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Debunking Billionaire Claims of Heroic Capitalism

"The notion that it is somehow legitimate for a tiny group of humans to cordon off the bulk of the world’s bounty for themselves is fairly astonishing, on the face of it."

Melinda and Bill Gates at the World Economic Forum in Davos in 2009. (Photo: World Economic Forum/flickr/cc)

In the future, people will probably continue to marvel at how creatures with tiny brains once stalked the Earth unchallenged.

For now, however, billionaires reign supreme, with only a small stirring of dissent, led by the impressive U.S. congresswoman Alexandria Ocasio-Cortez, or AOC.

Still, that small stirring is noteworthy. It could catch on.

The notion that it is somehow legitimate for a tiny group of humans to cordon off the bulk of the world’s bounty for themselves — leaving billions of people begging on the street or scrounging through garbage dumps — is fairly astonishing, on the face of it.

The unfairness is compounded by the fact there’s no evidence billionaires are particularly smart or talented, given that some 60 to 70 per cent of them inherited their wealth, according to the French economist Thomas Piketty.

Today’s extreme concentration of wealth is so palpably unfair — the richest 26 individuals have as much wealth as the poorest half of humanity — that it cries out for a powerful justification.

Mega-billionaire Bill Gates seemed to produce a pretty powerful justification last month at the annual elite gathering in Davos — a spectacular infographic showing that the world poverty rate had plummeted over the past two centuries, from 94 per cent to just 10 per cent today.

This stunning finding, developed by economist Max Roser of Our World in Data, certainly casts billionaires in a more sympathetic light, as mere byproducts of an economic system that has significantly helped the world’s people, lifting most of humanity out of poverty.

The finding has been keenly promoted by the Davos crowd as well as by high-profile commentators like New York Times columnist Nicholas Kristof.

An upbeat Gates tweeted the infographic to his 46 million followers, adding: “A lot of people underestimate just how much life has improved over the past two centuries.”

Easy for him to say. In fact, the claim that life has improved for most people collapses pretty quickly under scrutiny.

Jason Hickel, an anthropologist at the London School of Economics, points out that poverty data before 1981 is sketchy, and data going as far back as the 1820s is meaningless. That’s because in earlier times, most people lived in subsistence economies; they had little or no money but had access to the rich natural resources of the common lands.

But over time people were forced off the land by wealthy interests, and obliged to work for wages in mines and factories. Hickel notes that “the new income people earned from wages didn’t come anywhere close to compensating for their loss of land and resources.”

In other words, far from being a great boon, the arrival of modern capitalism has resulted in vast numbers of people being forced to give up a self-supporting existence and ending up as impoverished labourers, often malnourished and housed in grim, toiletless shacks.

(Some 2.4 billion people lack a decent toilet, according to the World Health Organization.)

Even in the four decades since 1981, there’s been no decline in global poverty, Hickel insists. On the contrary, he says if we use a more meaningful poverty measure — $7.40 U.S. a day, rather than the absurdly low $1.90 U.S. a day used by Roser — the number of people living in poverty has dramatically increased, to 4.2 billion today, more than half the world’s population.

The real story of today’s global capitalism is better captured by Piketty. In his epic 577-page treatise, Capital in the Twenty-First Century, he makes the case that capitalism leads to ever-increasing inequality.

Depressing as Piketty’s case is, it also includes a ray of hope. He notes that an exception occurred in the period following the Second World War (1945 to 1975) when equality actually increased. This was particularly true in the Anglo-American countries, largely due to the very progressive tax systems enacted by governments, notably in the Anglo-American countries, including Canada.

So the campaign stirred up by AOC — calling for a tax system similar to the early postwar years — could actually make a difference, if the public started paying attention.

Certainly, billionaire claims about capitalism heroically lifting humankind out of poverty turn out to be easily debunked. Imagine if that news got out.

 

Linda McQuaig

Linda McQuaig

Linda McQuaig is an author, journalist, and former NDP candidate for Toronto Centre in the Canadian federal election. She is also the author (with Neil Brooks) of Billionaires’ Ball: Gluttony and Hubris in an Age of Epic Inequality, published by Beacon Press.

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