There are now 1,826 billionaires in the world (as the gap between rich and poor widens further)

Jim Clarken
There are now 1,826 billionaires in the world (as the gap between rich and poor widens further)

Picture sitting down to a game of Monopoly with your family. Before the first roll of the dice, your wife receives 14% less money, your daughter has to start 10 places behind you, while your son receives a get out of jail free card.

The fact is that people don’t start off the game of life on an equal footing. While some degree of inequality may be inevitable, the levels currently being recorded around the world are tipping the balance in favour of elites to such a degree that the scales are in danger of breaking.

Now the latest Forbes Rich List revealed there are now a record 1,826 billionaires in the world worth $7.05 trillion – with 181 new members joining this very exclusive club in the past year.

Extreme inequality is growing 

As the number of billionaires soars, at the other end of the scale there are nearly a billion people who go to bed hungry every night in a world that produces enough food for everyone.

This widening gap should concern us. Rising economic tides do not lift all boats. Extreme inequality is undermining growth and creating one of the most significant barriers to ending poverty.

Let me be clear – Oxfam is not criticising the right to make profits or create wealth. However, we must not facilitate a system that increases economic inequality either here or overseas because it compounds other inequalities such as the pay gap between women and men or the unequal access of girls to education.

People Ireland’s towns and villages are living in consistent poverty

A recent report from the Central Statistics Office shows that 7.7% of the Irish population live in consistent poverty, which means not being able to afford the basics such as meat every day or a second pair of shoes. Even those in employment work among the longest hours to keep a roof over their head.

The game is one that is rigged – in favour of small, wealthy and powerful elite. In 2014, over one-third of billionaires started from a position of wealth, with 34% of them having inherited some or all of their riches. This group is predominately male and greying; with 85% of these people aged over 50 years and 90% of them male.

The monocle-wearing Monopoly Man winner-takes-it-all, as evidenced by Oxfam’s report Wealth: Having it all and wanting more which warns the richest 1% will own more than 50% of global wealth in 2016 unless spiralling inequality is brought under control.

A disproportionate influence over policy-making

On the more expensive and exclusive streets, money piles high as some of the wealthiest individuals and biggest companies use every loophole in the book to dodge their tax responsibilities, as the recent SwissLeaks and LuxLeaks documents show. Money can be used to open doors and secure access to the corridors of power. It means a wealthy minority have can a disproportionate influence over policy-making simply because they know how the rules of the game work.

Meanwhile, the poorest people, in Ireland or in developing countries, pay the price of the game. Vital tax revenue is an important component of the social welfare system. It educates, it builds roads and the communications infrastructure that businesses rely on. In short it helps the Government create the conditions for employment and without doubt the creation of a well-paid educated workforce is one of most effective ways to challenge inequality.

Take Zambia, for example, with a growing economy that is now in the World Bank’s lower-middle income category and yet the number of people living below the $1.25 poverty line grew by 9% during the same period (from 65% to 74%).

High inequality makes it harder for people to participate and innovate in the economy, restricting productivity and growth. In poor and divided societies, it contributes to civil conflict.

This is not a game of chance – we can control what happens

While inequality is spiralling out of control, there is clear agreement that extreme inequality is one of the most pressing challenges of our time and damaging societies, governance and economic growth.

That is why we have seen calls for action and statements of outrage from leaders as diverse as the Pope and Desmond Tutu, to billionaires like Warren Buffett and to Christine Lagarde, Head of the IMF.

There is a solution. Unlike the game of monopoly, we can control the outcome. First off, revise the rules. Close off the loopholes and use the billions currently being lost to tax authorities to drive inclusive economic growth through the funding of public services, education, and social welfare.

We need to share the tax burden fairly

Secondly, bring more transparency, making it clear who owes what. European governments should implement automatic information exchange between tax authorities as soon as possible to close off loopholes. We also need to set up public registries of the real owners of so-called ‘shell’ companies – governments will have the chance to do so when they give force to the EU’s Anti-Money Laundering Directive.

Another part of the solution is to adopt public country-by-country reporting so we know where companies work and where they really pay their taxes.

And share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth.

But unless these actions are taken, the cards will be stacked against yet another generation. We can’t afford to leave this to chance.

Jim Clarken is Chief Executive of Oxfam Ireland.

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