As the World Economic Forum in Davos continues one of the themes under discussion is the distribution of wealth.
A report published just prior to the start of the forum by Oxfam contained the remarkable news that the richest 85 people in the world have the same amount of wealth as the poorest 50% of the entire world’s population.
According to the report seven out of ten people live in countries where economic inequality has increased in the last 30 years. As well, the richest 1% increased their share of income in 24 out of 26 countries for which there is data between 1980 and 2012.
“Extreme economic inequality is damaging and worrying for many reasons: it is morally questionable; it can have negative impacts on economic growth and poverty reduction; and it can multiply social problems,” the report stated.
It is not all bad news, as Oxfam pointed out that during the last decade, countries in Latin America have reduced the level of economic inequality.
Oxfam made an appeal to the world’s economic and political leaders gathered in Davos to take concrete measures to ensure a more equal distribution of wealth.
It is not just a problem limited to the United States, which is often singled out for unequal wealth distribution. In Europe, for example, the combined wealth of the 10 richest people exceeds the total cost of stimulus measures implemented across the European Union between 2008 and 2010 (€217bn compared with €200bn), according to the report
Oxfam also commented that the austerity policies are having a disproportionate impact on the poorer people and the middle class.
Assets and tax
The report referred to data from Credit Suisse, according to which 10% of the global population holds 86% of all the assets in the world.
One major issue is that of tax evasion. Oxfam said that according to its data the amount held in offshore tax havens equals the entire annual GDP of the United States.
According to the “Outlook on the Global Agenda 2014,” published late last year by the World Economic Forum, the second of the top 10 trends for this year is widening income disparities.
Finding solutions to this is not easy. Simplistic policies based on higher taxes for rich people or a state-directed economy have proven to be complete failures.
Pope Francis is, of course, well known for his concern regarding the poor. In his message to the World Economic Forum in Davos, he acknowledged the substantial contribution made to human progress by the business community.
He also noted that the successes of this business activity have reduced poverty for many people. At the same time, he added, there are still many who experience economic insecurity.
“It is intolerable that thousands of people continue to die every day from hunger, even though substantial quantities of food are available, and often simply wasted,” said Pope Francis.
He invited both politicians and those in business to find solutions to this problem. “In fact, those who have demonstrated their aptitude for being innovative and for improving the lives of many people by their ingenuity and professional expertise can further contribute by putting their skills at the service of those who are still living in dire poverty.”
The Pope called for an openness to a transcendent vision of the person – quoting Benedict XVI – and also processes that will lead to a better distribution of wealth.
The international business community, he commented, has many people who are motivated by high ideals and who have a genuine concern for others. “I urge you to draw upon these great human and moral resources and to take up this challenge with determination and far-sightedness,” he said.
“Without ignoring, naturally, the specific scientific and professional requirements of every context, I ask you to ensure that humanity is served by wealth and not ruled by it,” he said.
The positive contribution made by business and the market economy was also highlighted in an essay published by Bill and Melinda Gates in the Jan. 21 edition of the Australian newspaper.
Poor countries are not doomed to stay poor, they affirmed. Since 1960, China’s real income per person has gone up eightfold and India’s has quadrupled, while Brazil’s has almost quintupled, they explained.
While there are still many challenges in Africa they observed that income per person has increased by two-thirds since 1998.
By 2035, they predicted, “there will be almost no poor countries left in the world.”
A goal that will face numerous difficulties and requires not only sound economic and political decisions, but, as Pope Francis said, an openness to the transcendent. In his Apostolic Exhortation, the Joy of the Gospel, the Pope said:
“Whenever our interior life becomes caught up in its own interests and concerns, there is no longer room for others, no place for the poor. God’s voice is no longer heard, the quiet joy of his love is no longer felt, and the desire to do good fades.”