But a roaring 20s is actually happening, just not for most of us. According to Oxfam’s annual inequality report, released to coincide with the World Economic Forum meetings in Davos, the richest 1% of people have captured nearly twice as much new wealth as the rest of the world combined since the pandemic. Their fortune soared by $26tn, increasing their share of new wealth from 50% to two-thirds.
The breakdown of these figures exposes how on a global basis, extreme wealth is accumulated not by innovating or increasing production, but by taking advantage of rising prices and exploiting labour. In this effort, wealthy people are enabled by lack of regulation and taxation. The result is a bonanza of plunder with no sheriff in town.
This has been happening for a while, but the pandemic accelerated the trend. Rich people benefited from everything – every positive intervention from the state and negative impact of the crisis somehow still ended up increasing their wealth. They benefited from rising costs by using them as an alibi to charge higher-than-inflation prices, then distributing the rewards as dividends instead of higher wages. Food and energy corporations made a killing, making $306bn in windfall profits in 2022, then distributing 84% to shareholders.
They benefited from stimulus packages that pushed up asset prices. They benefited from low interest rates that helped them to expand their property empires. According to Credit Suisse, lower interest rates and government support programmes resulted in “a huge transfer” of wealth from the public sector to private households, which saw their debts lowered and the value of their assets, shares and properties, rise.
The obscenity of the system is made possible by the dramatically diminished bargaining power of labour. Weak labour is cheap labour. More lucratively, the world’s workers can increasingly be mobilised according to employers’ precise needs, so not a penny is wasted. The purpose is to transform the human worker into a machine that can be switched off when not in use (although at least machines are tended with maintenance). In 2020, Amazon’s UK sales soared by half to £19.4bn. In 2021, an investigation in Britain found that the company was bypassing its own employment standards by hiring thousands of zero-hours workers through agencies. These workers have no employment protections, their shifts can be cancelled at the last minute, and there is no guarantee of tenure of employment.