Inequality is a big topic all over the world — in America it might be one of the biggest, simply because it’s going to frame the next two major election cycles (’14 and ’16) and the whole Baby Boomers vs. Millenials fight for a bigger share of the pie could be a generation-shifting paradigm. The World Economic Forum is starting in Davos right now — only 15 percent of the attendees are women! — and as such, there’s a lot of crazy statistics coming out regarding just how bad the inequality picture is in the world right now. Y’all bracing yourself for this? Here’s a couple of gems:
1. The 85 richest people in the world have as much as the 3.85 billion poorest people. I can’t even do that ratio.
2. The richest 1 percent of people in the world control 50 percent of all global wealth.
3. Only 3 in 10 people (i.e. 30 percent) live in a country where inequality hasn’t increased in the past 30 years. Phrased another way, 70 percent of those polled live somewhere that’s becoming less equal.
4. 95 percent of the post-U.S. crash wealth that has been generated has gone into the bank accounts of the wealthiest 1 percent.
All this stuff is sobering. This actually makes Marco Rubio’s new testing line — “an opportunity gap” — seem more legitimate, because the gap really isn’t in terms of money. Well, it is, but the problem is that in each of these cases when we’re talking about a top 1 percent or a top 5 percent or whatever it may be … those people probably have children, and their children ultimately inherent this wealth (because it’s hard to blow through billions in your existence), and it cycles on down the line — often without future generations really having to work. Institutional wealth controlling all the monies is bad for the generalized ethos of society — i.e. “I’m out here grinding for 70K per year, and that guy hasn’t done anything and lives in Fiji 3/4 of the year.” Well, yes, that’s (a) unfair and (b) probably not an exactly true situation. Institutional wealth is a concern of people like Warren Buffet, though, and when it’s on his radar, that’s probably a good thing (to an extent).
It’s nearly impossible to fix global inequality, although the two ‘silver linings’ are: (a) in every generation, there are stories of people who came from the 3.85 billion to the 85 richest, so theoretically, the ‘dream big’ model can still work, even if it’s quite literally a one in 3 billion chance, and (b) history shifts over time, so several generations down the line, it’s possible that Africa and South America will be the two most viable economic continents on Earth (I said ‘possible,’ not ‘probable,’ but I’d argue that ‘probable’ wouldn’t even be that far off). Within one given generation, inequality can look bad, but at a broader history-of-the-globe level, it evens out a bit.
So, what is Davos going to do about it? And how ironic is it that rich policy-makers head to a resort town to discuss this stuff?
The leaders at Davos claim inequality is a big issue this year, but the direct plans are a bit murky. It doesn’t seem like Davos will really discuss the ideas of Oxfam (who did that 85 vs. 3.85 billion study):
But don’t expect much support for any of Oxfam’s suggested remedies for inequality: that corporations should stop using offshore boltholes to avoid tax; that business leaders should support progressive taxation, universal provision of health and education, and a living wage in all the companies they control. The CEOs in Davos may be worried about the impact of inequality but they are not that worried, and not nearly as worried as they should be.
It seems as if they will talk about “more balanced growth access” globally, but as for how to execute it … again, plans are murky. I’ve obviously never been to Davos and probably will never go, but it seems like it’s a pretty typical conference experience, only with more famous people than normal: there’s seminars and talks and a lot of fancy comp’ed dinners and schmoozing. Whenever you get a ton of ‘kingmakers’ in the same place, there will be sales/marketing/consultant vultures galore looking for access. That’s just human nature.
I am not a tremendously smart person by any means, but it seems to me that logically, the only way to start to curb global inequality is as such: first off, stop worrying about it globally. Every country is different, just like every state in the U.S. is different, and one-size-fits-all policies are hard to enact. (On stuff like “Don’t kill each other,” no. On more nuanced stuff, yes.) It feels like the most logical way to bring the bottom up to the middle is through education — but not just more education. Rather, countries need to re-focus education around core skills (working together, problem solving, day-to-day life) and they need to find a way, in their budget structures, to make education broadly affordable (so that, in developed nations, students don’t exit the process with a ton of debt). The second tier would be health care. Keep people (a) learning, at a reasonable cost and (b) healthy, without having to pay $1,000 for a simple test and you’ll get closer to “equality.” You’ll never truly get there — some guy will always have a super-yacht or whatever — but at least the opportunity gap can close. That probably sounds pretty naive, but if you can get those two key aspects under cost control, I think the balance would shift a lot.