An update to The Rules’ 2013 global inequality video

June 18, 2017

Administrator

When we were researching the data behind the global inequality video, we were shocked by how extreme the figures were. And judging by how fast the video spread, everyone else was just as surprised as we were. But that was in 2013, and things have changed a lot since then – sadly for the worse.

In 2016, Oxfam announced that the richest 1% now have more wealth than the rest of the world’s population combined. That’s a shocking fact, and gives us a feel for the immense concentration of wealth in the hands of a few.

But even this doesn’t really show how extreme things have become. In the video, we estimated that the richest 300 people had more wealth than the poorest 3 billion. Oxfam picked this comparison up and ran with it, and has since updated the figures each year. In 2017, they calculated that inequality had become so bad that the richest 8 people had more wealth than the poorest half of the human population, or 3.6 billion. That’s the number of people it takes to fill single limousine. (Source)

What about inequality between countries? Well, there a couple of ways to look at it. One is to measure the gap between the poorest and richest countries in the world, in terms of income per capita. 200 years ago, the per capita income of the richest country was about 6 times higher than the poorest country. That’s a pretty big gap. Then, by the end of colonialism in the 1960s, it was 33 times higher. And it kept getting worse. Today, it is about 118 times higher. And that’s not including extreme outliers, like small oil-rich countries in the Middle East. (Source)

A second way is to look at inequality between regions of the world. The absolute gap between the per capita income of the United States – the world’s dominant power – and that of Africa, the Middle East, South America, Central America, and South Asia has roughly tripled since 1960.

This seems surprising to people, because we hear so much in the media about how rich countries give aid to poor countries. And indeed it is a lot of money – about $130 billion each year. But this narrative of aid obscures a somewhat more sinister reality. While rich countries do give a lot of aid to poor countries each year, they extract much more than they give (Source). For example, poor countries lose about $875 billion each year to illicit financial flows through “trade misinvoicing” – a practice that multinational companies use to evade taxes, secreting money into offshore havens. That’s nearly seven times more than the aid budget.

There are lots of other outward flows we might look at. Multinational companies repatriate profits worth $486 billion each year out of global South countries. And the South pays about $200 billion each year in interest payments on debts, mostly to big banks in New York and London, repayments which in many cases, are on debts repaid many times over. And then there are smaller outflows, like the $60 billion that global South countries have to pay each year to get access to basic technologies and medicines that are restricted by rigid intellectual property rules under the WTO.

In addition to these outward flows of money, there are also enormous costs and losses that poor countries suffer as a result of how the global economy is structured. For instance, because trade rules at the WTO are designed to favour the interests of rich countries, poor countries end up losing about $700 billion per year in lost export revenues. Then there are the structural adjustment programs that the World Bank and the IMF have been imposing on the South since the early 1980s, which cost poor countries about $480 billion per year in lost potential GDP. And then of course there is climate change, caused almost entirely by historical emissions from the North, which cause damages in the South up to $571 billion per year.

If we add these figures up, just for the sake of argument, we see that they outstrip the aid budget by a factor of 25.   Rich governments like to say they’re helping poor countries develop, but who’s really developing whom?

We are hoping to be able to create an updated video soon to reflect these changes.

3 thoughts on “An update to The Rules’ 2013 global inequality video”

  1. Joel Koman says:

    I would like to share an interesting model being presented at the Santa Barbara StartUp Weekend relating to capitalism, products and marketing. The idea is to use monopolies or rather a monopoly to offset the following problem…..Actually the problem is very well identified by Peter Thiel. Our corporations and inventors/developers who gain levels of success and wealth use their influence to create a monopoly. The monopoly is the opposite of pure capitalism, the monopoly provides the means to keep prices high, to prevent competition, to control and monetize further innovations. Free market capitalism is a brutal system of wide open competition continually driving many out of business, driving prices down causing outside innovation. As long as we allow $$ to drive our politicians and governmental policy….those with money, power and influence will continue to claim capitalism is the only system that works all while continuing to ensure they prevent it by becoming ever more monopolistic.

  2. Howard Switzer says:

    Well I believe you see how a monopoly works but there is one monopoly that trumps them all and it is systemic, been around for millennia That is our monetary system of money being issued as a debt contract. This is the fountain head of wealth and power for the capitalists, those few who live at the top of the wealth distribution beanstalk. Yeah the people fight it out and the winner gets bought, the “free market” is an illusion and the “business cycle” is a pump and dump scheme. If they cannot be bought they find another winner. But people come and go but the system lives on so don’t focus on the current crop of criminals, it is the system that concentrates wealth systematically that needs to change. Change the money, change the world, see the NEED Act HR2990. This would shift the economic paradigm from greed to care.

  3. Sandy Turner says:

    Related to changing things, is a song called “The Bumper Sticker Song” (I think) by a duo of traveling troubadours called “Four Shillings Short”. They built the song around about 20 different bumper sticker messages. My favorite line in the song is ” men who change diapers change the world”.

    But on the subject of capitalism and monumentally unequal distribution of wealth, I recommend Jerry Mander’s book, The Capitalism Papers: Fatal Flaws of an Obsolete System.

    Related to the topic of rich countries extracting tremendous wealth from poor countries such as in Africa, the “leader of the free world” hosted a lunch for many African leaders in New York last week. He had praise for the health care system of Nambia. The trouble is that there is no country in the world called Nambia. Africa has three countries with names that are close: Namibia, The Gambia, and Zambia. Just goes to show that one does not have to have a great grasp of the geography of the world to be a U.S. president.

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Trump: Join us in connecting the dots

The election of Donald Trump has left millions, maybe even billions of us in shock. Although we may be looking with bewilderment at the US today, we should remember that he is not an isolated phenomenon. He is a symptom of a sickness that is raging all around the world. People are hurting, disillusioned with mainstream politics and increasingly angry at a neoliberal economic system that is destroying lives and the planet with increasing ferocity. And in their desperation they are willing to consider extreme measures to make themselves heard.

Demagogues thrive amid fear and insecurity, which is why they paint the world in such dark terms. It’s a strategy that has put right-wing populist leaders in power in an Axis of Egos: from Brazil to Turkey, the Philippines to Russia, authoritarian strongmen like Trump are on the rise. Meanwhile, many centrist liberals, like the Democratic Party in the US, have been so intent on rejecting left-wing populist solutions, and so sure of their ability to beat anyone running on a white supremacy platform with its misogyny and homophobia, that they opened the door for Mr. Trump to walk straight through. Their preference is always to maintain the status quo that has served them so well.

As dangerous as the election of Trump is for the world, we can also see in this moment the truth that we simply cannot rely on the electoral political system to save us, because it is designed to prevent the fundamental change we need. Its own survival is at stake and it will marshal all its champions and resources to defend itself and stop the emergence of a new system. But when we work, or continue working for change from the ground up; when we build or keep on building new ways of living and being with each other where we live; when we construct or keep constructing the future we know is possible with our own hands, rather than hoping distant leaders will build it for us, we find our true power. Finally, when we combine that with the unbending hope that has powered change through the ages, we know our power has meaning.

A 400-year-old economic system is dying and another is struggling to be born. Change on this scale is not going to be smooth or easy. We should not be surprised, then, that moments like this — where the establishment is dealt a body blow — become more and more common. We can despair when that blow comes in the form of right-wing extremists, or we can step-up. We are the ones we are looking for, who can and must grasp the opportunities in these crises that are undoubtedly there.

So it’s time to come together, taking time to remember the earth. Remember all the successful struggles for justice that came before us, and imagine all those to come. Remember that social movements are growing all over the world and realising the common struggle. Remember life. Then, organise. Find each other and help midwife the inevitable transition that brings forth from the ashes of neoliberal capitalism a system that works for the good of all life on Mother Earth. This is not just activism; this is our responsibility as human beings alive as this all unfolds.

This is why we are here.