The luxury hotel suites in Davos, a ski resort nestled in the Swiss Alps, filled with the world’s corporate and political elite for the 53rd annual World Economic Forum (WEF) in late January.
A certain air of unease was reported among the billionaires, executives, politicians, managers of international financial institutions, economists and academics in attendance. Klaus Schwab, the founder of the WEF, told reporters ahead of the conference that “economic, environmental, social and geopolitical crises are converging and conflating, creating an extremely versatile and uncertain future”.
Running the system might be a little more complicated than in previous years. But as is made clear by a recent Oxfam International report on world inequality, published ahead of the Davos summit, life for those at the top is nevertheless positively breezy compared to life for the rest of us.
In fact, the discrepancy between fortunes of the rich and poor has never been starker. Even for seasoned critics of capitalism, the headline statistic published by Oxfam makes the jaw drop in amazement. Of all the new wealth produced globally since 2020, two-thirds has gone into the pockets of the wealthiest 1 percent. And the powerful and privileged are amassing more wealth by the day—on average an extra US$2.7 billion is added to the fortunes of the world’s billionaires with each rotation of the Earth.
The inflationary pressures driving down living standards of workers last year resulted in ballooning profits for big businesses. This turned into record breaking payments to shareholders and bonuses for executives, which were then converted into private jets and super-yachts for the rich. It’s hard to get a sense of what this amount of wealth looks like with references to statistics and figures alone. Take a walk around the wealthiest postcodes of your city to view the sparkling new sports cars parked outside of mansions. Sales in luxury goods like designer handbags and Rolex watches are through the roof.
How is this possible? How can a few people accumulate such staggering amounts of wealth while the majority struggle to make ends meet? Marx had a simple term to explain this: exploitation. By this he meant the process of value extraction by bosses from workers. The wealth generated by those who perform essential labour to make the world run is controlled by the owners of industry—the capitalist class. Once that value is realised by the products of labour being sold, only a fraction of the wealth goes to those who did the work.