Pete Dolack on World Economic Forum in Davos


Pete Dolack writes the Systemic Disorder blog. He has written a must-read article on the Davos World Economic Forum. This article can be accessed by clicking here. Here below are some salient points he argues about.

The world’s rulers are getting together at their biggest bash of the year, the World Economic Forum. Prime ministers and other high government officials will also be in attendance.
The theme for this year’s Forum, which began on January 20 at its usual home in Davos, Switzerland, is said to be “Mastering the Fourth Industrial Revolution.”
It  is expected that there would be a global loss of 7.1 million jobs between 2015 and 2020. How much is a contributing factor like economic inequality for such loss of jobs? You may recall my article based on Oxfam report. Nothing illustrates the world’s incredible inequality better than the Oxfam report, “An Economy for the 1%.” Oxfam researchers calculate that the richest 62 people have as much wealth as the bottom 50 percent of humanity — 3.6 billion people! Among other conclusions, Oxfam reports:
  • The world’s wealthiest 62 people added US$542 billion to their net worth from 2010 to 2015, an increase in their composite wealth of 44 percent.
  • The bottom half of humanity in terms of wealth lost $1 trillion from 2010 to 2015, a drop of 41 percent.
  • The share of the global wealth increase since 2000 that has gone to the top 1% is 50 percent.
Are you aware that the CEO pay averaged 303 times that of the average worker in 2014? Although down from the 376-to-1 ratio of the peak stock-market bubble year of 2000, the current ratio is far bigger than earlier decades. Another way of putting all this in perspective is that CEO pay has risen 1,000 percent since 1979, while typical employee pay has risen 11 percent.
The financial industry acts as both a whip and a parasite in relation to productive capital (producers and merchants of tangible goods and services). It is a “whip” because its institutions bid up or drive down prices, and do so strictly according to their own interests. The financial industry is also a “parasite” because its ownership of stocks, bonds and other instruments entitles it to skim off massive amounts of money as its share of the profits. Financial speculators don’t make tangible products; they trade, buy and sell stocks, bonds, currencies and other securities, continually inventing new instruments to profit off virtually every aspect of commercial activity. An International Labour Organization paper found that the financial industry’s share of corporate profits doubled over the course of the 1990s and 2000s, reaching 44 percent of all corporate profits in 2002.
Consider also the fact that one of the most important reasons for increasing disparity is the use of tax havens. One estimate of the amount of money that is stashed in tax havens was $7.6 trillion at the end of 2014 — more than the combined gross domestic product of Britain and Germany. Another estimate is $8.9 trillion. And this not limited to the global North — Oxfam calculates that Africa’s wealthiest have stashed $500 billion in tax havens:
“Almost a third (30%) of rich Africans’ wealth … is held offshore in tax havens. It is estimated that this costs African countries $14bn a year in lost tax revenues. This is enough money to pay for healthcare that could save the lives of 4 million children and employ enough teachers to get every African child into school.”
Dolack concludes: “Let no billionaire be unheard” would seem to be a far more accurate slogan for the World Economic Forum to adopt."

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