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The true reasons why the rich get richer
Observation on the increasing divide between rich and poor, drafted and published on Jan. 22, 2014
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In conjunction with the Word Economic Forum in Davos, the British NGO Oxfam has published a report
according to which the richest 85 individuals in the world hold wealth equivalent to that owned by the bottom
half of the world's population. This staggering distribution of wealth is usually being portrayed as the result of a
“neo-liberal onslaught” (Noam Chomsky) onto the economy that favors the rich both by an overly generous tax
regime and the propagation of an upper class driven, laissez-faire government.
This view warrants a few rectifications, first by looking at the underlying reasons why the rich do indeed get
richer:
Observation on the increasing divide between rich and poor, drafted and published on Jan. 22, 2014
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- Winnie Byanyima, the Oxfam executive director who will attend the Davos meetings, said: "It is staggering
that in the 21st Century, half of the world's population – that's three and a half billion people – own no more
than a tiny elite whose numbers could all fit comfortably on a double-decker bus." Oxfam also argues that
this is no accident either, saying growing inequality has been driven by a "power grab" by wealthy elites,
who have co-opted the political process to rig the rules of the economic system in their favour. In the report,
entitled Working For The Few (…), Oxfam warned that the fight against poverty cannot be won until wealth
inequality has been tackled. "Widening inequality is creating a vicious circle where wealth and power are
increasingly concentrated in the hands of a few, leaving the rest of us to fight over crumbs from the top
table," Byanyima said.
In conjunction with the Word Economic Forum in Davos, the British NGO Oxfam has published a report
according to which the richest 85 individuals in the world hold wealth equivalent to that owned by the bottom
half of the world's population. This staggering distribution of wealth is usually being portrayed as the result of a
“neo-liberal onslaught” (Noam Chomsky) onto the economy that favors the rich both by an overly generous tax
regime and the propagation of an upper class driven, laissez-faire government.
This view warrants a few rectifications, first by looking at the underlying reasons why the rich do indeed get
richer:
- Given the reality of market dynamics, it cannot be denied that it helps a great deal to have had prior
success in order to achieve more success in the future. This is a constant of human interaction.
And it is especially true in an ever greater mass market. After all, most people, including journalists and
social workers, tend to take their decisions on the basis of what they perceive to be a credible service
provider to them. And the perception of credibility, unfortunately, has a lot to do with name recognition,
appearance, media presence and general acceptance. It is, hence, not surprising that those who are
already well established tend to be even more so as time as goes by as those who weren’t established to
begin with.
Now, take this market dynamic and apply it to “a world that is indeed flat” (Thomas Friedman); I.e.,
take the credibility advantage of the few and apply to a world where regional markets continuously
integrate, where cultural differences constantly evaporate, where consumer behavior increasingly seems
to follow the same trends and where winning business propositions can be made to prosper almost
everywhere. Does it not appear natural in this context that those on the sunny side appear to enjoy the
sun a lot more than they used to do when local markets were less synchronized?
And if all that isn’t enough to explain the growing wealth divide, consider the role that the media plays in
this planetary mass market. Is it not true that this market of ours is in large respect a media driven
phenomenon? And must we not accept that the mirroring and copying effect which media
activities entail multiplies the recognition and success that the rich and famous can enjoy?
Now, clearly, as all famous people will readily attest, there is also a huge downside to being the favorite
of the media. After all, any wrongdoing can just as well turn into a negative storm of media publicity as
any positive achievement might create a fan hysteria for our erstwhile celebrity.
Most importantly, however, it seems to be a philosophical reason why the rich and successful are
admired so much more these days. After all, it is largely due to the uncertainty and lack of
transparency of our convoluted and confused world, that people turn so readily to any idol
they can possibly find in order to alleviate for themselves the pressure that the lack of
orientation creates for them. So, in a way it is probably fair to argue that more than ever the rich and
famous have become the high priests of spiritual or non-spiritual guidance for those of us who
desperately look for a sure footing in this murky environment. And it, obviously, follows from this that the
remuneration for seemingly having found the much coveted route to redemption is increasing ever so
dramatically.
Now, should governments intervene and stop this increasing wealth divide from happening? Of course,
they should. But it shouldn’t be by way of a mindless redistribution that in the end isn’t going to help
anyone that subject government should make their weight felt. Instead, it should be by way of a profound
educational reform that some of these aforementioned imbalances are mitigated. After all, it is quite
possibly due to an overly abstract and academic education that most people feel that they haven’t
learned enough to stand on their own two professional and entrepreneurial feet and whine about social
injustice instead.
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| Keywords: growing divide between rich and poor, wealth divide between rich and poor, wealth divide is the result of a neo-liberal onslaught, the rich get richer and the poor get poorer, redistribution of wealth, higher taxes for the rich, planetary mass market favors the rich, multiplying effect of the media favors the rich |
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