The Covid-19 pandemic left capitalism reeling: supply chain failures; global market indexes falling by one third; millions of job losses and billions of lost labour hours; resources diverted into healthcare and vaccine development. According to World Bank figures, the world economy shrank by 3.6% in 2020. Yet, Credit Suisse’s Global Wealth Report 2021 reveals that from 2020-2021, global wealth grew by 7.4%, and the number of USD millionaires across the world increased by 5 million. The annual growth rate of global wealth for the last year was only slightly below average compared to the years 2000-2020, the average wealth per adult increasing by 6.0% to a record high of $79,952. And ‘despite being among the worst-affected countries, with an average GDP loss of 7.1%, [Belgium, Canada, Singapore and the United Kingdom] achieved unusually high wealth gains averaging 7.7%’. How did wealth increase, despite economic activity grinding to a halt?
At the start of the pandemic between January and March 2020, wealth did indeed take a hit; global wealth fell by 4.4% and the global wealth per adult fell by 4.7%. At the time, the OECD reported, ‘For each month of containment, there will be a loss of 2 percentage points in annual GDP growth’. Then, as capitalism began to flat line, governments stepped in with the defibrillator and shouted ‘Clear!’: furloughing the jobs of millions of people; pumping money into businesses to prevent bankruptcies; and stimulus spending.
As public money poured into financial markets, asset (stocks, bonds and property) prices rocketed, further inflating the already-ballooning wealth of those at the top of the pyramid who own these assets. The number of dollar millionaires rose globally by 5.2 million people to 56.1 million, so that 1.1% of the world’s population were millionaires, with 45.8% of the world’s total wealth. At the very top are the 215,030 ultra-high net worth individuals each possessing wealth of more than $50m, their number rising by 23.9% since 2019. Meanwhile, 56% of the world’s population, nearly 3 billion people, possess less than $10,000 each, 1% of the world’s total wealth!
As for billionaires, according to Forbes, their number rose from 2,095 to 2,755 with their total wealth increasing by over 60% in 2020 to $13.1 trillion dollars, greater than the GDP of China. Strikingly, the number of billionaires in India increased to 140 and their total wealth jumped by $100bn despite India’s overall wealth decreasing by 4.4% and wealth per adult decreasing by 6.1%: an intense concentration of wealth at one end of society. This gain in wealth of the private sector has mirrored an unprecedented increase in government debt, which rose to 20% relative to GDP. ‘In essence, there has been a huge transfer from the public sector to the household sector.’ Who will pay this debt? Those who produce all wealth: the working class.
Ben Adelaide
Fight Racism! Fight Imperialism! No 283, August/September 2021
