Jeff Gates on wealth redistribution
|January 9, 2007||Posted by Staff under Progress Report, The Progress Report|
Special Privilege Defeating Freedom
21 Ways Neo-Liberals Redistribute Wealth Worldwide
by Jeff Gates
1. See www.forbes.com. To compare wealth accumulation with earnings of the typical employee, the figures assume that wealth was amassed untaxed over a 40-hour week and a 50-week year.
2. Edward N. Wolff, Recent Trends in Wealth Ownership, a paper for the conference on Benefits and Mechanisms for Spreading Asset Ownership in the United States, New York University, December 10-12, 1998. Household financial wealth refers largely to assets that can be readily liquidated.
3. Congressional Budget Office Memorandum, Estimates of Federal Tax Liabilities for Individuals and Families by Income Categoy and Family Type for 1995 and 1999, May 1998.
4. See www.census.gov (income at Table H-2).
5. Reported in The Economist, June 16-22, 2001.
6. Jill Anderson Fraser, White Collar Sweatshop: The Deterioration of Work and Its Rewards in Corporate America (New York: W.W. Norton, 2000).
7. Stijn Claessens, Simeon Djankov and Larry H.P. Lang, Who Controls East Asian Corporations? (Washington, D.C.: The World Bank, 1999).
8. A nominal 3.5 percent levy on the average $5 billion of financial wealth held by the world’s 200 most well-to-do individuals would generate the $35 billion per year required to address the widespread abject poverty left in the wake of today’s neo-liberal development model. Three-quarters of those 200 people live in the 30 richest nations; sixty live in the US. This group of 200 saw their wealth double in the four years to 1999, to $1,000 billion. Financial markets are a global commons, akin to a shared pasture in which everyone grazes their livestock. No one owns the pasture, yet every user benefits from its use. Globally, financial securities can only rightly be called securities because international law, backed by the force of cross-border treaty, underwrites the enforceability of property rights in financial securities from which a remarkably small portion of humanity pockets the bulk of the benefits. In addition to the risk-reducing opportunity to diversify, capital markets offer security-holders an opportunity to convert their financial property to cash. That commons-facilitated liquidity boosts the value of a traded security by roughly 35% when measured against an untraded security in a comparable firm. Thus, this levy should be seen as a capital commons user fee. At 3.5 percent, less than a typical value added tax, user fees would recoup for the commons just 10 percent of the financial value that’s attributable solely to a feature the commons now provides free. By contrast, the Tobin tax is directed at transactions in financial markets when, in truth, it’s the opportunity for a transaction that’s the source of financial value. The difference in the Tobin tax and the Capital Commons User Fee can be likened to the difference between kinetic energy and potential energy. A tradable financial security has more value than one not tradable, regardless whether it’s actually traded, as evidenced by the fact that its potential liquidity enhances its value as collateral.
9. See Living Planet Report 2000 by United Nations Development Program and World Wildlife Fund.
10. The three money managers are Barclays Global, Merrill Lynch and Fidelity.
11. James Gustave Speth, The Plight of the Poor, Foreign Affairs, May/June 1999.
12. United Nations Human Development Report 1999 (New York: Oxford University Press, 1999), p. v.
13. Ibid. p. 28.
15. United Nations Human Development Report 1998 (New York: Oxford University Press, 1998).
16. Branko Milanovic, True World Income Distribution, 1988 and 1993: First Calculations Based on Household Surveys Alone, Economic Journal, January 2002, No. 476, pp. 51-92.
17. United Nations Human Development Report 1996 (New York: Oxford University Press, 1996), p. 4.
18. Juliet S. Schor, The Overworked American (New York: Basic Books, 1992) indicating that the annual work year increased by 139 hours from 1969-1989. The Washington, D.C.-based Economic Policy Institute found that the annual hours worked expanded by 45 hours from 1989-1994.
19. Steven Greenhouse, So Much Work, So Little Time, The New York Times, Sept. 5, 1999, p. WK1.
20. Charles Handy, The Hungry Spirit (New York: Broadway, 1998), p. 17.
21. The pending Farm Security Act of 2001 would cost US taxpayers $170 billion over 10 years.
22. In 1999, Cargill, the world’s largest grain trader purchased its closest competitor, Continental Grain. The profits of Archer Daniels Midland tripled from 1993 to 2000 while Quaker Oats’ profits nearly doubled. ConAgra’s profits grew from $143 million in 1993 to $413 million in 2000 while Kellogg’s profits surged nearly nine-fold between 1993 and 2000, from $66 million to $588 million. Business Week 1000, March 28, 1994; Fortune 500 Largest U.S. Corporations, Fortune, April 16, 2001. See also Public Citizen’s Global Trade Watch, Down on the Farm: NAFTA’s Seven-Year War on Farmers and Ranchers in the US, Canada and Mexico (Washington, D.C.: Public Citizen, June 2001), pp. i-v.
23. See www.motherjones.com/about_US/pressroom/030501_2.html
24. Evan L. Marcus, The World’s First Trillionaire, Wired, September 1999, p. 163.
25. Federal Reserve Bulletin, January 2000, p. 10.
26. Colin Hines, Localization (London: Earthscan, 2000), p. 14.
27. Lester Brown, et al., State of the World 2001 (Washington, D.C.: Worldwatch Institute, 2001).
28. Theo Colborn, Dianne Dumanoski and John Peterson Myers, Our Stolen Future (New York: Plume, 1997).
29. Samuel Epstein, The Politics of Cancer Revisited (Fremont Center, N.Y.: East Ridge Press, 1998).
30. Lori Wallch and Michelle Sforza, Whose Trade Organization (Washington, D.C.: Public Citizen, 1999), pp. 12-51.
31. David M. Roodman, Still Waiting for the Jublilee, Washington, D.C.: Worldwatch Institute, April 2000. p. 66.
32. Susan George, A Fate Worse than Debt: The World Financial Crisis and the Poor (New York: Grove Press, 1988), p. 61; terms of trade from IMF, International Financial Statistics Yearbook 2000 (Washington, DC, 2000), pp. 144-45; trade barriers from World Bank, Global Economic Prospects and the Developing Countries 2001 (Washington, DC 2000), pp. 17-23, cited in Roodman, Ibid., p. 34.
33. The IMF estimates that the amount in offshore tax havens grew from $3.5 trillion in 1992 to $4.8 trillion in 1997. Other estimates put the amount as high as $13.7 trillion. See Douglas Farah, A New Wave of Island Investing, The Washington Post National Weekly Review, October 18, 1999, p. 15. Alan Cowell and Edmund L. Andrews, Undercurrents at a Safe Harbor, The New York Times, September 24, 1999, p. C1.
34. See Jeff Gates, Democracy at Risk (Cambridge, Massachusetts: Perseus Books, 2000), pp. 207-209.
35. The Times (London), September 23, 1999.
36. United Nations Human Development Report 1999, Ibid., p. 28.
38. See Mahbub ul Haq, Charter of Human Development Initiative, State of the World Forum (San Francisco, October 3, 1996). The US is presently $500 million in arrears on its UN dues.
39. See Oscar Arias, Stopping America’s Most Lethal Export, New York Times, June 23, 1999, p. A23.
40. See www.fao.org
41. Ibid., Table B-78.
42. Tax Report, The Wall Street Journal, July 21, 1999, p. 1
43. This projection assumes that the tax cut provisions enacted in 2001 are made permanent rather than, as now, assuming they will automatically expire in 2011. Washington, D.C.: Center on Budget and Policy Priorities, August 3, 2001. See www.cbpp.org/8-3-01tax.htm.
44. Edward N. Wolff, Where has all the Money Gone?, The Milken Institute Review, Third Quarter 2001, p. 34.
45. Homeowners are also now much more highly leveraged than in the 1980s, with down payments at record lows and mortgage levels at record highs. Lou Uchitelle, In Home Ownership Data, A Hidden Generation Gap, The New York Times, September 26, 1999, p. BU4.
46. Deeper Debt for Uncle Sam, Business Week, March 18, 2002.
47. Economic Report of the President 2002, Table B-105.
48. Executive Pay Special Report, Business Week, April 16, 2001. CEO pay has grown 434% since 1991. Average pay in 2000 was $13.1 million. The 20 highest paid earned an average $117.6 million.
49. Disney’s return to shareholders plummeted 10% over that period. Enron’s chief executive was paid $72.5 million in 2000, just before filing (in 2001) the largest bankruptcy in US history. The chairman was paid in excess of $200 million. Ibid.
50. Forbes, October 8, 2001, p. 134.
51. Debt to Society, Mother Jones.com Special Report, www.motherjones.com/prisons/index.html.
52. Too Many Behind Bars, The Washington Post National Weekly Edition, August 2-7, 2001, p. 24.
53. Dalton Conley, Being Black, Living in the Red (Berkeley: University of California Press, 1999).
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