Inequality – 2016

Capitalism is inequality, most people understand that. Those who steal your surplus value amass a fortune while you tend to have enough to keep you fit enough to keep supplying that surplus value and to create the next generation of workers. To many workers, while this may not be ideal, it is something that they are prepared to live with (and even defend) so long as there is a little recreation and comfort for them – and here lies the rub. Nothing stays the same; and while the richest of the super-rich are shot into fabulous wealth beyond the comprehension of most of us, the poorest are propelled backwards into the direst poverty with all points between these two poles moving in one or the other direction.

An Oxfam report published in January and titled ‘ An Economy For the 1%: How privilege and power in the economy drive extreme inequality and how this can be stopped’ tells us that on a world scale there are 62 individuals whose wealth has increased by $1.76 trillion over the last 6 years, who now own between them the same wealth as the poorest 50% of the world’s population.

In 2010 the number of the ultra-rich (who could equate their wealth to the lowest 50% was 388. The number has been dropping each year since then. Of course, as the world population expands (by approximately 400 million between 2010 – 2016) so too does the actual number of people who make up that 50% of humanity at the bottom of the ‘wealth table’, so a truer picture of the inequality of our world necessitates comparing the actual exact number of people who made up the lowest 50% in 2010 as opposed to now. That would of course be impossible owing to the ever-changing number of humans on this planet, so we must settle for a rough figure of 3.6 billion people today. At the other end, however, the decreasing group which owns as much as the lowest 50% can be calculated fairly accurately and at the moment they could all fit into one standard coach. How long before this elite group needs only 1 taxi to fit them all in?

This does not mean that these are the only people getting very rich, but their wealth is growing so fast while that of the 50% is decreasing at an alarming speed (the 50% are roughly 1 trillion dollars poorer now than in 2010) as a result of which we need fewer and fewer of the rich to complete the equation: ‘number of super rich whose wealth equals that of 50% of poorest =?’.

The report also states that ” Oxfam’s prediction – made ahead of last year’s Davos – that the 1% would soon own more than the rest of us by 2016, actually came true in 2015, a year early. ”

In Britain, one of the wealthiest countries in the world, the richest 1% have ‘accumulated’ as much wealth as the poorest 55% of the British population, according to an official analysis by the Office for National Statistics (ONS) of who owns the nation’s £9.5tn of property, pensions and financial assets. Last year Oxfam also stated that five billionaire families controlled the same wealth as the bottom 20% of the population. ” It is further evidence of increasing inequality at a time when five rich families have the same wealth as 12 million people,” Rachael Orr, Oxfam’s head of poverty in the UK said. Showing the quaint faith in the ability of the parliamentary hirelings of the wealthy to change this state of affairs, a faith that mars much of Oxfam’s work, she added ” We need our politicians to grasp the nettle and make narrowing the gap between the richest and poorest a top priority. It cannot be right that in Britain today a small elite are getting richer and richer while millions are struggling to make ends meet .”

In a study of average incomes of individuals released by the ONS in 2015, it is revealed that those in the bottom 10% of the population have on average a net annual income of £8,468. The top 10% have net average annual incomes of £79,042, almost ten times as much. The group with the 9^th highest incomes are making only 60% of the top 10%’s income and if we look at just the top 10%, the top 1% have incomes substantially higher than the rest of those in the top 10%. In 2012, this top 1% had an average income of £259,917, and the top 0.1% had an average income of £941,582! If we then break the total income in Britain into five groups we find that the poorest fifth of society have only 8% of the total income, whereas the top fifth have 40%. This is not surprising or unusual in class society and we recommend for a better understanding of classes in modern Britain that the reader should study ‘A class analysis of British society at the start of the 21st century’ – Parts 1 and 2, Lalkar, March/April and May/June 2014 issues.

In its latest report Oxfam is calling for urgent action to tackle the inequality crisis and reverse the dramatic fall in wealth of the poorest half of the world. It is urging world leaders to adopt a three-pronged approach – cracking down on tax dodging, increased investment in public services and action to boost the income of the lowest paid. As a priority, it is calling for an end to the era of tax havens which has seen increasing use of offshore centres by rich individuals and companies to avoid contributing their fair share to society. This, Oxfam claims, has denied governments valuable resources needed to tackle poverty and inequality. Not only the 62 super rich but all of the wealthiest 10% and their minions in Parliament, the media, the law courts etc., etc., are well aware of all this, but have no intention of doing anything about it except mouthing some weasel words or passing the odd toothless law. Capitalism will not cease to be capitalism because someone points out to those who run and benefit from the system that it’s not very fair to the majority. Luckily, as more and more of the upper strata of the working classes, the ‘labour lieutenants’ of imperialism as Lenin called them, and other workers who are reasonably comfortable, are kicked down lower and lower, the resentment and anger that they have helped to contain will, with the correct leadership of a class conscious and militant Marxist-Leninist party, sweep this miserable system and its exponents away.

Meanwhile, looking further at the very useful information contained in this and other reports on inequality, we can see the regional differences in wealth and wages which also make for some interesting reading. It would surprise very few to learn that an average household in the South East has almost twice (183%) the amount of wealth of an average household in Scotland. However, when it comes to looking at both wealth and income across the regions it is the North East that is poorest followed by Yorkshire and West Midlands, all more impoverished than Scotland. The wealthiest regions are London, the South East, the East, the South West, and the East Midlands with the North West in the middle. London and the South East, however, (although this is true to some extent in all regions) sees extreme wealth and extreme poverty living side by side. Many working people living in London feel that they are being squeezed out of London, something that both the openly racist and the not so openly racist bourgeois parties blame on immigrants. The poor in Britain, wherever they were born, do not make fiscal policies or dictate rents/house prices, those things are the prerogative of the wealthy!

This graph below is from a report on households in poverty, 2012-2014, released by the ONS:

The following graph is from the Households Below Average Income (HBAI) report and shows the percentage of wealthiest and poorest in each region for the 12 month period 2008-2009. As we know that the wealthiest have seen their wealth increase while the poorest have seen any wealth disappear, it is fair to assume that these figures are still reasonably representative. There are many thousands in Britain who are now only one benefit cut, one job loss or one rent/ fuel/ food price hike away from a life of abject misery on the streets. It should be noted that inner London is the highest in both the richest and poorest fifths.

Region	Percent
	In the poorest fifth	In the richest fifth
East	18%	22%
East Midlands	20%	16%
inner London	29%	28%
outer London	24%	28%
North East	21%	14%
North West	21%	16%
Northern Ireland	18%	14%
Scotland	17%	20%
South East	17%	27%
South West	18%	19%
Wales	20%	16%
West Midlands	22%	17%
Yorkshire and The Humber	21%	15%

In the annual Family Spending Review for 2014, published by the Office of National Statistics in 2015 it was revealed that the country’s richest 10% spend as much on alcohol and cigarettes in a week as the poorest spend on gas and electricity. While the average weekly household spend was found to be £531.30, there was great variation of this amount between the highest and lowest earning 10% – £1,143.40 and £188.50 per week respectively.

Those at or near the bottom of the lowest 10% would find the average sum of the lowest 10%, £188.50, itself to be a princely sum.

The richest 10% of households spent more per week on furniture – £43.40 – than the poorest spent on food – £30.40.

And the highest-earning 10% also spent more on wine per week – £8.70 – than the amount the lowest earners spent on their water bills – £6.90.

Duncan Exley, director of the Equality Trust, displaying the same political short-sightedness as his Oxfam counterparts condemned the figures as an indictment on politicians’ ” inability to grasp how unequal Britain has become”. “It’s not only the poorest who are affected. The rungs on the ladder have grown further and further apart, making it harder for all ordinary people to get on.”

” It’s going to take everybody to take their part. Policy makers and politicians from all different parties need to look at the reality of life for people living on very low incomes who have to choose between heating the house or eating breakfast ,” said Adrian Curtis, director of UK food banks at The Trussell Trust. Actually, Mr Curtis, it is going to take enough working class people to realise that revolutions are not just something that happened in history and to understand that they need to work under the direction of a solid Marxist-Leninist party to bring down this unjust and illogical system that wastes talents, resources and lives in the pursuit of maximum profits for a very small handful of greedy people.