By C. ben-David
Orgy: “In modern usage, an orgy is a sex party consisting of at least five members where guests freely engage in open and unrestrained sexual activity or group sex.”
Wealth: “Wealth is determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts. Essentially, wealth is the accumulation of scarce resources. Specific people, organisations, and nations are said to be wealthy when they are able to accumulate many valuable resources or goods.”
The title of a recent piece by Jomo Thomas, former Speaker of the House of Assembly, an honourable and determined man who has never repudiated his communist/socialist ideological roots, An orgy of wealth says it all. For him, the differential accumulation of wealth is a gluttonous practice akin to people engaging in unbridled sex, often with strangers, an activity most people would consider degenerate or degrading.
Implicit in this world view is the assumption that the entire global system of capital accumulation is a wicked one that deserves to dismantled and replaced by the communal ownership of the means and ends of production. Jomo Thomas clearly wants the world to follow the utopian Marxist slogan, “From each according to his ability, to each according to his needs.”
Thomas is quite correct to point out that there is indeed massive income and wealth inequality all across the globe. The Gini index is a statistical measure used to gauge economic inequality by measuring wealth or income distribution. The coefficient ranges from 0 to 1, with 0 representing 0% and 1 representing 100%. A coefficient of 0 represents perfect equality, and a coefficient of 1 represents perfect inequality. The closer to 1 the coefficient is, the greater the inequality. If a country were to have a Gini coefficient of 0, that means that everyone would have the same level of wealth.
The United States has a very high Gini coefficient of 0.852; SVG’s is also high at 0.818; and Ukraine is the country with the most equitable distribution of wealth at 0.241. But neither Ukraine and nor SVG, with vastly different allocations of wealth of among its people, are wealthy countries which well illustrates that wealth or income inequality present very unclear pictures of the true extent of absolute wealth and poverty between and within countries.
This is why it is necessary to also look at what is called national net wealth, which is the total value of net wealth — assets minus liabilities — possessed by the citizens of a nation at a set point in time.
For example, the United States has a national net wealth of US$106 trillion dollars, the highest in the world by far, while our own SVG has a national net wealth of US$2 billion, one of the lowest in the world. This disparity explains why the United States has so many billionaires, some of them referenced by Thomas, and we have not a single one. It is also why China, the second richest country in the world, contains the billionaires listed by Thomas.
Thomas ignores such critical considerations perhaps because they show that even in countries with lots of wealth disparities like the United States, those near the bottom are far more wealthy than moderately well-off people in poor countries like Ukraine and SVG.
Instead, Thomas is content to hyperbolically couple what most of our people would consider nasty sex orgies with the accumulation of wealth. In doing so, Thomas makes at least three additional errors.
First, as usual, Thomas propagates the psychologically debilitating “politics of envy” based on the false assumption that the rich are getting richer and the poor are getting poorer by which he would also have us believe that the rich are getting richer off the labour of the poor who are thereby getting even poorer than they would otherwise be.
This is empirically false on several grounds and has been for generations in most parts of the world, including SVG where there are now far fewer poor people in absolute and relative terms than at any time in our history. With few exceptions, there are also far fewer poor people in the world compared to other socio-economic categories than at any other period of time.
The best example of this is China which has grown in wealth by leaps and bounds in the past three decades as the bitter yoke of communism has been gradually but systematically thrown off the shoulders of its poor. The result is that China, though still a totalitarian nation ruled over by the Chinese Communist Party, is destined to surpass the Untied States in national wealth in the next few years.
China is only the best illustration that the whole world continues to get richer all the time, much of it based on the ingenuity and innovation of the super-rich entrepreneurs Thomas tries to shame.
Yes, there are still pockets of chronic absolute poverty in many parts of Africa, Latin America, and Asia where recurrent droughts, warfare, government corruption, a lack of human and natural resources, and socialism continue to suck the life out of its oppressed people.
The reason so many of our own people are poor — something Jomo Thomas ignores — has nothing to do with the fact that some of our people are very rich and others very poor but instead has everything to do with our system of family life and child rearing based on single motherhood and absentee fatherhood, our unfocused and maladaptive educational system, our small population and geographical size, the risk adverse nature of our tiny local entrepreneurial elite, and our lack of natural resources.
Second, what Thomas fails to reveal is that the COVID-19 windfall profits of the billionaires he lists were rooted in the now publicly traded companies they founded, often with a pittance of money and lots of hard work, ingenuity, and ambition, whose millions of ordinary and institutional investors, including the pension funds of modest working people, who collectively almost always end up owning more shares than the founders, has made them and us much better off economically as well.
Equally important, the companies controlled by these billionaire innovators have created hundreds of millions of direct and indirect well-paying jobs around the world. Again, China is an excellent example of this process as tens of millions of half-starved peasant farmers have eagerly fled the countryside to earn a better living working in industrial factories and other enterprises.
Moreover, most of these super rich people have already donated lots of their money to worthy causes and will likely voluntarily bequeath most of their wealth to their own or other people’s charitable foundations, as other super-billionaires have done for generations.
Third, if all the wealth in the world were redistributed so that every single person had an equal share of this wealth, the income distribution problem would not be solved for very long, if at all.
The world’s global wealth is roughly US$400 trillion dollars. Divided among our 7.8 billion world population would provide each man, woman, and child US$51,282. (If only the wealth of the top 1% of the world’s richest people were redistributed, this number would be halved.) Setting aside the preposterous assumption that the rich countries of the world would ever willingly implement this redistribution of their people’s hard-won wealth, this would surely give a lot of low-income people in the world’s poorest countries a much needed leg-up. Those living in extreme poverty in low-income households could afford more food, water, clothing, shelter, and other necessities that many of us in upper middle-income SVG take for granted.
But how long would these opportunities last? In a world with so many people with different needs, wants, skills and education, not to mention far different investment, business, and resource potential, probably not long at all. In little SVG, a country with one of the highest levels of wealth inequality in the world, a national wealth redistribution would see every person receiving some US$18,000, or around EC$48,000, a tidy sum indeed for our poorest people but surely not enough to launch all or most of them on path to sustainable wealth creation in the absence of many other developmental factors. More important, those who carefully and intelligently used their lump sum payment to become independently wealthy entrepreneurs would be more than matched by those who simply consumed this windfall in short order through the purchase of necessary or desired consumer goods and services. At the end of the day, we would be back where we started with some people rich and many people poor.
In sum, with and between nations, neither capitalist accumulation nor wealth inequality are inherently evil or problematic, contrary to what Thomas would have us believe in his “last man standing” support of grass-roots economic communism — as opposed to one-party nominally “communist” political control –a dream long abandoned by our country’s radical intellectuals after they realised that such inhumane systems could only be maintained by brute force as clearly seen in its few remaining outposts — Cuba, Vietnam, Laos, North Korea, and, to an ever-declining level, China.
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected].