Billionaires Flourish, Inequalities Deepen as Economies Recover

Linked on our blogs with James Petras – USA, and with Reflections on Twenty-First Century Socialism. – Published on Voltairenet.org, by James Petras, April 19, 2011.

In this profile of global wealth accumulation, James Petras illustrates the direct link between the exponential increase of the U.S. super rich in recent years and the tanking real economy. Unsurprisingly, the prize for the fastest and most dramatic growth of new billionaires goes to the BRIC block countries – recently joined by South Africa – albeit to the great detriment of their working classes and environment … //

… Conclusion: 

The “economic crises” of 2008-2009 inflicted only temporary losses to some (US-EU) billionaires and not others (Asian). Thanks to trillion dollar/Euro/yen bailouts, the billionaires class has recovered and expanded, even as wages in the US and Europe stagnate and ‘living standards’ are slashed by massive cutbacks in health, education, employment and public services.

What is striking about the recovery, growth, and expansion of the world’s billionaires is how dependent their accumulation of wealth is based on pillage of state resources; how much of their fortunes were based on neo-liberal policies which led to the takeover at bargain prices of privatized public enterprises; how state de-regulation allows for plunder of the environment to extract resources at the highest rate of return; how the state promoted the expansion of speculative activity in real estate, finance and hedge funds, while encouraging the growth of monopolies, oligopolies and conglomerates which captured “super profits” – rates above the ‘historical level’. Billionaires in the BRICs and in the older imperial centers (Europe, US and Japan) have been the primary tax beneficiaries of reductions and elimination of social programs and labor rights.

What is absolutely clear is that the state not the market plays a essential role in facilitating the greatest concentration and centralization of wealth in world history, whether in facilitating the plundering of the treasury and the environment or in heightening the direct and indirect exploitation of labor.

The variations in the paths to ‘billionaire’ status are striking: in the US and UK, the parasitical – speculative sector predominates over the productive; among the BRICs – with the exception of Russia diverse sectors incorporating manufacturers, software, finance and agro-mineral billionaires predominate. In China the abysmal economic gap between the billionaires and the working class, between real estate speculators and dispossessed household is lead to increasing class conflict and challenges, forcing significant increases in wages (over 20% the past 3 years) and demands for increased public spending on education, health and housing. Nothing comparable is occurring in the US, EU or in the other BRICs.

The sources of billionaire wealth are, at best, only partially due to ‘entrepreneurial innovations’. Their wealth may have begun, at an earlier phase, from producing useful goods and services; but as the capitalist economies ‘mature’ and shift toward finance, overseas markets and the search for higher profits by imposing neo-liberal policies, the economic profile of the billionaire class shifts toward the parasitical model of the established imperial centers.

The billionaires in the BRICs, Turkey and Israel contrast sharply from the Middle East oil billionaires who are ‘rentiers’ living off ‘rents’ from exploiting oil and gas and overseas investments especially in the FIRE sector. Among the BRICs only the Russian billionaire oligarchs resemble the rentiers of the Gulf. The rest, especially Chinese, Indian, Brazilian and Turkish billionaires have taken advantage of state promoted industrial policies to concentrate wealth under the rhetoric of ‘national champions’, promoting their own ‘interests’ in the name of a “successful emerging economy”.

But the basic class questions remains: “growth for whom and who benefits?”. So far the historical record shows that growth of billionaires has been based on a highly polarized economy in which the state serves the new class of billionaires, whether parasitical speculators as in the US, rentier pillagers of the state and environment such as Russia and the Gulf states or exploiters of labor such as in the BRICs … (full long text).

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