Billionaires and the welfare of nations

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Occupy Wall Street protester in 2011.
Image: Glenn Halog Source: Flickr

The super rich are leaving only the scraps for everyone else to fight over, which is fuelling a mounting wave of intolerance as minorities and migrants are scapegoated for falling wellbeing. For the welfare of all, we must end these stark wealth inequalities before it leads to unmanageable social unrest.

Saturday 20 June 2020

Everyone has it tough during the COVID-19 pandemic and we are all in the same boat – this has been a common refrain throughout the crisis.

It is true that we are all aboard the Titanic together. However, some are riding first class, some are riding third class, and others are in the galley below rowing… Oh, and there are not enough lifeboats to go round.

In reality, the super rich are not only shielded from this crisis by their wealth, which enables them to shelter from the virus on superyachts or escape it on private jets, some are even enjoying an unprecedented bounty during these difficult times. This is especially the case in the United States.

During the coronavirus crisis, US billionaires accrued a huge windfall of more than $583 billion in the three months between mid-March and mid-June, according to the latest report by the progressive Washington-based Institute for Policy Studies and Americans for Tax Fairness. At a time when at least 45 million Americans are out of work, tens of thousands have died of the coronavirus (which has has killed black Americans at three times the rate of whites), and 265 million people around the world are at risk of dying of hunger, the United States minted 29 additional billionaires, according to the report.

While frontline workers risk their health and lives to keep society functioning and care for the sick, the biggest financial winners by far were America’s top five billionaires (Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett and Larry Ellison) who saw their wealth grow by a total of $101.7 billion, or 26%.  Bezos and Zuckerberg saw their combined fortunes grew by nearly $76 billion, or 13% of the $584 billion total, according to the IPS study.

Whenever anyone, including myself, criticises the obscene wealth of billionaires, there are those who rush in to defend them, arguing that critics are just envious and that billionaires deserve this success and earned their vast fortunes.

But is this actually the case?

Like a superhero origin myth, there is a typical narrative that surrounds billionaires, especially those in the tech industry. It goes something like this: X, working in their bedroom/garage/dorm, came up with a brilliant idea, against the odds, brought it to market and is now enjoying the fruits of their brilliance.

It is true that quite a few billionaires started off with nothing (or at least with a more modest fortune), and many did exhibit inspiring brilliance in their early careers. However, is the acumen of these entrepreneurs really worth so much more than everyone else’s labour – combined?

Unimaginably, it would take an American household earning the mean $60,000 a year nearly 2.5 million years to accumulate the estimated $147bn which Jeff Bezos is estimated to be worth… if they did not spend a penny. A low-paid Amazon worker on the shopfloor would take more than 4 million years of saving their entire income to assemble their boss’s fortune.

And these are workers in the world’s richest country. Now try to imagine how long it would take a poor worker in South Asia or sub-Saharan Africa to make this kind of money.

It goes without saying that nobody’s ideas or work ethic or vision is worth thousands or even millions of years of everyone else’s labour. This notion is particularly insulting in this time of crisis, when the people society depends on to function are not tycoons, top CEOs or hedge fund managers but nurses, doctors, emergency workers, care-givers, supermarket staff, delivery people and utility workers.

Moreover, there is almost inevitably an ugly and underexposed underbelly which casts serious doubt on the idea that billionaires “earned” their unfathomable fortunes. While there are certainly “good billionaires” and “bad billionaires”, there are no billionaires, as far as I can ascertain, who made their billions fair and square, without employing some ethically dubious practices.

These practices may include underpaying or overworking staff, monopolising the productivity gains delivered by their workers by keeping the financial gains to themselves and automating jobs, exporting  jobs, stifling competition, and even exercising monopolies or near-monopolies.

One area where the billionaire class and large corporations have been laughing all the way to the bank, and where the rest of society has been crying in misery, is taxation. While ordinary wage earners in advanced economies, especially those with a robust social safety net, disproportionately bear the burden of taxation, corporate tax rates and taxes on high incomes and capital have hit historic lows, with a de facto regressive tax system increasingly becoming the new normal.

The results of this skewed, unjust system are clear to see. The fattest cats in America, for example, saw their wealth bloat by over 1,100% between 1990 and 2018, according to the Institute for Policy Studies report, yet their proportional tax obligations decreased a spectacular 79% over the same timescale.

Meanwhile, the rest of society is left to fight over the scraps, which has fuelled ugly identity politics and the massive resurgence of racism and xenophobia as minorities and migrants are incorrectly blamed and scapegoated for the corrosion of the majority’s welfare which was largely caused by the gluttony of the super rich and large corporations, not just in America but in many other parts of the world.

Over and above this, the unprecedented mobility of capital and wealthy individuals, facilitated by decades of deregulation and the absence of a global tax regimen or coordination of tax policies, has enabled many corporations and billionaires to transfer their profits to tax paradises, allowing them to dodge their tax burdens and, with them, their social responsibilities. This has also forced a race to the bottom between countries fearful of losing out to tax havens.

Even though corporate tax rates are at an all-time low, the IMF estimates that governments are deprived of up to $600 billion a year in corporate taxes at the reduced rates due to the kind of clever bookkeeping that has been made possible through decades of financial deregulation and walks the fine line between legal ‘tax avoidance’ and illegal ‘tax evasion’. Economists calculate that 40% of the profits of multinationals are artificially transferred to tax havens from higher-tax countries, especially in Europe.

To add insult and injury, not only has deregulation devastated the welfare state, but also among the biggest recipients of state welfare are, paradoxically, the richest, who benefit the most from the rescue packages designed to pull us out of crises, especially in the US. This occurred during the Great Recession following the financial meltdown of 2008-9 and is happening again during the current coronavirus crisis.

More enlightened billionaires have arrived at the realisation that such vast concentrations of wealth are not only bad news for society, they are bad for the wealthy. Warren Buffett and Bill Gates are both advocates of higher taxes for the rich, but the rates they consider fair are nowhere near enough to bridge the inequality chasm that has emerged, rebuild our tattered social safety nets, lift the world’s poorest out of poverty and heal the environmental devastation caused by such extremes of wealth.

Another solution is for billionaires to voluntarily divest. Buffet and Gates have not only pledged to give away their money, they have established the so-called Giving Pledge, where they encourage other tycoons to also part with their fortunes. However, the response to the initiative among the mega rich, or what I like to think of as wealth extremists, has been lacklustre at best, representing a tiny drop in the ocean compared with the total wealth billionaires control. Meanwhile, those who have signed up to the pledge are generally seeing their fortunes grow far faster than they are giving them away.

Besides, philanthropy is no substitute for taxation and social justice. Not only does it demean people by turning what should be their rights into acts of charity and largesse from the rich, it also puts what should be a collective decision-making process on societal priorities in the hands of unelected individuals, who may or may not be concerned about the greater good.

Moreover, this gigantic concentration of wealth gives billionaires the kind of political clout that makes a mockery of the one person, one vote foundation of democracy. We are used to the business class representing a powerful oligarchy in authoritarian and autocratic regimes, such as in Russia or the Arab world. In democracies, the massive lobbying power, both direct and indirect, of the billionaires and corporations erodes democratic governance and undermines the will of the electorate.

What we need are not half-baked efforts to make being a billionaire undesirable – we must make becoming a billionaire impossible. This requires a collective, global effort to introduce “equanomics“.

This can be achieved through a variety of mechanisms, from a coordinated taxation system so progressive that there remains no incentive or possibility to build up such vast fortunes, to enacting an actual cap on wealth and incomes.

This will both narrow inequalities and enable societies around the world to repair and expand their social safety nets, as well as to better reward those working in neglected vital sectors. Moreover, it will enhance the incentive for constructive, socially beneficial innovation because people will feel that the fruits of their labour are not just going to make fat cats fatter.

Failure to take corrective action will lead to greater social unrest and conflict as people’s welfare is further degraded. While minorities are currently paying, and will continue to pay, the heaviest price for this inequality, the super wealthy, as history has shown repeatedly, are not immune to the wrath of those they impoverish.


This is the updated version of an article that was first published by Al Jazeera on 26 May 2020.


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Arab exiles: Fleeing nightmares or chasing dreams

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By Khaled Diab

When Arab revolutionary dreams turn into anti-revolutionary nightmares, the fortunate ones find safety abroad. But with exile comes unprocessed trauma, guilt, fear, dealing with xenophobia and painful yearnings for home.

Photo: ©Khaled Diab

Sunday 20 October 2019

Imagine knowing that your government has arrested disappeared hundreds of people over the past few weeks.

Imagine knowing that your government has, in the recent past, not balked at the prospect of killing 1,000 protesters… in a single day.

Imagine how much courage it would take to swallow your fear and take to the streets or to continue to protest loudly on social media. And yet this is exactly what brave Egyptians up and down the country have been attempting.

The numbers are a far cry from the millions who broke through the fear barrier and came out, in 2011, to topple the former dictator Hosni Mubarak’s three decades of rule. But then the regime of the current strongman and Donald Trump’s “favourite dictator”, Abdel-Fattah el-Sisi, has been doing its utmost to prevent a repeat of the mass uprisings in 2011 and 2013.

The Sisi regime’s determination to bury Egyptian aspirations of bread, freedom, social justice and dignity in the graveyard of ruthless, murderous repression has spurred an untold number of Egyptians to pack up their shattered dreams of liberty and try to piece together their lives in (self-imposed) exile.

Refuge from the storm

Some have headed to safe havens in the region, such as democratic Tunisia, while others with the means or opportunity have moved to Europe or America. While the media image of refugees is of desperate people crossing the Mediterranean on leaky boats or traipsing through the desert, many exiles are actually not officially refugees. They move to the West ostensibly to take up job openings or to pursue postgraduate studies, but they are fleeing a nightmare rather than pursuing a dream.

For many, it takes time to come to terms with the reality that they are exiles, stranded in a foreign land. “After five years of being away from home, it’s kind of crystal clear at this point,” admits Ganzeer, who is currently based in Houston.

This Egyptian street artist who became famous for his revolutionary murals, which were later physically and figuratively whitewashed, had to flee his homeland after pro-regime TV started to spread conspiracy theories that he was, in a case of life outdoing black comedy, both the leader of a sinisterly decadent international alliance of artists out to ruin the image of Egypt’s military and a member of the sinisterly pious Muslim Brotherhood.

Like grief, the first phase of exile is often denial. “I rejected the fact that I couldn’t go back home… For almost a year, I moved from one temporary accommodation to another. Eight flat shares in less than a year,” A1, an exile whose name, identity and country of residence I am withholding because (s)he fears for their life.

“I really don’t enjoy living here, but I’m staying here for the safety and welfare of my children,” an anti-Assad Syrian dissident of Alawite descent told me recently in Potsdam, near Berlin. “I miss Syria every day. Being here makes me feel bad for the family and friends I left behind.”

Stolen lives

Wherever they end up, many find that though they are physically elsewhere, their minds, consciousnesses and hearts are firmly back home. “It feels like someone has stolen my life. The life I know of. The life that I have invested many years, a lot of money and a lot of hard work to build. If feels like someone has taken my family from me,” describes A1.

Not everyone feels pangs of longing for their country in and of itself but they do long for that part of it they call their own. “I don’t miss living in Egypt. I do miss my friends and family there. I miss Sinai and the sea, my favourite place,” the Egyptian novelist and writer Ahmed Naji told me from his new home in Las Vegas, where he is a resident writer at the University of Nevada.

For political exiles, it is tormenting to watch what is going on back home and not feel saddened for the millions still imprisoned in the nightmare. “It drives me crazy. I find myself glued to the screen,” confesses Ganzeer, who has designed a number of biting caricatures of Sisi to protest the Egyptian dictator’s latest crackdown.

Gaining escape velocity

In Arabic we have an expression which roughly translates as “What has passed has passed away,” and some exiles, fearing the power of the distant (geographical) past to trap and entrap them, try to focus their energies on their here and now.

“I don’t want to live in the condition of the exiled writer who resides in one country but his heart and mind are in another country,” says Ahmed Naji.

I grew up with just such an exiled writer. Although we lived in London, my father lived in a bubble: he ran an Arabic-language opposition newspaper, wrote political polemics in Arabic and hung out almost exclusively with fellow Arab dissidents, usually leftists and pan-Arabists.

My late mother, on the other hand, preferred to mix it up. In addition to spending time with Arabs, she had an “everyone welcome” attitude and loved to spend time with immigrants from other diverse backgrounds, not to mention native Brits from all walks of life.

As a multiculturalist, I prefer a broad church of friends and acquaintances wherever I find myself.

“I want to understand the new place and be part of its cultural and literary scene,” Naji elaborates. And for Naji, this may be easier than for many exiles. Although acquiring a sufficient command of English to express himself eloquently and to develop his own voice remains a challenge, the themes he deals with in his literature, such as sex and emotional turmoil, are universal ones.

In fact, it was Naji’s breaking of sexual, rather than political, taboos which unexpectedly landed him in hot water. Although contemporary Egyptian literature has become increasingly open about sex and drugs, an explicit scene in a novel of Naji’s, which was being serialised in a literary magazine, prompted a legal complaint from a reader who claimed rather ridiculously reading it had harmed his health. This mushroomed into a Kafkaesque-Orwellian trial by a brutal regime desperate to virtue signal to religious and social conservatives.

Whimsical whippers

The arbitrary, whimsical, oft random nature of state repression, as well as authoritarian regimes’ vicious brutality are meant to instil terror, and it does – as last year’s chilling, cold-blooded murder of Washington Post columnist Jamal Khashoggi succeeded in doing, and not only for Saudi dissidents.

“I feel cowardly and humiliated, which is a collective feeling afflicting Egyptians at home and abroad,” observes Naji. “Those outside Egypt experience attacks and humiliation. Even here, I receive direct and indirect threats.”  Fear, nebulous or concrete, individual or collective, is a common emotion amongst exiles. On a personal level, even though I am not an exile and enjoy the relative protection of a European passport, I often feel a sense of vague anxiety upon landing in Cairo at the potential trouble my outspoken criticism of the regime and of religion may land me in.

Nevertheless, exiles are generally safer than their counterparts back home. However, this relative safety and security often provokes involuntary feelings of guilt. “I get the feeling I am talking from a privileged position, even though I was kind of forced to leave the country and was harassed, investigated and threatened all the time,” Jeje Mohamed, an Egyptian freelance journalist who is currently based in Washington, DC, told me recently.

“People sometimes call it survivor’s guilt or something like that,” she elaborates.

Migrating to Mars

While recognising how fortunate it was to have found a safe haven, A1 finds the anti-refugee, anti-migrant sentiment in Europe hurtful and galling, especially the notion that people come to sponge off the state. “I never received money from their state. Economically speaking, I have brought with me my own education, which is worth at least one million euros of direct and indirect costs,” A1 counters.

As time has drifted by, A1 finds it too exhausting and fatiguing to challenge these prejudices. “I’m sometimes confronted with those Europeans who think I’m here to benefit from their system,” A1 says. “What do I do about it? Nothing. I smile and walk away. I’m too exhausted to explain or argue.”

On the other side of the Atlantic, in Trumpian America, things are far from cosy for many exiles. “You wouldn’t have expected it from America, given that it’s made up of people from all over,” reflects Ganzeer. “It’s particularly weird to me that I get the sense that there are more people open to the idea of humans migrating to Mars than they are of humans migrating within the vicinity of our planet Earth.”

For those able to observe matters with some variety of detachment or a well-honed sense of irony, there is plenty of bleak humour to be derived from the circus of primetime bigotry. “I diligently follow right-wing news channels and radio stations, not to mention their websites,” says Ahmed Naji. “They are very entertaining and possess wild and fertile imaginations… I enjoy watching them and laugh a lot.”

To hear xenophobic rightwingers speak, you would think the influx of Arab and Muslim exiles and refugees was something new. However, it has been going on for generations, albeit the numbers have grown significantly with the current upheavals in the Middle East.

Arab cultural capitals

Paris and London (and to a lesser extent, New York) traditionally played the roles of intellectual, political and cultural centres of gravity for Arab diasporas, one for Francophones and the other for Anglophones, acting as living labs and testing grounds for ideas crushed at home.

When I was growing up in London, I witnessed this symbiosis firsthand, though I was too young and disinterested to grasp its full significance. Despite the racism of some, London was also a tolerant, welcoming and accommodating place well on its way to becoming possibly the most diverse city in the world.

In London, it is easy to find Arabic newspapers and books, Arab cultural centres and media outlets, Arab hangouts and restaurants, and Arabs from every walk of life. Despite this, it is still not home for some. One Cairo-based Lebanese journalist who ended up in London after being kicked out of Egypt finds the British metropolis demoralising and alienating.

The growing xenophobia in America and the UK are shifting the centre of Arab exile to mainland Europe, and specifically to the German capital, Berlin. “Brexit has made London, and the UK in general, deteriorate in the eyes of the world,” observes Amro Ali, a political sociologist who is currently researching Berlin’s emerging status as the unofficial capital of Arab exile.

“There is something happening that many cannot put their finger on. But there are many dynamic spaces, from theaters to film screenings, to art galleries, and so on, that are thriving in the Arab spaces of Berlin, and that gives it… that positive general mood,” notes Ali.

Interestingly, Berlin has also emerged as a refuge for Israeli progressives and leftists escaping the dominant right-wing ultranationalism and constant conflict at home. “I’m not in physical exile because I can go back to Israel whenever I want,” explains Mati Shemoelof, an Israeli poet and journalist with Iraqi roots. “There is a mental exile, but I’m okay with that, I’m one with that. I miss the good parts of Israel. I don’t miss the bad parts of Israel.”

While Arabs and Israeli have few opportunities to interact in the Middle East, far away from the conflict, they are finding common ground in this cosmopolitan city, despite some incidents of anti-Semitism. “There’s something very beautiful here in Berlin when I can meet Arabs and do literary evenings and literary events with them,” reflects Shemoelof.

Such cultural and social interactions are promising for the future.

Unlike economic migrants, who are vilified in some parts of Germany, refugees and exiles are generally treated with more understanding and sympathy. This is partly because of the difficulties they faced in their homelands and partly because many wish to leave once things calm down.

“The young Syrians I speak to say they want to go back to Syria, unlike their parents who want them to settle down in Germany, but the children want to return to a post-Assad Syria and build it up,” Ali says.

Older Syrian exiles also pine to return home. “I did not spend years as a political activist, go to prison twice and risk my life in Syria to end up living and working in Germany, even if the work is rewarding,” insisted the Syrian exile I met in Potsdam. “It feels like my life’s work has gone down the drain. It’s very depressing.”

These exiles, biding their time in anticipation of changing times, are following in the footsteps of previous waves of exiles, many of whom returned to the Middle East at promising junctures in history, such as the so-called Arab Spring, with the dream of contributing their knowledge and skills to create a better tomorrow at home.

In the meantime, their host societies would do well to make the most of these motivated newcomers.

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