Socialist Studies Socialist Studies

Tax the Rich or Abolish Capitalism

The capitalist class increased its wealth during the world pandemic. The World Inequality Report said that 2020 saw the steepest increase in billionaires' wealth on record.

Meanwhile, 100 million people sank into extreme poverty, the report from the Paris based World Inequality Lab said:

"The richest 10% of the population now takes 52% of global income and the poorest half just 8%"

The 228-page report, whose authors are part of a group founded by social reformer and economist Thomas Piketty, also said that since 1995, billionaires' wealth had risen from 1% to 3%.

"While the wealth of billionaires rose by more than €3.6tn (£3tn), 100 million more people joined the ranks of extreme poverty," said Mr Chancel, one of the authors of the report, noting that extreme poverty had been previously falling for 25 years.

The report concluded that:

* On average, an individual from the top 10% of the global income distribution earns €87,200 per year
* An individual from the poorest half of the global income distribution makes just €2,800
* The poorest half of the global population barely owns any wealth, possessing just 2% of the total

The researchers found that the world's 52 richest individuals saw the value of their wealth grow by 9.2% per year for the past 25 years, well above less wealthy social groups.

Tax the rich?

To help redress the imbalance, the economists call for a "modest progressive wealth tax on global multi-millionaires" in order to redistribute wealth. They also call for tougher action on tax evasion.

They can "call all they like". Capitalist governments and politicians do not exist to redistribute wealth like some latter day Robin Hood.

The economists do not go to the root cause of the problem. The reason why the capitalist class gets its wealth in the first place is their ownership and control of the means of production and distribution. Their private ownership to the exclusion of the world's majority allows them to exploit.

Workers are forced to sell their labour power as a commodity in exchange for a wage or salary. The world's working class are paid less in wages and salaries than the wealth they produce. "Surplus Value" Marx called it.

It is because of their class ownership, protected by the machinery of government, including the armed forces that the capitalist class live off the unearned income of rent, interest and profit.

Professor Piketty and those at the world Inequality Lab want the impossible. They want distribution on the basis of the private ownership of the means of production and distribution by capitalist states who act as "the executive of the bourgeoisie" and by politicians who job is to serve the interest of the capitalist class not the working class.

The right conclusion - the socialist conclusion - to take from this vast and obscene inequality of wealth is to abolish capitalism and to replace the profit system with common ownership and democratic control of the means of production by all of society.

Only the world working class can establish socialism. And this requires conscious and democratic action in socialist political parties. Until then the rich will get richer and the rest of the population will get second best or nothing at all.

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