The Davos Club: Meet the people who gave us a world in which 62 people own as much as 3.6 billion

The global elite held its annual World Economic Forum meeting in the Swiss Alpine resort of Davos this year under the shadow of an Oxfam International report which reveals a shocking level of growing global inequality. Vijay Prashad comments.

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GLOBAL elites meet in the remote Swiss town of Davos each year for the World Economic Forum. The conclave began in 1971, but it became an essential destination in the 1990s. When globalisation became the buzzword, Davos became its headquarters. Big business, politics and the media meet, exchange business cards and go away better connected to each other. Deals are sometimes struck, but more than anything harmony among the world's elite is established. This is what the Davos summit is intended to do, to create a Davos civilisation for the important people of the planet.

Each year, before the summit, Oxfam International publishes a report on global wealth. This year's report (see following article) came out with some shocking news. In 2010, 388 individuals owned as much wealth as half the world's people, around 3.6 billion people. The obscenity then was dramatic. Last year, the number fell to 80 human beings who own as much as 3.6 billion people. This was getting to be too much.

The data this year is even more shocking. Only 62 people own as much as 3.6 billion people. Sixty-two! Inequality has been on a steady march forward.

It is very likely that these 62 people or their representatives were at Davos. They are the core of Davos civilisation. Champagne corks will pop, caviar will drip to the floor; the wealthy have much to celebrate. Even the slowdown in China will not slow them down. The 62 make as much money in the bear market as in the bull market.

What will the 62 discuss at Davos? The theme for this year is how to 'master the fourth industrial revolution'. What is the fourth industrial revolution? The first industrial revolution is seen as the move from human power to machine power in the early 19th century. By the late 19th century, science had been harnessed by industry to produce the technological or second industrial revolution. Into the mid-20th century, computers made their appearance and opened up the digital or third industrial revolution. The fourth one is about robots and mechanisation - the displacement of workers by machines.

The 62 want to figure out how to master the new revolution. Swiss bank UBS did a study of the economic impact of the fourth industrial revolution. It released its report just before Davos opened. The report suggests that those who are already wealthy and own property are likely to gain from the fourth industrial revolution. They will 'benefit from holding more of the assets whose value will be boosted by the fourth industrial revolution', wrote the analysts from UBS.

So, the tendency to mechanisation will increase inequality, not decrease it. This theme itself was sugar in the cup for the 62. They will get richer. The poor will get poorer. That is what the analysts of the rich say.

The Davos people talk about poverty and pledge money to charity. But this is just the spare change that sits idly on their bedside tables. Talk of charity merely makes the rich feel less uneasy about their hardened morals. They are on tax strike. They refuse to put their share of wealth into the state's hands to deliver social programmes. That is anathema. Their horizon for liberalism is their miserable charity, which of course is not entirely charitable: the cheque comes with a large signpost that tells the world they are the ones who have donated the money.

The poor worry the 62. If you produce a world where the bulk of the population live in wretched conditions, they will certainly not be happy and could even get angry. If they get angry, they might rebel in ways that are not easy to control. When the slums rise up, what do the rich do? Charity is not going to hold that flood back. Which is why the rich invest in gated communities and security to protect them, as well as security to encage entire countries that live in the belt of poverty. Which is why the world's largest employer is the US Department of Defence, with 3.2 million people on its staff.

It is also no wonder that the third largest private employer in the world is the security firm G4S. It follows Walmart and Foxxconn; Foxxconn uses Chinese labour to make cheap products, which are sold to indebted American consumers at Walmart. When there is any unrest among either the workers or the indebted consumers, G4S arrives to calm things down or to take someone to prison. G4S is growing like wildfire.

What is the refugee crisis in the West, other than a crisis of Davos civilisation? When you don't allow people to build safe and productive lives in their own lands, they will flee for other places. They will come to your homes and ask to live like you. But what they find is that even in the West, there are islands of affluence and vast oceans of misery. Refugees flee military conflicts and aerial bombardment to arrive in places where the police resemble the military and where drones have begun to fly overhead as well. They will meet the workforce of G4S, whom they also met in their home countries. One of the topics in Davos is the use of robots in the military and policing. The days of Robocop are not far off. The 62 can trust a machine far more than they can trust a police officer, who in class terms shares more with the slum dweller than with the 62.

The Davos 62 would like to believe that terrorism and rogue states are ancient problems that can be solved by a steady dose of capitalism. They would like to imagine that what people in Iraq and Syria or North Korea most want is a mall and a credit card. But it is precisely the civilisation of malls and credit cards that reproduces inequality, forcing ordinary people to go into debt so they can buy an endless chain of commodities that were produced with pitiful wages. When debt drives them to distraction, they are disaffected, disillusioned, in search of an alternative. Because the left is weak, that alternative has frequently been in the demagogy of religious politics or ethnic politics. And because the rhetoric of religious and ethnic politics is undisciplined, the strategy slips hastily into violence.

Terrorism is not produced by ancient animosities, but by the social conditions of our present, the Davos civilisation that gives the world's wealth to the 62 and denies it from the 3.6 billion. - AlterNet                                              

Vijay Prashad is Director of International Studies at Trinity College, Connecticut, USA.

62 people own the same as half the world - Oxfam RUNAWAY inequality has created a world where 62 people own as much as the poorest half of the world's population, according to an Oxfam report published on 18 January, ahead of the annual gathering of the world's financial and political elites in Davos. This number has fallen dramatically from 388 as recently as 2010 and 80 last year. 'An Economy for the 1%' shows that the wealth of the poorest half of the world's population - that's 3.6 billion people - has fallen by a trillion dollars since 2010. This 38% drop has occurred despite the global population increasing by around 400 million people during that period. Meanwhile the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76 trillion. Just nine of the 62 are women. Although world leaders have increasingly talked about the need to tackle inequality, the gap between the richest and the rest has widened dramatically in the past 12 months. Oxfam's prediction - made ahead of last year's Davos World Economic Forum (WEF) meeting - that the 1% would soon own more than the rest of us by 2016, actually came true in 2015, a year early. Oxfam is calling for urgent action to tackle the inequality crisis and reverse the dramatic fall in wealth of the poorest half of the world. It is urging world leaders to adopt a three-pronged approach - cracking down on tax dodging, increased investment in public services, and action to boost the income of the lowest-paid.As a priority, it is calling for an end to the era of tax havens which has seen increasing use of offshore centres by rich individuals and companies to avoid paying their fair share to society. This has denied governments valuable resources needed to tackle poverty and inequality. Mark Goldring, Oxfam GB Chief Executive, said: 'It is simply unacceptable that the poorest half of the world population owns no more than a small group of the global super-rich - so few, you could fit them all on a single coach. 'World leaders' concern about the escalating inequality crisis has so far not translated into concrete action to ensure that those at the bottom get their fair share of economic growth. In a world where one in nine people go to bed hungry every night we cannot afford to carry on giving the richest an ever bigger slice of the cake. 'We need to end the era of tax havens which has allowed rich individuals and multinational companies to avoid their responsibilities to society by hiding ever increasing amounts of money offshore.' Globally, it is estimated that super-rich individuals have stashed a total of $7.6 trillion in offshore accounts. If tax were paid on the income that this wealth generates, an extra $190 billion would be available to governments every year. As much as 30% of all African financial wealth is estimated to be held offshore, costing an estimated $14 billion in lost tax revenues every year. This is enough money to pay for healthcare for mothers and children that could save four million children's lives a year and employ enough teachers to get every African child into school. Nine out of 10 WEF corporate partners have a presence in at least one tax haven and it is estimated that tax dodging by multinational corporations costs developing countries at least $100 billion every year. Corporate investment in tax havens almost quadrupled between 2000 and 2014. Allowing governments to collect the taxes they are owed from companies and rich individuals will be vital if world leaders are to meet their new goal, set last September, to eliminate extreme poverty by 2030. Although the number of people living in extreme poverty halved between 1990 and 2010, the average annual income of the poorest 10% has risen by less than $3 a year in the past quarter of a century. That equates to an increase in individuals' daily income of less than a single cent a year. Had inequality within countries not grown between 1990 and 2010, an extra 200 million people would have escaped poverty. One of the other key trends behind rising inequality set out in Oxfam's report is the falling share of national income going to workers in almost all developed and most developing countries and a widening gap between pay at the top and the bottom of the income scale. This particularly affects women, who make up the majority of low-paid workers around the world. By contrast, the already wealthy have benefited from a rate of return on capital via interest payments, dividends, etc that has been consistently higher than the rate of economic growth. This advantage has been compounded by the use of tax havens, which are perhaps the most glaring example set out in the report of how the rules of the economic game have been rewritten in a manner that has supercharged the ability of the rich and powerful to entrench their wealth. Action to recover the missing billions lost to tax havens needs to be accompanied by a commitment on the part of governments to invest in healthcare, schools and other vital public services that make such a big difference to the lives of the poorest people. Governments should also make sure that work delivers an acceptable standard of living for those at the bottom as well as for those at the top - including moving minimum wage rates towards a living wage and tackling the pay gap between men and women. Goldring added: 'Ending extreme poverty requires world leaders to tackle the growing gap between the richest and the rest which has trapped hundreds of millions of people in a life of poverty, hunger and sickness. 'It is no longer good enough for the richest to pretend that their wealth benefits  the  rest  of  us  when  the facts show that the recent explosion in the wealth of the super-rich has come at the expense of the poorest.' - Oxfam

*Third World Resurgence No. 305/306, January/February 2016, pp 19-21