Eight billionaires control as much wealth as the bottom half of the world’s population

Oxfam issues report on eve of Davos conference

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17 January 2016

Eight billionaires, six of them from the United States, own as much combined wealth as the bottom half of the world’s population, some 3.6 billion people, according to the latest report on global inequality from the British-based advocacy group Oxfam.

The report was released Monday, on the eve of the annual World Economic Forum in the mountain resort of Davos, Switzerland, at which many of the ultra-rich will converge this week. The Oxfam document contains a range of figures that highlight the staggering growth of social inequality, showing that the income and wealth gap between a tiny financial elite and the rest of the world’s people is widening at an accelerating rate.

New data made available to Oxfam reveals that wealth is even more concentrated than the organization had previously believed. Last year, Oxfam reported that 62 people controlled as much wealth as the bottom half of humanity. In its latest report, the charity notes that “had this new data been available last year, it would have shown that nine billionaires owned the same wealth as the poorest half of the planet.”

Oxfam writes that since 2015, the richest 1 percent of the world’s population has owned more than the rest of the world put together, and that over the past quarter century, the top 1 percent has gained more income than the bottom 50 percent combined.

“Far from trickling down, income and wealth are being sucked upwards at an alarming rate,” the report states. It notes that the 1,810 dollar billionaires on the Forbes 2016 rich list own $6.5 trillion, “as much wealth as the bottom 70 percent of humanity.”

Over the next 20 years, some 500 people will hand over to their heirs more than $2.1 trillion, an amount larger than the gross domestic product of India, a country of 1.3 billion people.

Oxfam cites recent research by the economist Thomas Piketty and others showing that in the United States, over the past 30 years the growth in incomes of the bottom 50 percent has been zero, while the incomes of the top 1 percent have risen by 300 percent.

The same process is taking place in the world’s poorest countries. Oxfam notes that Vietnam’s richest man earns more in a day than the country’s poorest person earns in 10 years.

The report points to the systematic character of the siphoning of global wealth to the heights of society. The business sector is focused on delivering “ever higher returns to wealthy owners and top executives,” with companies “structured to dodge taxes, drive down workers’ wages and squeeze producers.”

This involves the most barbaric and criminal practices. Oxfam cites a report by the International Labour Organisation estimating that 21 million people are forced labourers, generating $150 billion in profits every year. The world’s largest garment companies all have links to cotton-spinning mills in India that routinely use the forced labour of girls.

Small farmers are also being driven into poverty: in the 1980s, cocoa farmers received 18 percent of the value of a chocolate bar, compared to just 6 percent today.

The extent of corporate power is highlighted in a number of telling statistics. In terms of revenue, 69 of the world’s largest economic entities are now corporations, not countries. The world’s 10 largest companies, including firms such as Wal-Mart, Shell and Apple, have combined revenue greater than the total government revenue of 180 countries.

Although the authors avoid any condemnation of the profit system per se, the information provided in their report amounts to a stunning verdict on the capitalist system. It highlights in facts and figures two central processes delineated by Karl Marx, the founder of modern socialism.

In Capital, Marx explains that the objective logic of the capitalist system, based on the drive for profit, is to produce ever greater wealth at one pole and poverty, misery and degradation at the other. In the Communist Manifesto, he explains that all governments are but the executive committee for managing the affairs of the capitalist class.

This is exemplified in the tax policies and other “business-friendly” measures undertaken by governments around the world. The Oxfam report notes that technology giant Apple is alleged to have paid a tax of just 0.005 percent on its European profits.

Developing countries lose around $100 billion a year as a result of outright tax dodging and the exemptions granted to companies. In Kenya, $1.1 billion is lost to government revenue every year because of exemptions, an amount nearly twice the country’s annual health budget.

Government tax policies work hand in hand with tax dodging and criminality. The report cites economist Gabriel Zucman’s estimate that $7.6 trillion of global wealth is hidden in offshore tax havens. Africa alone loses $14 billion in annual revenues because of the use of tax havens: enough to pay for health care that would save the lives of four million children and employ enough teachers to ensure that every African child went to school.

There is one significant omission from Oxfam’s discussion of accelerating inequality. It makes no mention of the critical role of the policies of the world’s major governments and central banks in handing over trillions of dollars to the banks, major corporations and financial elites through bank bailouts and the policies of “quantitative easing” since the eruption of the global financial crisis in 2008.

A discussion of these facts would raise uncomfortable political issues. The report opens by favourably citing remarks by US President Barack Obama to the UN General Assembly in 2016 that a world in which 1 percent of the population owns as much as the other 99 percent can never be stable.

But the very policies of the Obama administration have played a key role in creating this world. After rescuing the financial oligarchs from the results of their own criminal actions with massive bank bailouts, the Obama administration and the US central bank ensured their further enrichment by providing a supply of ultra-cheap money that boosted the value of their assets.

Under Obama, the decades-long growth of inequality accelerated, along with the descent of the ruling class into parasitism and criminality. He paved the way for the financial oligarchy to directly seize the reins of power, embodied in the imminent presidency of casino and real estate billionaire Donald Trump, to whom Obama will hand over the keys to the White House on Friday.

The overriding motivation behind the Oxfam report is fear of the political consequences of ever-rising inequality and a desire to deflect mounting anger over its consequences into harmless channels. It advances the perspective of a “human economy,” but maintains that this can be achieved on the basis of the capitalist market, provided corporations and governments change their mindsets.

The absurdity of this perspective, based on the long-discredited outlook of British Fabianism, which has dominated the thinking of the English middle classes for well over a century, can be seen from the fact that the report is directed to the global financial elites gathered at the Davos summit this week, with a call for them to change their ways.

The bankruptcy of this outlook is demonstrated not only by present-day facts and figures, but by historical experience. A quarter century ago, following the liquidation of the Soviet Union, the air was filled with capitalist triumphalism. Freed from the encumbrance of the USSR, and able to dominate the globe, liberal capitalist democracy was going to show humanity what it could do.

And it certainly has, creating a world marked by ever-rising inequality, the accumulation of wealth to truly obscene levels, oppression and anti-democratic forms of rule, criminality at the very heights of society, and the increasingly ominous prospect of a third world war.

This history brings into focus another anniversary: the centenary of the Russian Revolution. Despite its subsequent betrayal at the hands of the Stalinist bureaucracy, the Russian Revolution demonstrated imperishably, and for all time, that a world beyond capitalism and all its social ills and malignancies is both possible and necessary. Its lessons must inform the guiding perspective for the immense social struggles that are going to erupt out of the social conditions detailed in the Oxfam report.

Nick Beams

WSWS 

47% of Jobs Will Disappear in the next 25 Years

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British Musicians. Ms. Dynamite. Getty Images.

The Trump campaign ran on bringing jobs back to American shores, although mechanization has been the biggest reason for manufacturing jobs’ disappearance. Similar losses have led to populist movements in several other countries. But instead of a pro-job growth future, economists across the board predict further losses as AI, robotics, and other technologies continue to be ushered in. What is up for debate is how quickly this is likely to occur.

Now, an expert at the Wharton School of Business at the University of Pennsylvania is ringing the alarm bells. According to Art Bilger, venture capitalist and board member at the business school, all the developed nations on earth will see job loss rates of up to 47% within the next 25 years, according to a recent Oxford study. “No government is prepared,”The Economist reports. These include blue and white collar jobs. So far, the loss has been restricted to the blue collar variety, particularly in manufacturing.

To combat “structural unemployment” and the terrible blow it is bound to deal the American people, Bilger has formed a nonprofit called Working Nation, whose mission it is to warn the public and to help make plans to safeguard them from this worrisome trend. Not only is the entire concept of employment about to change in a dramatic fashion, the trend is irreversible. The venture capitalist called on corporations, academia, government, and nonprofits to cooperate in modernizing our workforce.

To be clear, mechanization has always cost us jobs. The mechanical loom for instance put weavers out of business. But it’s also created jobs. Mechanics had to keep the machines going, machinists had to make parts for them, and workers had to attend to them, and so on. A lot of times those in one profession could pivot to another. At the beginning of the 20thcentury for instance, automobiles were putting blacksmiths out of business. Who needed horseshoes anymore? But they soon became mechanics. And who was better suited?

A Toyota plant, Japan. Manufacturing is almost fully automated today and so many other jobs are not far behind.

Not so with this new trend. Unemployment today is significant in most developed nations and it’s only going to get worse. By 2034, just a few decades, mid-level jobs will be by and large obsolete. So far the benefits have only gone to the ultra-wealthy, the top 1%. This coming technological revolution is set to wipe out what looks to be the entire middle class. Not only will computers be able to perform tasks more cheaply than people, they’ll be more efficient too.

Accountants, doctors, lawyers, teachers, bureaucrats, and financial analysts beware: your jobs are not safe. According to The Economist, computers will be able to analyze and compare reams of data to make financial decisions or medical ones. There will be less of a chance of fraud or misdiagnosis, and the process will be more efficient. Not only are these folks in trouble, such a trend is likely to freeze salaries for those who remain employed, while income gaps only increase in size. You can imagine what this will do to politics and social stability.

Mechanization and computerization cannot cease. You can’t put the genie back in the bottle. And everyone must have it, eventually. The mindset is this: other countries would use such technology to gain a competitive advantage and therefore we must adopt it. Eventually, new tech startups and other business might absorb those who have been displaced. But the pace is sure to move far too slowly to avoid a major catastrophe.

According to Bilger, the problem has been going on for a long time. Take into account the longevity we are enjoying nowadays and the US’s broken education system and the problem is compounded. One proposed solution is a universal basic income doled out by the government, a sort of baseline one would receive for survival. After that, re-education programs could help people find new pursuits. Others would want to start businesses or take part in creative enterprises. It could even be a time of the flowering of humanity, when instead of chasing the almighty dollar, people would able to pursue their true passions.

On a recent radio program, Bilger talked about retooling the education system in its entirety, including adding classes that are sure to transfer into the skills workers need for the jobs that will be there. He also discussed the need to retrain middle-aged workers so that they can participate in the economy, rather than be left behind. Bilger said that “projects are being developed for that.” Though he admits that many middle-aged workers are resistant to reentering the classroom, Bilger says it’s necessary. What’s more, they are looking at ways of making the classroom experience more dynamic, such as using augmented reality for retraining purposes, as well as to reinvent K-12 education. But such plans are in the seminal stages.

Widespread internships and apprenticeships are also on the agenda. Today, the problem, as some contend, is not that there aren’t enough jobs, but that there aren’t enough skilled workers to fill the positions that are available. Bilger seems to think that this problem will only grow more substantial.

But would those who drive for a living, say long haul truckers and cab drivers, really find a place in the new economy with retraining, once self-driving vehicles become pervasive? No one really knows. Like any major shift in society, there are likely to be winners and losers. This pivot point contains the seeds for a pragmatic utopia, or complete social upheaval, but is likely to fall somewhere between.

Bilger ended the interview saying, “What would our society be like with 25%, 30% or 35% unemployment? … I don’t know how you afford that, but even if you could afford it, there’s still the question of, what do people do with themselves? Having a purpose in life is, I think, an important piece of the stability of a society.”

 

 

Noam Chomsky: Randomly Surfing the Web Is No Way to Educate Yourself

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Internet Is a ‘Cult Generator’

A fact here, a fact there, and “all of a sudden you have some crazed picture.”

Photo Credit: Talks at Google/YouTube

Fake news has been around long before Facebook, but it was the tech company’s goal to appear like a newspaper that eventually misled its users far more than ever before.

“Technology is basically neutral,” author Noam Chomsky explained. “It’s kinda like a hammer…the hammer doesn’t care whether you use it to build a house or a torturer uses it to crush somebody’s skull… same with modern technology [like] the internet. The internet is extremely valuable if you know what you’re looking for.”

Unfortunately, that’s almost the antithesis of Facebook. And while Paper, the ad-free Facebook news feed app ultimately failed, the social media network had by then successfully developed tools like Smart Publishing. The latter tool for publishers aimed to boost stories on Facebook that were popular with the user’s own network, amplifying the performance of fake news in a scandal-obsessed hyperpartisan era. But until five weeks after the election, there was little distinction on the platform between “news” published by conspiracy theorists and actual trusted news sources.

“If you don’t have [an idea what you’re looking for], exploring the internet is just picking out random factoids that don’t mean anything,” Chomsky stated. Without a specific strategy, he believes the internet is far more likely to be harmful than helpful.

“Random exploration through the internet turns out to be a cult generator,” Chomsky concluded. “Pick up the factoid here, a factoid there, somebody else reinforces it, and all of a sudden you have some crazed picture which has some factual basis, but nothing to do with the world. You have to know how to evaluate, interpret and understand.”

Despite having initially denied that hoaxes on Facebook influenced the presidential election, Facebook did begin flagging articles users identified as fake news in mid-December.

Facebook isn’t the only tech company faced with the onslaught of fake news; Google’s top stories are often totally illegitimate.

Chomsky doesn’t like Facebook for many reasons; however, he does use the internet for research.

Then there’s Donald Trump, who in May, after sharing a fake video to claim a protester’s non-existent ties to ISIS, said, “All I know is what’s on the internet.”

Watch:

Report: Donald Trump denied Twitter spot at tech meeting

…because they didn’t give him a “crooked Hillary” emoji

The president-elect was reportedly miffed that a political stunt was blocked by the tech giant

Report: Donald Trump denied Twitter spot at tech meeting because they didn't give him a "crooked Hillary" emoji
(Credit: Getty/Chip Somodevilla)

Donald Trump — the man who will one day be in charge of formulating policy, as well as directing the FBI, CIA and NSA — excluded his favorite medium of communicationfrom a roundtable with tech giants because he was reportedly holding a grudge about not being able to get away with a campaign stunt.

Back in November, the Trump campaign wanted to develop a “crooked Hillary Clinton” emoji, which The Sun described as a giant bag of cash with angel wings. That, of course, is hilariously ironic, considering Trump’s cabinet appointments all come from the “highest-paid” and “most donations” list. But it was a no-go for Twitter, which said in a statement: “We believe that political advertising merits a level of disclosure and transparency that branded political emojis do not meet, and we ultimately decided not to permit this particular format for any political advertising.”

The Trump team held that against the tech company, according to Politico, denying them a spot at the table in an important meeting, according to Politico:

Twitter was one of the few major U.S. tech companies not represented at Wednesday afternoon’s Trump Tower meeting attended by, among others, Apple’s Tim Cook, Amazon’s Jeff Bezos, Facebook’s Sheryl Sandberg, and Tesla’s Elon Musk — an omission all the more striking because of Trump’s heavy dependence on the Twitter platform. With some 17.3 million followers of his account, the president-elect has made Twitter into the de facto press channel of his transition operation.

Trump spokesman Sean Spicer said that Twitter was cut out because “the conference table was only so big.” Trump’s table had room for his three children, in a remarkable conflict of interest.

At the meeting, Trump told tech executives — whose combined market value was more than $3 trillion — that “I’m here to help you folks do well.”

 

Jeremy Binckes is the cover editor at Salon.com.

The Oakland fire tragedy and the housing crisis in America

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7 December 2016

The death toll from last Friday’s fire at a warehouse in Oakland, California stands at 36, with 85 percent of the burnt-out structure having been searched. Among the dead, some of whom have yet to be identified, are young people and artists who made their home in the 86-year-old sprawling two-story structure known as the Ghost Ship. The building was leased to an artists’ collective in the Fruitvale district of the city.

It was the deadliest building fire in the US since a Rhode Island nightclub fire in 2003, which claimed 100 lives. The tragedy has horrified the San Francisco Bay Area and the world, leaving many asking how such an event could take place in 21st century America.

It is unclear at this point whether criminal charges will be filed against the owner of the building, Chor Nar Siu Ng, who owns several other blighted properties in Oakland, or against Derick Ion Almena, who leased the property, lived there with his wife and three children, and ran the artists’ collective. Looking for an individual to blame, the media has launched a campaign against Almena in particular, who lost many people he knew in the blaze.

Authorities have pointed to electrical problems and the lack of basic fire safety provisions in the dilapidated structure. At the root of the tragedy, however, lies the dysfunctional character of American capitalism, including a housing crisis born of poverty, social inequality, and years of neglect by government authorities.

The Bay Area, long known as a haven for artists and students, is now largely unaffordable for workers and young people. Along with the tech boom of the last six years, housing prices have skyrocketed. Warehouses and lofts in San Francisco’s former industrial areas have given way to high-end condos and workspaces to house tech start-ups and their employees. More than 2,000 people are evicted annually in the city.

This has pushed artists and others struggling to find affordable housing to Oakland, across the San Francisco Bay, and beyond. Now these areas are also increasingly unaffordable, with the median cost of available rentals in Oakland standing at $3,000 a month, far beyond what is affordable for most Americans. People living in buildings such as the Ghost Ship are faced with the choice of living in substandard housing or being homeless.

Speaking to CBS, a city councilor from Fruitvale estimated that there are some 200 warehouses in Oakland “that have no papers, no permit, no fire code, nothing.” If occupied, these structures are disasters waiting to happen. And while building inspectors apparently ignore these deathtraps, no measures are taken to alleviate the growing crisis that leads to their use as housing.

The Bay Area’s economy has spawned a small army of billionaires, with 50 of them making it onto the Forbes 400 list of richest Americans in 2016. Oakland itself is increasingly socially polarized, home to the fifth largest cluster of “elite zip codes” in the US, ranked by a combination of high income and education level attained. At the same time, more than 800,000 people in the region live below the poverty line.

The housing crisis in the Bay Area mirrors that of metropolitan areas across the country. The Los Angeles Times reports that more than 20,000 rent-controlled apartments in LA have been taken off the market since 2011 to make way for pricey homes and condos for the wealthy, leading to hundreds of evictions this year.

Evictions are taking place not only in thriving real estate markets like San Francisco, New York and Los Angeles, but also in places like Milwaukee and St. Louis, where deindustrialization and unemployment, combined with wages that do not keep pace with the cost of living, are driving people out of their homes.

According to a report released last year by Harvard University titled “Projecting Trends in Severely Cost-Burdened Renters,” by 2025 nearly 15 million US households will devote more than half of their income to rent. Those unable to keep pace with their rent or mortgage payments will find themselves evicted and possibly homeless.

The federal government has long since abandoned any responsibility for the provision of decent housing, leading to disasters like that in Oakland last week. According to the US Fire Administration, an organization that tracks fire deaths based on media reports, there were 2,290 fire deaths in the US in 2015, many of them in mobile homes or other substandard housing.

The first US national housing legislation, passed in 1937, went beyond providing low-cost public housing and was aimed at improving the lagging economy by funding jobs to build affordable housing. Public housing today has largely ceased to exist, with units sold off to developers to turn a quick profit, and those in need of housing waiting years if not decades for openings to use their Section 8 housing vouchers.

The Obama administration, following the Bush and Clinton administrations before it, has made no pretense of establishing a public works program to address the woeful state of infrastructure in the US—whether in housing, roads, bridges, energy grids or in other vital areas.

President-elect Donald Trump has made clear his attitude toward the housing crisis with his nomination of Ben Carson to run the Department of Housing and Urban Development. Carson, a retired neurosurgeon with no professional housing policy experience, has declared his hostility to the entire concept of public housing and social provision in general, stating: “It really is not compassionate to pat people on the head and say, ‘There you poor little thing, I’m going to take care of all your needs, your health care, your food and your housing, don’t you worry about anything’” (Conservative Political Action Conference, February 26, 2015).

The Socialist Equality Party calls for an immediate halt to foreclosures and evictions and for the provision of billions of dollars to provide decent, low-cost housing to those in need. Housing is a social right that can be assured only by placing the home construction and financing industry under public ownership.

For tragedies like that in Oakland to be averted in the future, public funds must be poured into the construction of new homes for working families. Such a project can be undertaken only under a workers government based on a socialist program, which treats affordable housing as a basic human right, not a privilege reserved for the wealthy.

Kate Randall

http://www.wsws.org/en/articles/2016/12/07/pers-d07.html

Stephen Hawking: Automation and AI is going to decimate middle class jobs

stephen hawking scientist science physics

British scientist Prof. Stephen Hawking gives his ‘The Origin of the Universe’ lecture to a packed hall December 14, 2006 at the Hebrew University of Jerusalem, Israel. Hawking suffers from ALS (Amyotrophic Lateral Sclerosis or Lou Gehrigs disease), which has rendered him quadriplegic, and is able to speak only via a computerized voice synthesizer which is operated by batting his eyelids. David Silverman/Getty Images

Artificial intelligence and increasing automation is going to decimate middle class jobs, worsening inequality and risking significant political upheaval, Stephen Hawking has warned.

In a column in The Guardian, the world-famous physicist wrote that“the automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.”

He adds his voice to a growing chorus of experts concerned about the effects that technology will have on workforce in the coming years and decades. The fear is that while artificial intelligence will bring radical increases in efficiency in industry, for ordinary people this will translate into unemployment and uncertainty, as their human jobs are replaced by machines.

Technology has already gutted many traditional manufacturing and working class jobs — but now it may be poised to wreak similar havoc with the middle classes.

A report put out in February 2016 by Citibank in partnership with the University of Oxford predicted that 47% of US jobs are at risk of automation. In the UK, 35% are. In China, it’s a whopping 77% — while across the OECD it’s an average of 57%.

And three of the world’s 10 largest employers are now replacing their workers with robots.

Automation will, “in turn will accelerate the already widening economic inequality around the world,” Hawking wrote. “The internet and the platforms that it makes possible allow very small groups of individuals to make enormous profits while employing very few people. This is inevitable, it is progress, but it is also socially destructive.”

He frames this economic anxiety as a reason for the rise in right-wing, populist politics in the West: “We are living in a world of widening, not diminishing, financial inequality, in which many people can see not just their standard of living, but their ability to earn a living at all, disappearing. It is no wonder then that they are searching for a new deal, which Trump and Brexit might have appeared to represent.”

Combined with other issues — overpopulation, climate change, disease — we are, Hawking warns ominously, at “the most dangerous moment in the development of humanity.” Humanity must come together if we are to overcome these challenges, he says.

Stephen Hawking has previously expressed concerns about artificial intelligence for a different reason — that it might overtake and replace humans. “The development of artificial intelligence could spell the end of the human race,” he said in late 2014. “It would take off on its own, and redesign itself at an ever increasing rate. Humans, who are limited by slow biological evolution, couldn’t compete, and would be superseded.”

 

 

http://www.businessinsider.com/stephen-hawking-ai-automation-middle-class-jobs-most-dangerous-moment-humanity-2016-12?r=UK&IR=T