Governments, companies and civil society must take drastic measures to reduce global inequality in order to improve lives, save the environment and stem rising populism, experts gathered at the World Economic Forum’s annual meeting in Davos, Switzerland, said Friday at a panel called ‘The Cost of Inequality.’
The panel, developed in partnership with TIME and moderated by TIME’s CEO and Editor-in-Chief Edward Felsenthal, met to discuss the ways inequality has contributed to a populist backlash around the world.
One of the top issued raised by panelists was the assertion that multinational corporations and the very wealthy are not paying “their fair share” of taxes.
“No one is talking about tax evasion,” said the historian Rutger Bregman of those gathered at Davos. “I feel like I’m at a firefighters’ conference and nobody is allowed to talk about water.”
Also high on the agenda was the recognition that low corporate tax rates, today the policy of many governments around the world, are a relatively recent historical phenomenon. “Governments have chosen not to tax fairly, to get rich companies and rich people to pay their fair share of taxes,” said Winnie Byanyima, Oxfam International’s executive director. “Because they don’t collect those taxes, they don’t put enough money into health, education and social protection of their people.”
The result is rising levels of inequality around the world. According to a recent Oxfam report timed to coincide with Davos 2019, 26 billionaires had the same wealth as the poorest 3.8 billion people combined. About half of the world’s population lives off less than $6 per day.
“It’s not difficult to see why, if you look at the business model,” said Byanyima. “We have a business model that has, over the years, grown to maximize for a few owners of capital and to cheat everybody else. The businesspeople who run these businesses, on top of that, avoid paying their fair share of taxes. [They] have built loopholes across the tax system. We have a tax system that leaks so much.”
“Extreme inequality is out of control,” Byanyima went on. “It’s bad for everyone … We want the burden of taxation to be put on the rich.”
Also on the panel was the famous environmentalist Jane Goodall, who told the audience that inequality was worsening damage to the environment. “I see the harm that we’ve inflicted on the natural world,” she said. “And a lot of that is due to poverty. This is where the inequality part comes in. If you’re living in a rural part of Africa, and you’re out in the environment, you’re going to cut down the last trees, even on the steep slope, even if you know it’s going to cause erosion, because you’ve got to feed your family.”
Bregman, too, lamented the hypocrisy of the “1,500 private jets flown in [to Davos] to hear David Attenborough speak about how we’re destroying the planet.” He went on: “What we need is way higher taxes on the wealthy so that we can actually fund this green transition as a planet … It will never be successful as the private sector alone”
Others explained how the received wisdom that inequality is acceptable as long as the poorest become richer too is flawed. “Equality is a basic requisite for development,” said Alicia Bárcena Ibarra, the executive secretary of the Economic Commission for Latin America and the Caribbean. “The most efficient economies of the world, equality is embedded in their economic development,” she said, citing the Scandinavian countries as examples. “There is a positive correlation between [their] productivity and equality.”
But not everyone agreed with the panelists assertion that higher taxes were needed. One member of the audience said the panel should focus on was that “what people really want is the dignity of a job.”
“Instead of redistributing wealth, why don’t we talk about creating wealth?” he said, citing record-low unemployment rates in the United States following a major corporate tax cut.
Byanyima, from Oxfam, responded. “It also depends on what you are counting,” she said. “I took a taxi in Nairobi recently and I was charged less than $2. I asked the taxi driver, he was from one of these companies, I won’t mention which, I said: ‘How much are you getting?’ He said, ‘20% must go to the global company.’ He said, ‘The rest I have to share with the owner of the taxi.’ I asked him where he lives. He said, they rent a room, three taxi drivers. They sleep in turns. Six hours, five hours. Because none of them can afford to rent a room. That’s the job. Those are the jobs you are being told about.”
She added: “Globalization is bringing jobs. The quality of the jobs matters! These are not jobs of dignity. In many countries, workers no longer have a voice. They are not allowed to unionize, they are not allowed to negotiate for salaries. We’re talking about jobs, but jobs that bring dignity.”
The members of the panel were: Alicia Bárcena Ibarra, executive secretary of the U.N.’s Economic Commission for Latin America and the Caribbean; Jane Goodall, the famed primatologist; historian Rutger Bregman, author of Utopia for Realists; Oxfam International Executive Director Winnie Byanyima; and Shamina Singh, president of the Mastercard Center for Inclusive Growth.