THE POVERTY CONSPIRACY

15 Apr

Poverty Creation Industry
4-14-13

Here’s one conspiracy that can’t be so easily dismissed.

 

Poverty is human-made. It is created – knowingly and with scientific efficiency – by a vastly sophisticated industry that includes private companies, think tanks, media outlets, government policies, and more. This ‘Poverty Creation Industry’ is about the least talked about feature of our global economy and yet it is perhaps the greatest market force in the modern world. 

 

The richest 0.001% of the world control 30% of the financial wealth; the wealthiest 0.1% about 81%. So the rich are indeed extremely rich. More important than their static worth, though, are trends over time.

Over the last two centuries, global inequality has steadily increased. We know this because whilst ratios of absolute poverty have been decreasing over the last two centuries, the standard measure of inequality – the Gini coefficient – has risen from 43.0 in 1820 to 70.7 in 2002. (A score of 0 means everyone has exactly the same amount and 100 means one person controls everything.) This trend has been accelerating since 1980, when the latest round of ‘free market’ policies was put in place. It is being exacerbated still further in most countries by both the economic crisis and climate change.

 

What we find is a two-tier system comprised of, 1) a global mainstream economy where basic rules of fairness and transparency apply, and 2) a global shadow economy where fairness is an irrelevant concept, transparency a state to be avoided at all costs and the social contract is ignored.

This shadow economy has been steadily and systematically created through a series of very clear strategies. Its sole purpose is to provide a place above national tax laws, where profit and capital can be hoarded without limit. It is extremely popular with those who can afford to access it. It is vast. It is comprised of over 80 tax havens, innumerous trade agreements and legal frameworks, and employs a small army of people to lobby policymakers, provide legal defence, manage and buy-off elected officials.

Somewhere between $21 and $32 trillion – or 10%-15% of all privately held wealth – is hidden behind the great walls of secrecy. Of the 100 largest companies on the London Stock Exchange, 98 routinely use tax havens. Over half of all global tradeflows between and within them so that profits can be siphoned off untaxed.

 

It’s Time to Shine a Light on the Poverty Creation Industry

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