Former United States President Barack Obama believes that ballooning wealth inequality is a threat to society, and that those who have the means should help those who are less fortunate.
“Right now I’m actually surprised by how much money I got,” the 44th President said in his address to more than 10,000 people gathered in Johannesburg, South Africa, on Tuesday. “There’s only so much you can eat. There’s only so big a house you can have. There’s only so many nice trips you can take. I mean, it’s enough.”
The Obamas made more than $20 million between 2005 and 2016 thanks in large part to two lucrative book deals, according to an analysis by Forbes.
Wealthy people should give money to those who are less fortunate, Obama said in the speech, which was his highest-profile appearance since leaving office.
In the years from 2009 to 2015, Obama gave more than $1 million to charities, according to Forbes.
“You don’t have to take a vow of poverty just to say, ‘Well, let me help out... let me look at that child out there who doesn’t have enough to eat or needs some school fees, let me help him out. I’ll pay a little more in taxes. It’s okay. I can afford it,’” Obama said.
“I mean, it shows a poverty of ambition to just want to take more and more and more, instead of saying, ‘Wow, I’ve got so much. Who can I help? How can I give more and more and more?’ That’s ambition. That’s impact. That’s influence. What an amazing gift to be able to help people, not just yourself.”
There have been significant improvements in global health and prosperity over the last hundred years, but many have been left behind, the former President said.
“While globalization and technology have opened up new opportunities, have driven remarkable economic growth in previously struggling parts of the world, globalization has also upended the agricultural and manufacturing sectors in many countries. It’s also greatly reduced the demand for certain workers, has helped weaken unions and labor’s bargaining power,” Obama said.
“And the result of all these trends has been an explosion in economic inequality. It’s meant that a few dozen individuals control the same amount of wealth as the poorest half of humanity. That’s not an exaggeration, that’s a statistic,” he said.
Indeed, 42 people have the same amount of wealth as the poorest half of the world, according to a study released in January by the global charity Oxfam. And 82 percent of the money made in 2017 went to the wealthiest 1 percent of the global population, the report says.
Many of America's richest agree that extreme wealth inequality is a detriment to the economy.
"As the economy evolves, it reallocates resources," billionaire Berkshire Hathaway CEO Warren Buffett said on PBS Newshour in 2017. "Now, the real problem, in my view, is ... the prosperity has been unbelievable for the extremely rich people."
"If you go to 1982, when Forbes put on their first 400 list, those people had [a total of] $93 billion. They now have $2.4 trillion, [a multiple of] 25 for one," Buffett said. "This has been a prosperity that’s been disproportionately rewarding to the people on top."
Mark Zuckerberg, the billionaire founder and CEO of Facebook, has expressed a similar sentiment. "We have a level of wealth inequality that hurts everyone," Zuckerberg said in his May 2017 commencement address at Harvard. "Let's face it: There is something wrong with our system when I can leave [Harvard] and make billions of dollars in 10 years, while millions of students can't afford to pay off their loans, let alone start a business."
Billionaire entrepreneur Richard Branson has said a universal basic income, or a free cash handout from the government to all citizens, should be implemented as a solution to wealth inequality. “A basic income should be introduced in Europe and in America,” Branson told The New York Times in June, responding to the question, “What do you think those in positions of power should do to address social problems like income inequality?”
“It’s a disgrace to see people sleeping on the streets with this material wealth all around them,” Branson said.
Workers left behind
In particular, the new economy has left behind those with outdated skill sets, Obama noted.
“For once solidly middle-class families in advanced economies like the United States, these trends have meant greater economic insecurity, especially for those who don’t have specialized skills, people who were in manufacturing, people working in factories, people working on farms,” Obama said.
Obama suggested that alternative solutions like the controversial basic income, or even reshaping the workweek, ought to be considered to address the rapidly evolving workforce.
"The biggest challenge to workers in countries like mine today is technology," he said, awknowledging that an increasingly automated workforce is expected to displace a large number of workers in coming years, while changing the nature of work for many others.
"And so we’re going to have to consider new ways of thinking about these problems, like a universal income, review of our workweek, how we retrain our young people, how we make everybody an entrepreneur at some level," Obama said. "But we’re going to have to worry about economics if we want to get democracy back on track."
Curbing wealth and power inequality
With extreme wealth comes extreme power, Obama said.
“In every country, just about, the disproportionate economic clout of those at the top has provided these individuals with wildly disproportionate influence on their countries’ political life and on its media; on what policies are pursued and whose interests end up being ignored,” Obama said.
This pervasive gap between the rich and the poor in terms of both money and power is fundamentally bad for society as a whole, the former President said.
“History shows that societies which tolerate vast differences in wealth feed resentments and reduce solidarity and actually grow more slowly,” Obama said. “And when economic power is concentrated in the hands of the few, history also shows that political power is sure to follow — and that dynamic eats away at democracy.”
The way forward, Obama said, is for political systems to protect all participants and for the wealthy to contribute to the larger benefits of society.
“For almost all countries, progress is going to depend on an inclusive market-based system," Obama said, "one that offers education for every child; that protects collective bargaining and secures the rights of every worker; that breaks up monopolies to encourage competition in small and medium-sized businesses; and has laws that root out corruption and ensures fair dealing in business."
He also called for progressive taxation, where "rich people are still rich, but they’re giving a little bit back to make sure that everybody else has something to pay for universal healthcare and retirement security, and invests in infrastructure and scientific research that builds platforms for innovation."
See also:
- Billionaire Richard Branson: America should give out free cash to fix income inequality
- Mark Zuckerberg: Success comes from 'the freedom to fail,' so billionaires like me should pay you to do that
- Billionaire Warren Buffett says 'the real problem' with the US economy is people like him
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