As the rich keep getting richer, the warning signs are starting to appear.
According to a financial magazine's survey of the extremely well-off, the seriously wealthy and the obscenely rich, Australian mining magnate Gina Rinehart made $24 billion in the past year.
As Rinehart's getting richer at the rate of $1.3 million every 30 minutes, the magazine reckons she's on track to become the world's richest person and accumulate a fortune of around $130 billion. Coincidentally that's almost exactly the amount of cash Apple has sitting in the bank.
British soldiers in World War I had a song that went, "It's the same the whole world over: it's the poor wot gets the blame, it's the rich wot gets the gravy. Ain't it all a bleedin' shame?"
You might wonder what's changed. The wealth gap between Rich Listers and those at the bottom is starting to resemble that between medieval dukes and the peasants on their estates.
In Europe, 25 million people are unemployed. In Spain and Greece half of those aged between 16 and 24 are out of work and in Ireland, Italy and Portugal a third, raising fears of a "lost generation" with bleak prospects and no option but to sponge off their parents.
Speaking of blame and gravy, last week International Monetary Fund chief Christine Lagarde declared she had little sympathy for jobless Greeks demonstrating against austerity measures, because their tax dodging had helped bring about the crisis.
No sooner had Lagarde delivered this home truth than it emerged that she pays no tax whatsoever on a salary package of $730,000 because of her diplomatic status.
There are a few variations on the catchphrase, "the rich get richer and the poor get poorer," but Indian statesman Jawaharlal Nehru's version is particularly relevant in the current circumstances: "It may be said that the forces of a capitalist society, if left unchecked, tend to make the rich richer and the poor poorer."
The operative words are "if left unchecked".
A jaundiced take on the last few decades would be that, freed from government oversight and restraint, capitalism has made a handful of insiders extraordinarily wealthy and in the process pushed the global economy to the brink of collapse.
Now the inevitable backlash has started. France's new socialist president, Francois Hollande, plans to take steps to ensure that the highest-paid executive in companies in which the state has a majority share cannot earn more than 20 times the salary of the lowest paid worker.
This will mean pay cuts of up to 70 per cent for the bosses of companies such as energy giant EDF. (Hollande and his Cabinet have cut their own salaries by a third.) He also plans to increase the tax rate on incomes of more than €1 million ($1.64 million) to 75 per cent.
It will be interesting to see how this plays out. The standard justification for paying senior civil servants and heads of state-owned enterprises huge salaries is that the state is competing for talent with the private sector. Besides, what's a few hundred thousand if their management skills and leadership make the organisation more efficient and productive, thereby saving the taxpayer millions?
And if we wound the clock back to the 1960s and 70s, we'd find plenty of examples of "soak the rich" tax regimes.
Most countries came to the conclusion that they were counter-productive.
They discouraged entrepreneurial activity and didn't generate much extra revenue since high earners either moved to greener pastures or went to even greater lengths to minimise their tax liability.
Where do the politics of fairness end and the politics of envy begin?
Yes, it seems surreal that a corporation can be sitting on cash reserves of $130 billion, but is that a reflection of Apple's greed and deviousness or its innovation and superb marketing? And how much wealth have Apple products generated for those who use them?
But if the very rich don't want to be targets, they'd be well advised to improve their PR. They have a tendency to place a moral value on wealth, a position that doesn't bear much scrutiny and is a short step away from attributing poverty to poor people's moral shortcomings.
I guess it's easier to be callous about the disadvantaged and the effects of poverty if you believe poor people have only themselves to blame - that they're poor because they are lazy, feckless, self-indulgent or morally defective.
But for every wretched, addled bludger whose neglect or worse causes a child to suffer, there are hundreds of parents who work ferociously hard and go without to give their children a chance of a better life.
And while the super-wealthy can insulate themselves from the social consequences of glaring inequality and poverty, the rest of us have to live with them. But we are the majority.
Tags: Wealth, Middle Class, Poor, IMF, World Bank, Elite, Unemployed, Corporates, Banks,
Location: New Zealand (load item map)
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