Of Wealth and Power

Bharat Dogra

Since the 1990s the top 1 per cent captured 38 per cent of the growth of wealth, while the bottom 50% could capture only 2%. In the top 0.1% section, the per capita wealth of an adult amounts to 14,133,400 euros. According to Forbes listing, there were 2755 billionaires in the world in 2021. Among them the 724 who are in the USA are likely to be closer to the levers of control and power compared to those in other countries, at least as of now.This is not to understate the influence of billionaires in other countries, just two are known to exercise huge power and dominance in a leading country like India.

In the USA according to an organisation named Americans for Tax Fairness, during the pandemic the top 10 billionaires increased their wealth at the rate of one billion dollars per day, or 12600 dollars per second. As per data released on January 19, the wealth of this top 10 increased from $600 billion to 1300 billion, or more than doubled, during this period of about 2 years or so.

Several of these richest billionaires, as well as their multinational companies have become highly controversial in the context of their domination of crucial sectors in ways that can adversely impact most people in world. These sectors include health, food and farming, trade, transport, information, finance, banking and other crucial sectors, even outer space! Several of these super-rich, their cronies and employees, have joined in key positions in specially created international platforms with representatives of government, UN and other international organisations to create such influential groups that, for all practical purposes, what they decide spreads quickly to a large part of the world.

These billionaires and their cronies also use the platforms of loosely structured organisations to advance imperialist agendas of control and profit, covered up suitably, which cannot be stated directly or officially by certain governments or even by corporate entities. In this context some recent data from the USA regarding the extent of control exercised by a few companies is revealing.

Recently on February 17 , 2022 Senator Bernie Sanders, Chairman of the State Budget Committee, USA,made a statement before the Committee which is very significant in terms of exposure of the extent of wealth and concentration among top investment companies and the control exercised by them over the economy and the lives of poor people. These signficant comments which have drawn widespread attention within a short time were delivered at a hearing ‘Warrior Met and Wall Street Greed: What Corporate Raiders are doing to Workers and Consumers’.

Sanders started by saying,”Today, we are going to discuss an issue that is almost never talked about in Congress and the corporate media--the incredible concentration of ownership and power that a handful of Wall Street investment firms have over our entire economy, and the enormous impact they have on workers, consumers, and virtually every person in our country.Today, in America, just three Wall Street firms—BlackRock, Vanguard and State Street—manage $22 trillion in assets.”

To put this figure in perspective, he added,” the amount of money these three firms control is nearly equal to the entire Gross Domestic Product (GDP) of the United States and more than five times the GDP of Germany.These three firms are major shareholders in more than 96 percent of S&P 500 companies. In other words, they have significant influence over many hundreds of companies that employ millions of American workers and, in fact, the entire economy.”

Sanders went on to highlight the extent of their control in some important sectors—Banking-These three Wall Street investment firms are the largest shareholders of some of the biggest banks in America—JP Morgan Chase, Wells Fargo, and Citibank.

Transport—They are among the top owners of all four major airlines—American, Southwest, Delta and United.

Healthcare—Together, they own an average of 20 percent of the major drug companies.

More generally, Wall Street firms have bought up thousands of nursing homes where profits and mortality rates have soared.They are also responsible for the astronomical prices at emergency rooms, increasing prices by over 60 percent and driving over half a million Americans into bankruptcy each year.

Sanders stated—These three companies control nearly one-fourth of votes at shareholder meetings, leveraging their power to influence CEO compensation, stock buybacks, environmental commitments, mergers, and pension benefits. In addition to the Big Three, a small handful of Wall Street vulture funds—so-called “private equity” firms—also have an enormous control over industry after industry after industry.

This control impacts people in terms of growing unemployment and reduced incomes. Over the past two decades, private equity takeovers have slashed nearly 1.3 million jobs and shut down nearly 20,000 stores in the retail industry—including Toys RUs, Payless, and Dollar General.

At a time of increasing homelessness and eviction threats, these companies have been increasing their control and profits in the housing sector too. Last year, a small number of Wall Street firms and other extremely wealthy investors bought about one out of every 7 homes in some of the largest cities in America and now own over a million apartments, hiking rents by as much as 30 percent and neglecting needed repairs and the safety of tenants.

A small number of Wall Street firms control half of the newspapers in America, therby exercising a big influence on media.

Sanders indicted a “handful of Wall Street firms that buy up companies, load them up with debt and make a huge amount of money by laying off workers, slashing wages, shipping jobs overseas and eliminating healthcare and pension benefits.”

According to recent studies, Sanders pointed out, after these Wall Street firms takeover companies as a result of a “leveraged buyout,” jobs are slashed by 13 percent, wages fall by 6 percent and the companies that Wall Street firms takeover are 10 times more likely to declare bankruptcy.

In the case of Warrior Met Coal in Brookwood, Alabama where workers have been engaged in a strike for 11 months fighting for economic justice and dignity on the job, in 2016 a group of private equity funds led by Apollo and Blackstone acquired Walter Energy and formed Warrior Met Coal.As part of the restructuring, workers were forced to take a $6 per hour wage cut—over 20 percent—and massive cuts to their health and retirement benefits. This is just one of several cases.At a moment of unprecedented corporate greed in this country; attacks against working people are taking place in company after company, in industry after industry.

Sanders concluded with some memorable words, ”Never before in American history have so few owned so much and had so much power over our entire economy.”

These observations of Bernie Sanders are very important for understanding the ongoing phase of the political economy of the biggest economy and biggest military power of the country, and should be widely discussed. At a wider level, the concentration of wealth and power as well as its extremely harmfu, wide-rangingl impacts should get much more attention worldwide.

[The writer is Honorary Convener, Campaign to Save Earth Now. His recent books include A Day in 2071, Man over Machine, Planet in Peril and Protecting Earth for Children.]  

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Vol 55, No. 5, Jul 31 - Aug 6, 2022