This group of critical
thinkers is exploring how
to create a more just society that benefits everyone
(from left): Darrel Moellen- dorf, Chuck Feeney, Jeffrey Sachs, Per Molander and
Many institutions have set their sights on becoming more just and altruistic. But the numbers detailing the distribution of wealth in the world tell a different story. Why is this the case, and what must be done to prevent inequality?
Paula Sanz Caballero
On 14 September 2020, in the midst of the coronavirus pandemic, Chuck Feeney’s four- decade-long mission in life came to a close as he signed the documents that sealed the fate of his charity, Atlantic Philanthropies. More than eight billion dollars that he had amassed during his lifetime disappeared in an instant that day. But the money certainly did not vanish into thin air. It was handed out to countless projects to fund research into ageing, education and human rights.
Feeney, 90, made most of his wealth from the pioneering role he played in the duty-free sector. But he was never one to live it up. His philosophy of life was simple: “Giving While Living”. “The poor are always with us. You know, you’ll never run out of people you can help,” Feeney said in a film documentary that offers some rare glimpses into the life of this philanthropic American. It was Feeney who served as the role model for other U.S. billionaires like Bill Gates and Warren Buffett, and led the way by pouring much of his vast wealth back into society during his lifetime.
If the world were a more just place, we would never need such charity. At the beginning of 2019, roughly a year before “coron- avirus” became a universal part of our vocabularies, Oxfam, the re- lief and poverty- fighting organisation, issued a report on social in- justice. It noted that: “The wealth of the world’s billionaires in- creased by 900 billion dollars in the last year alone, or 2.5 billion dollars a day. Meanwhile, the wealth of the poorest half of humani- ty fell by 11 percent.” The pandemic has widened this gap even more. Oxfam says the 1,000 richest individuals in the world were
able to recoup the losses they suffered during the coronavirus crisis in just nine months. But it says that it could take more than a decade for the world’s most impoverished people to recover from the economic blows dealt to them by the pandemic. In a follow-up report bearing the provocative title “The Inequality Virus”, Oxfam surveyed 295 economists from 79 countries, including leading in- equality researchers like the Indian economist Jayati Ghosh and Jef- frey Sachs, the Director of the UN Sustainable Development Solu- tions Network. The survey’s findings: 87 percent of the respondents said they expected to see an increase or a sharp rise in income in- equality as a result of the coronavirus pandemic in their home country.
Why? Why does it seem that, in both good times and bad, the peo- ple who end up falling behind are the ones who need more finan- cial leeway, a greater stake in society and fewer worries? Per Molander, a Swedish mathematician and an expert in distribution questions, says he sees a mechanism, something that borders on
a natural law, lurking behind this phenomenon. The mechanism works like this: “Whoever has more has a greater chance of becom- ing richer simply because they have more to start with.” For those people who cannot grasp this concept, Molander likes to tell a sto- ry about a game of marbles. It is the tale of one child who owns 50 marbles and of a second child with only five marbles to shoot at the target, and the first child’s ability to take the five marbles from the second one simply because they had more marbles to start with.
“It is an example of a self-perpetuating effect that life is teeming with,” Molander says. The poor will need to be far shrewder if they
ever hope to catch up with the rich, he says. Molander has also in- cluded the parable of the marble game in his book “The Anatomy of Inequality”. The book is an eye-opener for many readers. One that is linked to another unsettling realisation: inequality – and the injustice it breeds – is extremely harmful. It is a harm that is inflict- ed not only on individuals, but also on society as a whole: econom- ic growth, upward mobility and people’s faith in democracy. Molander, a former political consultant, thinks that the state should step in here and wield its power. “In a well-functioning so- ciety, the state acts as a counterbalance to the economic power- holders,” he says. “The state has to be powerful enough to do this job and protect its integrity.”
State intervention currently seems to be more popular than ever. After all, the current focus is not only on closing the social gap, but also on saving the very basis of life itself amid the worsening ef- fects of climate change. The EU’s Green Deal and the U.S. Green New Deal, two programmes that include social mechanisms to cushion the blow of upcoming government environmental inter- vention, are the best examples of this situation. Professor Darrel Moellendorf, a political philosopher at the Goethe University in Frankfurt, views political action that is driven by a sense of envi- ronmental justice to be a matter of life and death: “Political leaders must do everything they can to ensure that human welfare, partic- ularly as it applies to the most impoverished and most threatened areas of society, is included in an all-encompassing plan aimed at facilitating the fast transition to a net-zero carbon economy. This will require investments in a sustainable infrastructure that will ul- timately create more and better paid jobs.”
More and more companies are responding to this need and ap- plying a group of principles that go by the initials ESG: environ- mental, social responsibility and ethical management, or gover- nance. It is a push that is producing some noticeable results. A study conducted by PricewaterhouseCoopers (PwC) in 2020 con- cluded that ESG fund assets under management could make up more than 50 percent of all European mutual fund assets by 2025.
Impending political regulations are just one reason for this boom. Other factors include a new, ethics-driven attitude among institutional investors and the growing public realisation that indi- viduals who care nothing about the world around them are taking a risk. Experts like Molander, however, point out that the first and foremost goal of corporations is to increase investors’ capital. As a result, the ESG principles will be applied only to the extent that they serve this goal, he notes. As a way of adding substance to the code, he suggests that an independent oversight authority be put in place.
With the help of ESG, the world may become greener and more humane. But distributive justice does not seem to be a part of it as yet. And efforts like those of Chuck Feeney “are certainly not a so- lution to the inequality problem”, he says. To Molander, it all boils down to changing the rules of the marble game. He suggests that these rules could be amended in such a way that each player could start the game with only five marbles if the poorer player owns no more than five marbles. “In this case, they would have the same chance of winning, provided that playing conditions and skills were equal,” Molander says.
“Whoever has more is more likely to become richer simply because they have more to start with”
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