While many workers around the world are struggling, not only to avoid infection from the coronavirus, but to keep their heads above water financially, the world’s super-rich are still coining it in.
On April 9, The Guardian reported on British hedge funds making billions of pounds by ‘betting’ on the stock market decline during the virus outbreak. Crispin Odey, a Brexit supporter who also made millions betting against the pound in the run up to the EU referendum, told the Guardian that his fund had made “its biggest monthly gain since the financial crisis.”
Francis O’Grady, TUC general secretary, was absolutely right to complain that “It’s a sign of our broken economy that hedge fund managers are raking in billions, while care workers who are putting their lives on the line can barely scrape by.”
Forbes 400 gorge themselves
A care home manager on BBC TV complained about price gouging – with packs of surgical masks he needed to buy for his staff going up in price from £5 a time to £75. Someone somewhere is making a mint from the self-sacrifice and heroism of others.
But it’s not only the British super-rich who are still busy making lots of money. According to CNN, the US news channel, billionaires over there are also getting more rich from the pandemic. It is just like the aftermath of the 2008 financial crash, after which only the top 20% of US households fully recovered their prior wealth. Those in the Forbes 400, the wealthiest 400 billionaires in the United States, recovered all their wealth within only three years and within another decade had increased it again by over 80%.
Bezos makes more than whole countries
Already, CNN reports, the combined wealth of US billionaires is higher than a year ago. At least eight of these billionaires have added another $1 billion to their wealth during the pandemic. “Among these ‘pandemic profiteers’ are Zoom CEO Eric Yuan and Steve Ballmer, former CEO of Microsoft, which owns Skype and Teams. Both Yuan and Ballmer are profiting off the boom in video-conferencing…But no one has benefited as handsomely as Jeff Bezos of Amazon, who has seen his wealth skyrocket by $25 billion since January 1 as homebound customers lean heavily on online shopping, grocery delivery and streaming.”
Nearly a third of UK in poverty
This wealth surge for one man, CNN points out, is greater than the entire GDP of Honduras, and probably many other small nations, and is unprecedented in the history of modern capitalism.
Meanwhile, at the other end of the social scale, poverty is increasing. In Britain levels were already high after a decade of austerity. Official data shows that more than 14 million people in the UK are classed as living in poverty, or nearly one-quarter of the population. Some 4.2 million children are poor, or around 30 percent of the total, official government figures show.
It is more than likely that the pandemic will mean hundreds of thousands of workers permanently losing their jobs, with only Universal Credit – a miserably low income – to fall back on.
According to Louisa McGeehan, a director at Child Poverty Action Group, “If families who were earning decent wages before the pandemic move on to the Universal Credit, they will very suddenly find themselves living in poverty,”. She added that the demands of online education have only added to the problem. She noted that many families with children were stuck at home and that schools were posting lessons on line. However, “If those children are in households who don’t have Internet or don’t have a computer, they are not able to do that learning…We have a nation where a child poverty crisis has been amplified by the impact of coronavirus.”
US poverty increasing
In the USA too, the pandemic is increasing poverty. The Poverty Centre of Columbia University is projecting that if the unemployment rate there increases to 30 percent, as has been suggested for the second quarter of the year, then one poverty rates “will increase dramatically.”
“If the 30 percent unemployment rate persists throughout the year”, they have said, “we project that annual poverty rates will increase from 12.4 percent to 18.9 percent. This projected poverty rate represents an increase of more than 21 million individuals in poverty and would mark the highest recorded rate of poverty since at least 1967, the first year for which we have reliable estimates…”
“fair shares” is not enough
In her Guardian comment (above), Francis O’Grady added that, “When the immediate crisis has passed, we need to rebuild a more equal economy. The super-rich must be made to pay their fair share and ordinary workers should get the respect and pay they deserve.” There is no doubt that this reflects the sentiments of the big majority of TUC union members. But it is not enough. It is not just a matter of “fairer shares”.
It is the internal dynamic of a rotten system that impoverishes the big majority of the population while a tiny minority are enriched. It reflects a process inbuilt into the DNA of the so-called ‘market’ system. TUC leaders and Labour leaders should not be calling for a “fairer” capitalism because such a beast doesn’t exist. They should be fighting for a different system altogether, one in which the overwhelming majority of the economy – the main levers of production, distribution and exchange – are not the playthings of a few billionaires, but are owned in common and democratically run and managed for the benefit of all, and not a few dozen Masters of the Universe at the top.
April 30, 2020
