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From The Socialist newspaper, 14 April 2000

The Fat of the Land

TONY BLAIR claims that he intends to abolish poverty in Britain within 20 years. The Sunday Times Rich List 2000 suggests that the opposite is happening - the gap between wealth and poverty is widening. ROBIN CLAPP writes.

THE MILLENNIUM fireworks may have long dimmed, but the champagne corks keep popping for the world's mega-rich.

Just three rich men now possess total assets greater than the combined annual production (GDP) of the 43 least-developed countries, with a population of 600 million.

For Microsoft's Bill Gates, whose wealth had jumped from £36 billion to £53 billion in just 12 heady months, the recent publication of the 'Sunday Times Rich List 2000', is a confirmation that Eden on Earth has indeed been reached.

The world's richest 20% now consume 86% of all goods and services produced, but in the shadow of this opulence lie the stifled lives and tears of millions, the poorest 20% who consume just 1.3% of production.

On a planet where great technological advances are trumpeted daily, two billion people still lack access to safe sewers, while a further billion rely on polluted drinking water for survival.

Capitalism's rapacious appetite for profit has never been more intense. The reintroduction of private ownership into Russia and Eastern Europe following the collapse of the Stalinist planned economies, provided vast new opportunities for exploitation.

Former Soviet bureaucrats become dollar millionaires and Western companies seek to grow rich through the plunder of raw materials and the exploitation of cheap labour forces, but according to UNICEF capitalism has blighted the lives of over 100 million children through war, disease and social turmoil.

In this new century more than 80 countries have a lower income per head than they did in 1990. The gap between the income of the richest 20% and the world's poorest has widened to a ratio of 74 to one.

Such a staggering disparity between wealth and poverty has never been seen before and is the most eloquent testimony to the need to rid the world of capitalism.

THE SUNDAY Times 'Rich List 2000' confirms that under Tony Blair, Britain is a bosses' paradise, with ten new millionaires graduating every week and even billionaires becoming passť. There were just nine in 1989, now there are 26.

The authors comment: "Britain's super-rich have never had it so good. The collective wealth of the top 1,000 has reached almost £146 billion, a rise of more than £31 billion on last year's list, or 27%."

It is in the new economic fields of software, the media, mobile phones and the Internet, that most wealth creation has taken place in recent years.

Setting the pace in the wealth charge have been the dot.com internet companies, which through flotation on the stock exchange magically and instantly produce unbelievable paper wealth. British Internet millionaires have risen from 10 to 63 in a year.

Martha Lane Fox's lastminute.com which The Economist rightly called a "glorified travel agent" found itself worth £732 million after one day's trading. Rising to a paper value of £845 million, the current value has since fallen to just £481 billion. Yet this firm is not expected to make any profit until at least 2004.

"It's all so click and easy" observe the authors of the Rich List before warning that "the Internet frenzy with its mad spiralling share prices is a classic example of an unsustainable bubble economy that may burst tomorrow."

With the stock exchanges conjuring ever greater paper wealth for the coupon clippers, little attention is given to the irrationality of a system that tolerates Microsoft making £20 million profit daily, while stealing the same amount from sub-Saharan Africa through debt repayments.

The super-highway is to remain a closed road to the world's 160 million moderately or severely malnourished children.

The Rich List lifts the lid on the lifestyle of the international capitalist class and in so doing exposes the hollow claims of Blair and others that the market is the route to wealth for all.

In 1988 in the US, the average salary of a chief executive was 40 times that of the average employee. A decade later the differential had risen to 400 and is still growing.

IN BRITAIN too, the party goes on for the bosses of the 30 largest companies, who sit on personal profits of over £100 million. This is thanks in part to share options, which let them snap up shares at bargain prices.

The top 1% in Britain own almost 20% of all wealth, the bottom 50% just 7%.

Privatisation has fuelled this gravy train. The hated private rail companies are more heavily subsidised than under state ownership. In 1998 a rolling stock company, deliberately undervalued at the time of its sell-off, was put on the market again. It netted its former managing director an instant profit of £34 million.

The wealth transfusion has never surged stronger. Changes to National Insurance (NI) have meant that those in work between 1980-1997 paid £5.6 billion more NI. On the other hand companies coughed up £5.6 billion less!

Britain's 1,000 wealthiest men and women are believed to have more than £108 billion stashed away and, according to the Independent, just 1,048 people control through their directorships, companies worth £1 trillion (£1,000 billion).

These are the puppet-masters pulling Blair's strings, who dictate to Gordon Brown that business taxes must be cut further, though collectively they still owe £14 billion in unpaid corporation tax.

Attacks on 'welfare scroungers' come raining down, but wealth scroungers are grovelled to. Since June 1987, Murdoch's News Corporation has made over £1.4 billion profits but paid no British corporation tax whatsoever.

He should have paid at least £350 million in this period, enough to build seven new hospitals, or 300 primary schools.

The lasting legacy of the Thatcher/Major regime was the vandalising of the welfare state, and the denouncing of the 'undeserving' poor. The consequence was that the number of people living in poverty tripled in 18 years and now stands at 14 million.

Despite seven years of economic growth which have seen the number of millionaires leap from 6,600 (1992) to 47,3000 (1998), the poorest 10% of the population have gained no real benefits from this bonanza.

The much-heralded Working Families' Tax Credit again seeks to drive a wedge between deserving and 'undeserving'. Even Peter Kilfoyle, the MP for Walton and former Blair loyalist, has lambasted the recent budget for not getting to grips with the widening wealth gap in Britain.

BLAIR MAY claim that poverty in the north of England is diminishing, but a recent report by Richard Rogers says that in the most deprived areas of Liverpool, Manchester and other northern cities, local people are poorer than olive growers in Greece and Portugal.

Inner cities are becoming depopulated with unemployment twice the national average and early death rates a third above the norm. Many working-class estates are now 'food deserts' where people have to rely on high-price small shops in otherwise derelict precincts.

Social and health indicators highlight the poverty crisis. Health inequalities continue to worsen, with premature deaths becoming geographically concentrated in low-income areas, while young men without a known occupation are nearly four times as vulnerable to suicide as those in more affluent social classes.

Unskilled men's overall death rate has gone from nearly double that of professional men to almost three times as high in the last 30 years.

Unsafe working conditions, poor diet and ever-present stress all contribute to this damning statistic.

Bristol University's 'The Widening Gap' points out that if people in the worst health areas enjoyed the same health as those in the best areas, 71% of deaths under 65 years between 1991-1995 could have been avoided. This amounts to 10,000 lives.

An increase in winter heating allowance and an insulting 75p extra in pensions, cannot disguise the facts - 300,000 pensioner households are still without a telephone and more than a million rely on state pensions and benefits alone.

Nor is inequality narrowing among the young. Britain is the worst place to be a child in the EU according to a study by UNICEF, with four out of ten children being born into low-income households. Half of this figure live in workless households.

One of the most disgusting aspects of welfare reform has been the targeting of those receiving disability benefits. 6.1 million British adults receive some benefit, around half of whom are on sickness or disability benefit. While these people are scapegoated for 'workshy' tendencies, no attention is drawn to the £6 billion unclaimed in disability benefits in 1998 alone.

POVERTY IS not created by an inefficient welfare system. It's a consequence of a capitalist system which wastes resources and squanders the talents of millions of people. The Asian economic crisis of 1997 wiped out $2 trillion from annual world output according to the UN.

It further estimates that the annual additional cost of achieving and maintaining universal access to basic education, healthcare, reproductive healthcare, adequate food, clean water and safe sewers is roughly £25 billion.

The richest 1,000 people in Britain alone have enough wealth to provide that for the next four years. Expropriating the wealth of the richest 225 people on the planet could underwrite that commitment for 25 years (see article opposite).

The Rich List makes complacent reading for its beneficiaries. For the rest of us it's an indictment of a system where 1.5 billion exist on less than a dollar a day, while 300 multinational companies control world trade and wealth.

As Marx would have said, the point is to change it.

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In The Socialist 14 April 2000:

Fight Back Now!

Reject the Racist Lies

Crisis in the Car Industry - Double dealing Bosses

Rover: Where did all the money go?

MSF Activists say "Take over Rover"

The Fat of the Land

Can a wealth tax bridge the gap?


 

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