The gap between the super-rich 1% and all other people is quickly expanding. Chrystia Freeland, who is a journalist, is one of the few people who have for many years focused on studying the people who have reached the pinnacle of the business world. She observes that the wealth associated with Warren Buffet and Bill Gates equaled the wealth owned by the lower 40% of the US population and that by 1992, the top 400 richest people according to Forbes owned 99% of all wealth (TED Global). According to George Parker, “Inequality creates a lopsided economy, which leaves the rich with so much money that they can binge on speculation, and leaves the middle class without enough money to buy the things they think they deserve, which leads them to borrow and go into debt.” Such a scenario plays out majorly in the US and the UK. While the 99% continually complain about these inequalities and cry for redistribution of wealth, people fail to recognize the fact that the wealth creation by the top 1% has occurred consistently at least since the beginning of the industrialization era (Krugman). This means that the income and wealth gap has been growing since the industrialization era. The information technology era presents another era of the creation of these inequalities. Instead of focusing on ways of redistributing the wealth, it would be important to focus on the next big revolution and ensure that it does not result in the extent of inequalities associated with the past economic and business revolutions. Dealing with wealth and income inequalities in the future requires determining what the next revolution will be about and exercising social and political control over it.
The world’s richest people today are not people who own hereditary wealth, but instead, they are people proud of creating the wealth themselves. According to Freeland, this population considers that they are good people even though the world thinks differently about them. Freeland indicates that while the super-rich people consider that they undertake their civic and public duties judiciously, the 99% argue that these are the people responsible for their stagnation or deterioration, especially concerning the generation of wealth and income. Research indicates that weak labor unions, tax policies, and the dominion and power in the hands of the rich as the key reason as to why these people continuously accumulate wealth leaving the rest 99% struggling with the rising cost of living. Through this power, the top 1% create a plutocracy through which they manage to control the government policies. The deregulation of the financial sector is one of the indicators of how the plutocracy contributes to the retention of the wealth at the top of the pyramid. From an analytical perspective, however, the same dominion and power should be seen as the very hindrance to the social and political reforms that many people consider would be the solution to the inequality.
With the risk of plutocracy changing to aristocracy, it becomes important to focus not on how the super-rich build their wealth and arrest the situation at the point of wealth creation and not to struggle with redistribution of wealth (Freeland). Following the history, wealth inequalities appear to occur parallel to paradigm shifts in the economy. For instance, in the formative years of the modern United States, the top 1% were considered to comprise the likes of Cornelius Vanderbilt, who built the first railroads. Then came the likes of JP Morgan, who controlled the financial sector in the United States, Andrew Carnegie and the control of US Steel, Henry Ford and the development of the Ford Motors and the likes of John D. Rockefeller and his control of the oil industry (Collins 38). The rise of their empires and accumulation of massive wealth was supported by the fact that these people identified areas in the economy to utilize and control and in the process, they managed to build and accumulate massive wealth. Their wealth would then receive serious problems with lawsuits being filed against them and several of them being forced to explain how they acquired their wealth. While the political and social policies that helped contract their monopolies paved way for the creation of laws against monopolies since the government was very keen on promoting fair competition, they did not prevent the advent of new technologies, which led to the rise of the current super-rich population. This conclusion was reached based on the understanding the issue of deregulation and how it influences wealth creation
According to my analysis, the creation of the current super-rich population is a result of increased creativity and innovation. Warren Buffet’s creativity and innovation in the financial sector products has resulted in his massive wealth while for Bill Gates, his wealth comes from innovations in computing and information systems (Keister 67). The innovations have moved further into the power of the Internet resulting in the creation of young billionaires, such as Mark Zuckerberg. While many people remain transfixed to the increase inequalities between the 1% and the 99% population, there are a few people focused on what will create the billionaires in the next generation. As in the era of the likes of John D. Rockefeller and Cornelius Vanderbilt, the Internet-related innovations, as well as the innovations in the financial services sector, are highly unregulated. Similarly, any attempts to regulate the sector will result in the world focusing its attention on the next big thing to create the wealth of the future just like it happened when the likes of John D. Rockefeller were interdicted.
Various researchers focusing on wealth distribution and income inequalities have proposed that social and political reforms would result in more equitable distribution of wealth. However, considering the influence that the super-rich has on the political system, it will be difficult and probably slow to come up with social and political policies that will be able to enhance the redistribution of wealth. Research by various authors herein quoted has found that when asked, the super-rich emphasize the importance of working hard as the way towards decreasing the wealth gap. They deserve to be rich. Translate, this means that attempting to control the wealth through political and social reforms is likely to face a lot of resistance from the rich individuals and to consider the legal environment in which the world currently operates. There are no rules prohibiting one from being reached and targeting the rich just because they are rich may not lead to the desired results.
Henry Gates in his article titled Forty Acres and a Gap in Wealth stated that the wealth inequality gap is expanding, and no one even imagines on how to close this gap. According to Gates, the gap between underclass and black middle class shows that poverty among black people is increasing now compared to the earlier times. He argues that the biggest gap is in wealth but not in income. Unlike during the times of John D. Rockefeller when anti-competition laws were used to nail the super-rich, the current regulatory environment lacks a social and political framework to help in dealing with this gap. This is because those elected to represent the interest of the citizens are on many occasions compromised by the super-rich and instead of fighting to protect their electorate they protect the rich. According to Krugman in the article, We Are the 99.9%, the top 1% has in fact become smaller, and it could be probably at 0.1% meaning that the gap is increasingly widening. The same author in the article The Death of Horatio Alger states that the political class in the United States is increasingly voting to fortify the class inequality. The article proves that even though people vote determined to end the gap, it is increasing becoming difficult to know how best to control this inequality and that the politics are highly influenced by the wealthy who considerably finance the campaigns of the candidates that they consider being the ones that will protect their interests. What this means is that even as many people continue to recommend political and social reforms as the solution to this problem it may continue to become increasingly difficult to arrest the problem unless the regulators focus on arresting innovations long before they result to more in equalities (Krugman). Based on this understanding, this paper asserts the position that dealing with the current and future income inequalities, the world will require developing strategies for dealing with future sources of inequalities by ensuring that long before a new inventions create inequalities, there are appropriate legal and regulatory frameworks for their control. This means that the government should take time to research on new business models and institute legal frameworks to prevent the creation of wealth inequalities from the new models. Notably, there would be limited resistance to foresighted policies focused on future innovations than on those policies that focus on reducing the already acquired wealth considering that a good number of the wealthy derive their wealth from legally justifiable courses.
In concluding, this paper addressed the issue of wealth inequalities considering the observation that 99% of the wealth is owned by 1% of the population, and as some research observes, it could be by 0.1% of the population. Many researchers have proposed that social and political reforms will help resolve this issue. However, the researchers have also indicates that the political leaders seem to be working to fortify the position of the super-rich in the society. We live in a constitutional world, and so far, there has not been rules preventing someone from becoming super-rich, and so long as the wealth is acquired legally, there may be no grounds to redistribute the wealth. However, there are unique characteristics that make the plutocrats of the 21st century, similar to those of the 19th and 20th centuries, and this involves the identification of the next big thing and utilizing this paradigm shift to create wealth. Often, new developments, are unregulated , which means that by all means there are avenues to prevent the development of inequalities, but if there were ways to anticipate new developments and arrest the developments in a controlled regulatory framework, then it would be easy to deal with inequalities in the future.
Works Cited
Collins, Chuck. 99 To 1. San Francisco: Berrett-Koehler Publishers, 2012. Print.
Freeland, Chrystia. "A Startling Gap Between Us And Them In 'Plutocrats'". NPR.org. N.p., 2012. Web. 2 Mar. 2016.
Gates, Henry. "Forty Acres And A Gap In Wealth". Nytimes.com. N.p., 2007. Web. 2 Mar. 2016.
Keister, Lisa A. Wealth In America. Cambridge: Cambridge University Press, 2000. Print.
Krugman, Paul. "The Death Of Horatio Alger". The Nation. N.p., 2003. Web. 2 Mar. 2016.
Krugman, Paul. "We Are The 99.9%". Nytimes.com. N.p., 2016. Web. 2 Mar. 2016.
Packer, George. "The Broken Contract". Foreign Affairs. N.p., 2015. Web. 9 Mar. 2016.
TEDGlobal (2015). Chrystia Freeland: The rise of the new global super-rich | TED Talk | TED.com [Video file]. Retrieved from http://www.ted.com/talks/chrystia_freeland_the_rise_of_the_new_global_super_rich?language=en#t-72602
