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The rich really are getting richer

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A recent report by Oxfam SA states that the wealth of three South African billionaires is equal to that of the bottom half of the country's population. This ratio is slightly higher than the global average: the world’s eight richest men own the same wealth as the poorest half of the world.

rich getting richerIt seems slightly grotesque – eight men enjoy the same earnings as 3.6 billion people. And of those 3.6 billion people, most are going to bed hungry. One in nine people on the planet do not earn enough to feed themselves.

“It is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day,” said Winnie Byanyima, executive director of Oxfam International. “Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy.” It’s no wonder that Oxfam predicts a slow rolling back of globalisation as the world’s poverty stricken nations start to look inward in order to improve their financial situations.

Proponents of capitalism made a half-hearted attempt at defence after the report was released. Mark Littlewood, Director General at the Institute of Economic Affairs, was one of these. “Once again Oxfam has come out with a report that demonises capitalism, conveniently skimming over the fact that free markets have helped over 100 million people rise out of poverty in the last year alone,” he said.

That seems a poor argument against that stark fact that eight men have a combined net worth of $426-billion, while impoverished families live on as little as $10 a day. For the 100 million people that have “risen out of poverty”, billions more are suffering as the free market system helps the rich get richer.

Oxfam used Forbes’ ranking of global billionaires and wealth data from Credit Suisse in order to reach its conclusions. Locally, it made use of data made available by the JSE. 80% of the bottom half of the world’s population are adults living in Africa and India, and South Africa and India are two countries where an even tinier percentage of the population owns the bulk of the country’s wealth.

“Such inequality is the sign of a broken economy, from global to local, and lack of will from government to change the status quo. Governments, including the South African government, can act to help everyone not just those at the top. They can build an economy where businesses pay their taxes and contribute to the wider good; where everyone is able to be healthy and educated, and where poverty wages are a thing of the past,” said Oxfam SA executive director Sipho Mthathi at the media briefing when the report was released.

This noble sentiment sounds like a fairy tale or daydream in light of South Africa’s – and the rest of the world’s – losing battle to fight inequality. While race relations is too often the focus of our economic and political landscape, the Oxfam report points to a bleaker interpretation that has more to do with the fundamental economic makeup of the free market-following world.

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