While workers brace themselves for a tsunami of job losses, which the Chancellor’s Winter Economy Plan will do little to alleviate, it is notable that, according to Swiss Bank UBS, the world’s 2,189 billionaires have increased their wealth since the beginning of the pandemic by 27.5% (Guardian, 7 October). This builds on a longer term trend in which the super wealthy have accumulated wealth at a dizzying rate. The same source reported in 2017 that billionaires’ average fortunes had grown by 70% in the preceding three years.
Conventional economics – the neoclassical variety they teach in our universities and which failed to predict the Great Recession – has no explanation for this growing concentration of wealth. Thomas Piketty came up with a partial explanation in his 2014 book Capital in the Twenty First Century: he attributed it to the private rate of return on capital consistently exceeding the rate of growth in income and output. He called this the “central contradiction of capitalism” but he didn’t explain how or why this differential persists. To explain it we have to turn to Marx and, in particular, his Labour Theory of Value. According to this, the central contradiction of capitalism isn’t a differential return, it’s the conflict between labour (workers) and capital (those who own the means of production). While this conflict remains unresolved, the latter can extract surplus value from the former provided they can sustain the current social order through their penetration and control of government.
Can conventional politics and conventional political parties such as the Labour Party address this contradiction and resolve it? No. Big business and wealthy individuals have too much influence.
Can we not let the super-rich become even richer provided living standards for workers gradually improve as they have over the last 200 years? No. Global warming has added a degree of urgency that has previously not existed, even at the height of the cold war and under the threat of nuclear annihilation. The super-rich, however, have insufficient incentive to address the urgent need to transition to a zero carbon economy. The world’s 2,189 billionaires own more wealth than the 4.6 billion people who make up 60% of the world’s population (see link below). They can protect themselves from global warming; and they have no wish to see fossil fuels remain in the ground as much of their wealth is invested, directly and indirectly, in them. Yet keeping fossil fuels in the ground, thereby rendering them valueless, is the only known means of halting the rise in atmospheric CO2 .
A condition of addressing global warming is, therefore, in Marx’s words, to expropriate the expropriators. Only then will we be able to start to address global warming.