Wealth is Concentrating Too Fast to Keep Up

Remember the Oxfam report early last year that found sixty-two individuals owned as much wealth as the entire bottom half of humanity put together? It’s gone down to only six — that’s right, six — in the past year: Bill Gates, Warren Buffett, Jeff Bezos, Amancio Ortega, Mark Zuckerberg, and Carlos Slim Helu. The total wealth held by those individuals increased in that time from $343 billion to $412 billion — a 20% increase in one year — bringing their total wealth to an amount equivalent to the total wealth of the bottom 50% of the whole human race.

From sixty-two to six. That’s an astonishing increase in the concentration of wealth: especially in just one year. Sociologist Robert Merton coined the term “Matthew Effect” — “unto every one that hath shall be given” — almost fifty years ago in reference to the phenomenon of the rich getting richer. But never has this concept been so clearly illustrated as it is today. Six people who could carry on an intimate living room conversation are as rich as almost four billion people.

How could this happen? The usual right-wing suspects, professional defenders of what they call “our free enterprise system,” are doing their utmost to reassure us there’s nothing to see here. But the fact that progressively larger shares of wealth are concentrated in fewer and fewer hands should suggest to even the most unobservant that “our free enterprise system” isn’t really very free at all.

As a character in The Illuminatus! Trilogy, by Robert Shea and R.A. Wilson, explained:

“Privilege implies exclusion from privilege, just as advantage implies disadvantage. In the same mathematically reciprocal way, profit implies loss. If you and I exchange equal goods, that is trade: neither of us profits and neither of us loses. But if we exchange unequal goods, one of us profits and the other loses. Mathematically. Certainly. Now, such mathematically unequal exchanges will always occur because some traders will be shrewder than others. But in total freedom— in anarchy— such unequal exchanges will be sporadic and irregular. A phenomenon of unpredictable periodicity, mathematically speaking. Now look about you…and you will not observe such unpredictable functions. You will observe, instead, a mathematically smooth function, a steady profit accruing to one group and an equally steady loss accumulating for all others. Why is this…? Because the system is not free or random, any mathematician would tell you a priori. Well, then, where is the determining function, the factor that controls the other variables…? Privilege… When A meets B in the marketplace, they do not bargain as equals. A bargains from a position of privilege; hence, he always profits and B always loses.”

Equal exchange — that is, exchange between equals — is a positive-sum transaction in which neither party benefits at the other’s expense. Privilege is just the opposite. For every guy who gets a dollar he didn’t work for, Wobbly leader Big Bill Haywood said, there’s another guy who worked for a dollar he didn’t get. The reason is that the exchange isn’t between equals. One party is able to benefit at the other’s expense because they are unequal in power; one of them has the power of the state at their back.

If you look at the richest people and largest corporations in the world, you will find that their wealth comes not primarily from producing things, but from controlling the conditions under which other people are allowed to produce. That’s right — they collect rents for the “productive service” of not obstructing productive activity by other people.

Most of the world’s food is not grown by people feeding themselves on their own land or cultivating their land to produce food for others. It is grown by people working land — most of it stolen — owned by other people who demand tribute for access to it. Most of the world’s manufacturing corporations no longer manufacture anything themselves. They outsource actual production to independent sweatshop employers, and simply use their ownership of “intellectual property” — patents and trademarks — to enforce a monopoly on sale of the finished product. And the biggest concentrations of wealth of all come from the state-granted privilege of lending the circulating medium into existence and advancing credit against future production: a function that, absent bank licensing and legal tender laws, could be performed by the producing classes themselves advancing credit against each other’s future output.

The Gateses and Buffetts of the world, in obtaining their wealth, are every bit as much a beneficiary of the state as any feudal landlord or Soviet commissar.

Translations for this article:

Free Markets & Capitalism?
Markets Not Capitalism
Organization Theory
Conscience of an Anarchist