The coronavirus crisis has endangered the jobs or incomes of half the world’s workforce. But a tiny minority are doing very well indeed out of the pandemic.
So-called ‘family offices’ are private companies set up by ultra-wealthy families to manage their wealth. They typically include investments such as mansions, private jets and super-yachts.
The Swiss bank UBS surveyed 121 such family offices and found that 93 had met or exceeded their financial targets for the year to May 2020. The combined wealth disclosed by these 121 private companies came to $142 billion, each with an average worth of $1.6 billion.
Alright for some
Why have the rich done so well?
The head of UBS’s ‘ultra-high net worth unit’ puts it candidly: they have enough money already to manage risk better than others. Or, more accurately, the wealthiest hire people to make the high-risk, high-return investments their competitors can’t. They can weather losses which would wipe out their competitors, giving them an advantage and a more stable income.
This is how capitalism works – in both good and bad times. The anarchy of the market leads to smaller businesses failing and being gobbled up by larger companies; to concentration and monopoly. Competition therefore gives way to the dominance of a few large firms. And crises like pandemics amplify this trend.
A good example of this is Jeff Bezos, owner of Amazon and the world’s richest individual.
Bezos has increased his fortune by $75 billion since January, profiting from the virus as people are forced to shop online. Whilst high streets are decimated and workers are hit by a tsunami of job cuts, the Amazon boss is laughing all the way to the bank.
As long as the means of production and distribution are privately owned – run on the basis of profit, rather than being owned, managed, and run for social need – billionaire Bezos and others like him will continue to benefit massively from capitalism’s crises.
‘Tax the rich’
Some of the more outwardly ‘philanthropic’ members of the super-rich elite have called for themselves and their peers to be taxed more heavily, in order to pay for the post-pandemic recovery.
Ben and Jerry’s co-founder Jerry Greenfield and heir to the Disney empire Abigail Disney are amongst the wealthy individuals calling on “governments to raise taxes on people like us. Immediately. Substantially. Permanently.”
“As COVID-19 strikes the world, millionaires like us have a critical role to play in healing our world,” the ‘Millionaires for Humanity’ letter begins. “Unlike tens of millions of people around the world, we do not have to worry about losing our jobs, our homes, or our ability to support our families.”
“But we do have money, lots of it. Money that is desperately needed now and will continue to be needed in the years ahead, as our world recovers from this crisis.”
What these generous and ‘benevolent’ billionaires do not say, however, is that extreme wealth and poverty are unavoidable features of capitalism. The enormous sums that they and others in the top 0.1% have accumulated is thanks to the continued exploitation of the rest of us and the planet’s natural resources.
The billions vs the billionaires
The wealth clearly exists in the world to provide everyone with decent jobs, housing, education, and healthcare. All of this wealth is produced by the labour of the working class. And yet it is siphoned off by the capitalists so that they can live a life of luxury.
In this respect, as Karl Marx noted, the capitalists only act as “capital personified”. Their insatiable appetite for greater wealth is simply a reflection of the laws of the capitalist system, based on the chaos of competition and the endless pursuit of profit.
Rather than attempting to ‘tax the rich’, the labour movement must demand the expropriation of these billionaires. This should be part of a socialist programme to transform society, based on a rational and democratic plan of production, involving the nationalisation of the banks and big monopolies, under workers’ control.
To end inequality, we must end the system that breeds it. “Accumulation of wealth at one pole,” as Marx explained in Capital, “is at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole.”
Until we move beyond capitalism, extreme profits for the billionaires and shared misery for billions will continue.