Billionaires Beware

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Jan 7 2020 – The latest November 2019 UBS/PwC Billionaires Report counted 2,101 billionaires globally, or 589 more than five years before. Earlier, Farhad Manjoo had seriously recommended, ‘Abolish Billionaires’, presenting a moral case against the super-rich as they have and get far, far more than what they might reasonably claim to deserve.

Anis Chowdhury

Manjoo also argues that unless billionaires’ economic and political power is cut, and their legitimacy cast in doubt, they will continue to abuse power to further augment their fortunes and influence, in ways detrimental to the economic, social and public good.

Benign billionaires?
In defence of billionaires, Josef Stadler, head of ultra-high net worth at UBS Global Wealth Management, argued that their wealth “has also translated into their philanthropy, as billionaires seek new ways to engineer far-reaching environmental and social change.”

Philanthropic ethics expert Chiara Cordelli notes that philanthropy and donations have diverted social responsibility from governments, and created other problems by bypassing democratic political processes and accountability. “The philanthropist should not get to decide – in virtue of her or his disproportionate influence – which world we should live in”.

An ostensibly benign ‘billionaire effect’ cannot offset the adverse impacts of billionaires’ wealth accumulation, tax avoidance and abuse of power to corrupt political processes and policy making. Rather, ‘every billionaire should be regarded as a policy failure’. To create fairer societies, we need to end extreme wealth concentration and its problematic consequences.

Dubious sources
Robert Reich has shown that a significant share of billionaires’ wealth is undeserved and does not bear any reasonable connection to their ability, intelligence or contribution, as expected in a society supposedly based on meritocracy and fair competition.

Oxfam estimates that about a third of billionaire wealth is inherited. There is no real economic case for inherited wealth as it undermines social mobility, economic progress and meritocracy, the main basis of legitimation in modern society.

Other work finds that about 43 per cent of billionaire wealth comes from crony connections to governments and monopolies, e.g., when billionaires use such connections and corruption to secure government concessions and contracts.

Jomo Kwame Sundaram

In developing countries, this share was even higher, 56 per cent, according to a 2015 Oxfam study. The Economist’s crony capitalism index also suggests that corruption and crony connections to governments are behind much billionaire wealth.

Another source of billionaire wealth is abuse of monopoly privileges granted by patent laws. While intellectual property has been justified as necessary for innovation, recent research, summarized by the The Economist, disputes the supposed link between patent rights and innovation, and deems the patent system a dysfunctional way to reward innovation or new ideas.

Since the 1980s, patent rights have been extended well beyond what may be considered necessary to incentivize innovation. For Richard Posner, a respected US judge, “such extensions offer almost no incentive for creating additional intellectual property”.

Insider trading – taking advantage of privileged information not yet made public – has been significantly abused for ‘unfair’ advantage in markets. The New York Times has found, “Some of the most prominent cases of illegal insider dealings have involved very wealthy people”.

Growing wealth concentration
A large and growing share of the global economy is controlled by a few large transnational corporations (TNCs). Decades of mergers, acquisitions and ineffectual anti-trust legislation have seen market power concentrated despite claims to the contrary.

Such TNCs, cartels, other monopolies and oligopolies extract lucrative rents, enabling them to secure super-profits, accelerating wealth accumulation and concentration at the expense of petty producers, workers and consumers.

The way wealth is used by the super-rich confirms their own ‘social disutility’. They accumulate more quickly by paying as little tax as possible, making good use of tax advisers and havens. A study found that the super-rich pay as much as 30% less tax than they should, denying governments billions in lost tax revenue.

The extremely wealthy also get the best investment and tax evasion advice, enabling billionaire wealth to increase by an average of 11% annually since 2009, far more than average investors and ordinary savers get.

‘Dark money’ corrupts societies
The secretive Society of Trust and Estate Practitioners (STEP), representing over 20,000 wealth managers, has successfully lobbied many governments to reduce taxes on the richest. STEP has spent billions to ‘buy’ legal impunity, politicians and the media to lower taxes on its clientele. Such lobbying has accelerated wealth concentration and accumulation.

Such ‘dark’ money is used to influence elections and public policy the world over. An Oxfam study has shown how politicians have been ‘bought’ by Latin America’s super-rich, e.g., with substantial financial backing for ethno-populist, racist and religiously intolerant leaders.

Over a century ago, monopoly power was seen as a major threat to the US economy and society. Anti-trust legislation and action, especially by President Theodore Roosevelt, broke up cartels and monopolies. Years later, his cousin, President Franklin Delano Roosevelt warned, “government by organized money is just as dangerous as government by organised mob”.

Neoliberalism “oversold”
However, in recent decades, neoliberal economists have taken a much more benign view of oligopolies and monopolies, distinguishing them from classical liberal economists committed to market competition.

Conversely, insisting on competition in small developing economies has effectively prevented domestic firms from becoming internationally competitive by building on economies of scale and scope.

Significantly, even the International Monetary Fund, which imposed neoliberal policies for nearly four decades as a condition for credit support, now accepts that neoliberalism was “oversold”, while the World Bank acknowledges disappointing growth after neoliberal reform.

Deregulation, liberalization, privatization and globalization have strengthened the market power of corporations, reduced the progressivity of tax systems, reduced public provisioning, increased the frequency and intensity of financial crises, and slowed growth and development.

How Gender-based Violence Should be Reported in the Media

A study of Yazidi survivors found that some were negatively affected by their experiences with journalists, expert Sherizaan Minwalla said. Credit: UNFPA/Khetam Malkawi

By External Source
UNITED NATIONS, Jan 7 2020 – Sexual and gender-based violence terrorizes women and girls around the world, affecting as many as one in three women. Reporters play an essential role in bringing these cases to light so that authorities can take action and prevent further abuses. Yet reporting on gender-based violence comes with serious risks to survivors.

When journalists tell these stories carelessly, or without proper training, they can leave survivors feeling exploited or exposed to stigma and retaliation.

When members of the Yazidi community faced targeted sexual violence and enslavement by the Islamic State in Iraq and the Levant (ISIL, also known as ISIS or Da’esh), news reports sparked urgent action by the international community.

Some women hoped sharing their stories would help bring justice. But others felt the reporting itself caused harm, said Sherizaan Minwalla, a legal expert who has studied the issue.

“We explored how Yazidi women themselves felt about the ways in which journalists gathered and reported on their stories,” she explained.

“Overall, a majority of our respondents described experiences with, or perceptions about, reporters that suggested a patterned breach in ethics among journalists, who appeared to disregard the extent to which the reporting of the story might negatively impact highly traumatized survivors, with further harm to women’s individual and collective well-being.”

Dr. Nagham Nawzat specializes in providing care to Yazidi survivors in Iraq. Interviews with health professionals, counsellors and the community can help reporters show the wider impact of sexual and gender-based violence. Credit: UNFPAIraq/Turchenkova

But new initiatives are aiming to help journalists navigate the dangers of this important reporting. UNFPA and the Rutgers University Center for Women’s Global Leadership (CWGL) are partnering to help provide resources and guidance to reporters, among other efforts.

“Journalism constitutes one of the few available avenues for [survivors’] stories to be heard,” said Jafar Irshaidat, a UNFPA communications specialist in Jordan. “Unfortunately, journalists can inadvertently become part of the problem.”

Irshaidat has led trainings for journalists that both encourage the coverage of gender-based violence and caution reporters about the potential to cause harm. These seminars use videos and guided discussions to explore issues of consent, protection, re-traumatization and myths about victims of violence.

“This training was truly eye-opening. I was never really exposed to information on gender-based violence and the sensitivities of reporting on it,” said Bushra Nairoukh, a reporter in Jordan. “I feel more responsible as a journalist now that I have been introduced to this important subject.”

UNFPA has also worked with humanitarian partners to create media guidelines and a Syria-specific handbook for journalists. UNFPA offices in Yemen, Syria and elsewhere have also conducted media workshops on these issues.

These efforts are already making a difference. Since 2014, more than 500 journalists have attended the UNFPA trainings held in Jordan, and some 1,500 have been reached through related messages.

“I learned a lot about the potential consequences of reporting and how to carefully phrase my writing to ensure that I am not harming those I’m trying to help, particularly vulnerable women and girls,” said Fatma Ramadan, from Egypt.

Krishanti Dharmaraj, the Executive Director of CWGL, and Dr. Natalia Kanem, Executive Director of UNFPA, at the partnership signing. Credit: UNFPA/Malene Arboe-Rasmussen

CWGL, the founder of the global 16 Days of Activism against Gender-based Violence campaign, has been working in parallel to create a handbook, website and app to help journalists address these issues.

In 2018, CWGL and UNFPA jointly held consultations with dozens of journalists in Amman to understand their challenges and needs. The information gathered will help inform CWGL’s handbook and other resources under development.

Many journalists have indicated that trainings should reach further into the newsroom, as well. “Journalists complain that, in many cases, their stories are dropped at the editor’s table, stressing the need to target editors in any awareness efforts,” Irshaidat said.

At the same time, he added, journalism offers opportunities for creative thinking and problem solving. Reporters can be encouraged to find novel ways to report on gender-based violence without relying on invasive personal interviews, such as “more explorative features that examine the wider social ramifications of gender-based violence and male dominance,” he said.

On 19 December, UNFPA and CWGL officially partnered together to work towards eliminated gender-based violence. The partnership will include efforts to reach, inform and empower journalists – who can then help change global perceptions about violence and gender norms.

“We are looking at our work around the journalist initiative and shifting the discourse on how [gender-based violence] is reported in the media,” said Krishanti Dharmaraj, the Executive Director of CWGL, at the partnership signing in New York.

“This alliance is going to pick up the pace,” said UNFPA Executive Director Dr. Natalia Kanem. “It is going to accelerate action.”

This was originally published by the UN Population Fund (UNFPA).