverty. Our mission is to change the rules of the global financial system to bring poverty to an end and make it possible for humanity to transition to planetary sustainability. This is not a mission we take lightly either.

Image from user

When we create graphics like this one — showing that 300 people have the same aggregate wealth as 3 billion — it is important to ask ourselves if this is a feature of the system, not merely a fluke. What we find when we explore this possibility is that indeed it is true that the game has been rigged to serve financial elites. They made the system behave this way. Poverty and wealth inequality are there on purpose as natural consequences of the logic behind wealth accumulation.

One of the rules that creates this outcome is the use of tax havens to extract and hoard wealth. Thanks to excellent work at the Tax Justice Network, there are estimates for how much money is syphoned out of the real (traslation: productive) economy and squirreled away by the super rich.

Image from user

Note that number in the bottom of the image — $21 Trillion — is the low-ball estimate for how much money has been extracted from the world economy and hidden from view. Compare this to the size of the total economy and you will see why it feels like there isn’t enough.

Measured in GDP (gross domestic product) the global economy is approximately $73.48 trillion in absolute size. In other words a full one-third of the global economy has been stolen and hidden from view! No wonder it feels like there isn’t enough to go around. If money were blood it would feel as if two pints were gorging and pulsating in our big toe while the heart struggled to find enough to fuel our lungs, muscles and brains.

This metaphor — of money as circulation — is central to George Cooper’s account of what is wrong with our financial system. In his book Money, Blood and Revolution: How Darwin and the Doctor of Charles I Could Turn Economics Into A Science, Cooper explains how a circulatory model of global finance resolves many of the ideological problems of Neoclassical economic theory. It is an essential piece of the puzzle for understanding where poverty and inequality come from.

If we want to create a more equitable (and functional) world, we will need to keep money in circulation. When a major portion of it has been stolen away — I use that word intentionally because the elites use their money to shape policy outcomes (and steal wealth for themselves) so they can accumulate more wealth and power — there will not be money available for food, health care, education, employment, or any of the other things most people care about.

I have an idea floating around in my head that translates this despairing situation into one of hope. I asked myself one simple question: What if we somehow captured the tax haven money and taxed it at 10%, returning the revenue to national governments to fund social programs? With an estimated $21 trillion as the minimum amount in the global tax haven system, that would generate more than 2 TRILLION DOLLARS in funds for human security and the transition to sustainability.

Rather than say what I would do with that amount of money, I leave you to ponder this question yourself:

What would you do with $2 trillion to help humanity?

Would you invest in the clean energy revolution? Provide basic income for every living person on Earth? Offer free university education to all people? Eradicate disease? Restore the health of soils? Reforest the Amazon? There are just so many possibilities!

The money is there. It is rightfully ours to take (see here for why I make this strong claim on collective ownership). And we have the power to shine a light into the tax haven system with current digital technologies. What we lack is the will to do so.

With that in mind, I leave you to contemplate…