By Jonathan Tame, 20th January 2016
A report by Oxfam published this week shows that for the first time, the wealthiest 1% of the global population own more than the other 99% (you currently need a net worth of £533,000 to be in the top 1%). It also reveals the incredible figure that just 62 people at the very top own as much as the poorest half of the world combined. In 2010 the equivalent figure was 388 people, but in the last five years the wealth of the bottom half has decreased by 41%, in addition to those who own the most capital amassing even more.
As long as the concentration of global wealth continues to increase, it fuels the perception that global capitalism is failing to deliver a better life for at least half the world’s population. Can the present economic system retain its legitimacy while extreme inequality continues to grow? Or is disparity of wealth reaching toxic levels?
In the Bible, free markets for goods and services are permitted in biblical law, which guided the development of ancient Israel. However, limits were placed on the trade of land, labour and capital, to enable people to stay rooted in extended families, free from long-term debt, and always have a stake in the economy. The accumulation of land or capital by a small élite was the complete antithesis of this.
Capitalism as a framework for economic development is valuable when it allows entrepreneurs to access finance and create jobs or grow enterprises in a market economy. Over the last three decades, this business approach to development has been highly effective in lifting people out of poverty and transforming communities in lower income countries.
However, markets are imperfect, and the form of capitalism we have now has inadequate mechanisms built in to prevent excessive accumulation of wealth (and therefore power) by a tiny élite, at a time when the global economy has been struggling to emerge from the worst recession in decades.
Regulation by governments is considered the only effective way to correct the failures of the market system, but time and again it’s clear that giant companies are effectively unaccountable, and by moving profits to where taxes are lowest, can effectively pay the level of taxation they want. Thus Oxfam is calling for a crackdown on tax havens and other schemes to reduce tax avoidance by the ultra-wealthy and multi-national corporations.
What else can be done? There is a bottom up way of reducing inequality, which has a faster and more direct effect on the poorest in society, which is to pay fair wages – an imperative running right through the Bible from the Old Testament prophets, to the apostle James in the Epistles. The Fairtrade movement has been a success in raising the incomes of small commodity producers around the world, but in higher income countries, campaigns such as the Living Wage call for employers to pay more than the minimum legal requirement, and instead pay all their staff enough to live on – a living wage, currently set at £8.25 in UK and £9.40 in London.
Jubilee Centre has just been accredited by the Living Wage Foundation, and we hope that many Christian employers will join the campaign and encourage others to do likewise. Let’s not just wring our hands as we watch wealth disparities break new records, let’s at least do one thing which is in our power – to ensure each person's labour is valued justly, and their dignity as people made in God's image is recognised.