Concentration of Wealth and Its Remedy

Concentration of Wealth and its Remedy

To paraphrase Winston Churchill, “Never in the field of human endeavour has so much wealth been created by so many for the accounts of so few.” The figures are at once astonishing and disgusting: 10% of people own 76% of all the wealth in the world, while the bottom 50% own about 2%. In Europe the top 10% own 58% of wealth, in North America 70%, in Latin America 77%, in East Asia 68%, in Russia and Central Asia 73%. From 1995 to 2021 the share of global wealth held by billionaires rose from 1% to 3%. (reference: World Inequality Report 2022- Chancel, Piketty, Saez, Zucman). No doubt, anyone who encounters these facts is hit with the discouraging feeling that something is wrong in the world but regrettably, cannot identify exactly what. This essay posits that the cause of the incredible wealth concentration is the wrong attribution of ownership of what is created. The attribution is wrong because two true rights- not the UN version- are not included in the economic system.
Uncovering these rights is not difficult but requires thinking outside the box. As with any objective analysis of fundamental rights it begins with the equal status of all persons as human beings, which follows from their entry into the world by the same indiscriminate process of Nature. (Or remember the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal..”). As a consequence, the claim of any person on what Nature provided is equal to any other person, as with a lifeboat of people of equal status that arrives at an uninhabited island. It is a short step from equal claims to conclude that whatever Nature provided in a country is owned in common by all the citizens. Therefore, when a business extracts a commodity from beneath the ground it is not ownerless. If the business wants to sell the commodity in a market, it must first buy out the equity of every citizen in the country. Each person, from a baby to the most elderly, will therefore receive a regular income as a dividend from their equity in the natural resources of the country. A portion of the wealth from natural resources will then accrue to where it rightfully should. Furthermore, if a citizen is required to fight for his country he risks his life for a territory in which he has substantial equity and not just to protect the holdings of a wealthy few.
The second fundamental right is also deduced from the equal status of all people (as human beings). Whatever they bring into existence or change is a manifestation of themselves and their power, both physical and mental. Logically, they have the strongest claim to ownership of what they create. Currently, the claim is generally not recognized. An exception is the judicial system, which believes that the individual person owns the deed that is against the law, but the capitalist system does not acknowledge that the individual person owns the positive deed that produces something new or improves an existing object or condition. Instead, the system claims ownership of everything of value created by the employee. Of course, the total created daily by business is immense and fully owned by the business owners. Acceptance of the right of a person to ownership of what he/she created would result in a dual equity system whereby the business owners would own the premises, tools, designs, raw materials, utility supplies, and production directives while the employee would own whatever of value he/she produced by the owners’ facilities. The pay to the employee should basically be a negotiated amount that accounts for the value of the employee’s production at the factory door, less the estimated value of the business owners’ contribution to production (they have a valid claim). The result would be an equitable division of the profit created by the business. Ideally, both parties end up with the wealth they deserve. If such a system had been in place at Microsoft, for example, Bill Gates would have far less money while the people who wrote the millions of lines of computer code would be rich also.
It could appear that business owners would only lose by this dual equity system that rewarded them less. Their profit from production could be limited by a formula of division with employees that could also include compensating them for their affiliation and commitments to the company and for the responsibilities they shoulder on the job. However, the labour cost would only be for actual production. Therefore, when production falls for lack of orders or other factors, the production cost would automatically fall as well. The net result would be less short term gain but more reliable gain in the long term and less vulnerability to “dry spells”.
In the nineteenth century, slavery was terminated when legislators accepted that a person owned himself/herself. The economic system in the American South had to adjust. In our century, the right of a person over what he/she creates and common ownership of Nature are not yet recognized and accepted. That lack allows business owners to accumulate fantastic wealth by assuming ownership of all wealth created by both Nature and human endeavour. They pay the creators of the wealth on a time basis, the same measure of human contribution that was used during the time of slavery. If the identified rights were implemented, the created wealth would be divided in proportion to what people truly earn, which would be a serious impediment to the concentration of wealth in an adjusted economic system.

Filed under: Uncategorized | November 20th, 2022