However you parse the data, capitalism increasingly appears to disproportionately benefit the very top performers.
Jeff Bezos, the CEO of the company millions depended on for deliveries during coronavirus lockdown, is reportedly set to become the world’s first trillionaire. As forecast by business platform Comparisun, his unique status isn’t due to the current crisis. It is based on a continuation of growth trends in Bezos’s net worth over the past five years, which show increases of about 34 percent annually. In other words, it is the latest addition to the eye-popping study in contrasts that the world economy has become.
The growing concentration of wealth at the top has led prominent American politicians on the left, such as US Senator Bernie Sanders, to proclaim that billionaires, by rights, should not exist. How, then, would they account for Bezos’s almost unimaginable prospective wealth?
The global “superstar economy”
Some have chosen to blame crony capitalism. In this analysis, the most fortunate few have co-opted the political system – which was designed to rein them in – with their dollars and influence. Favour-paying on the part of compromised politicians would certainly help explain the penchant for deregulation that has prevailed on both sides of the aisle in Washington, DC in the last 40 years.
There is a big problem with this theory, however. The general trend towards rising inequality, resulting in more and more goodies jammed into the already bulging pockets of a few “superstars”, is not limited to the United States. It is distinctly seen, though to a lesser extent, in Australia, Canada, China and the United Kingdom among others. Unlike the US, these countries do not have a multi-billion-dollar per year lobbying industry aimed at influencing public policy for the benefit of corporate clients.
Source: Peter Levell
Inequality within nations, though, is just the tip of the iceberg. The rise of a few superstars relative to everyone else is a pattern so firmly etched into the broader economy that it seems to show up virtually any way you parse the data. Just look at how the centre of gravity has shifted dramatically upward in a number of industries. In 1982, for example, 26 percent of total ticket sales for live concerts went to the top one percent of music-industry earners; by 2017, the one-percenters’ share had more than doubled to 60 percent. Within the publishing industry’s top ten global bestsellers of the last 50 years, the Harry Potter series – which ranks #3 altogether, right behind The Holy Bible and Quotations from Chairman Mao Tse-tung – has moved more copies than #4-10 combined.
Income gaps between occupations have also grown globally. The difference in wages between, say, an engineer and a schoolteacher is significantly greater now than it was in 1980. Even within certain professional-class occupations paying well above average, e.g. physicians and college professors, the distance between rungs at the very top of the income ladder has increased. In these sectors, inequality has infiltrated the top one percent, elevating the mega-elite 0.1 percent above the rest.
Read the rest of Morten Olsen’s article here at INSEAD Knowledge