Not Everybody is Feeling the Crunch

High gas prices, home foreclosures may be squeezing people in the United States and Europe (in major parts of the Global South, feeling the big time crunch is a chronic condition), but not everybody is hurting. According to the BBC, there are now more global millionaires:

"The number of people worth more than US$1m (£507,000) rose to 10.1 million in 2007, a wealth survey suggests. Despite the growing credit crisis, there were 600,000 more members of the global millionaires’ club than there were a year earlier. Their combined wealth also rose, by 9.4% to $40.7 trillion, according to Merrill Lynch and Cap Gemini. The fast-growing economies of India, China and Brazil saw the biggest rises in the number of wealthy individuals. The number worth more than $30m increased by 8.8%, while their total wealth grew by 14.5%."

According to Cap Gemini’s World Wealth Report 2008, this is where the wealthiest are:

  • North America – $11.7 trillion
  • Europe – $10.6 trillion
  • Asia Pacific – $9.5 trillion
  • Latin America – $6.2 trillion
  • Middle East – $1.7 trillion
  • Africa – $1 trillion

How do these lucky few spend their money? According to the Guardian,

"They spend 16% of their money on "luxury collectibles" including cars, boats and private jets, another 16% on art-underpinning the booming global art market, 14% of their money on luxury travel and another 14% on jewellery, gems and watches. They spend 5% on sporting investments, buying up teams and race horses."

Well, that is certainly productive investment and not at all conspicuous consumption engaged in by the leisure class. But not all is rosy, however:

"The bad news for the world’s millionaires, is that their dollars are not stretching as far they used to. According to Merrill Lynch they face personal inflation rates of 6.2%."

Aww, now I feel really bad. They might have to give up some of the items listed above and that’s heartbreaking. I mean, it’s like these people in Indonesia who have to give up their children because their economic situation makes it more likely that the kids will be better off in an orphanage – via IRIN:

"Faisal, 13, has no idea why his parents dropped him off at a crowded orphanage in Jakarta six years ago and never returned. "I think they couldn’t afford my school," he said, struggling to remember their faces. (…)

Only 6 percent of about 500,000 children in Indonesia’s orphanages are actually orphans. But about 0.6 percent of the country’s 85 million children end up in institutions, one of the highest rates in the world, according to Save the Children in Indonesia.

The number of childcare centres is estimated to have jumped nearly five-fold over the past decade to more than 8,000, according to the NGO.

Florence Martin, a researcher for Save the Children, said this was an "alarming" trend, which is being underlined by rapidly rising fuel and food prices. Some parents are no longer able to pay for schooling and food, so rather than depriving their children of education they turn to the orphanages."

So, ok, that’s a little extreme, the rich won’t have to dump their kids in orphanages. That’s what exclusive private schools are for. Maybe, if the crunch continues, they will have to make them work for a living, you know, like some people in Afghanistan have to do to pay off their debts:

Bricks "Over 2,200 children are working long hours in dozens of brick-making factories in Nangarhar Province, eastern Afghanistan, to pay off their families’ debts, a survey by the Child Action Protection Network (CAPN), an Afghan body, has found.

Up to 90 percent of 2,298 children – boys and girls – who work in 38 brick-making factories in Sorkhrod District of Nangarhar Province do not go to school and are deprived of other means of education, said the survey conducted by a local non-government organisation (NGO), Wadan Afghanistan."

Let’s not forget that debt bondage is the most widespread form of contemporary slavery and brick-making is an activity where slavery is rampant not just in Afghanistan but elsewhere in Asia as well (for all things pertaining to slavery, Free the Slaves is the website to check out).

These children work 8 to 12 hours a day to help pay off their parents’ debt and brick-making is not work for children. It is dangerous and bone-breaking (literally).

But I guess as long as there is wealth production and upward "distribution", it means the system is still working! After all, if it stopped producing millionaires, now THAT would be reason to worry.

One thought on “Not Everybody is Feeling the Crunch

  1. Thanks for a great post. One of the interesting things about people in slavery is how much they really want a chance to work for themselves and, though it may sound strange to people in the rich North, to become consumers. It is just that for them consumption means three meals a day instead of one, school for their kids, and a chance to live without constant fear. Slavery is a horrible violation of human rights, but once people are out of slavery they really need a chance to build up that minimum of income for a decent life, a chance to learn, and a chance to become citizens. Remarkably the average cost of helping someone in slavery to achieve that level of human dignity is only about $400 – or about $11 billion to end slavery forever – a tiny tiny fraction of the wealth you describe in your post.

    For more about how we will end slavery and how much it will cost, see my book Ending Slavery: How We Free Today’s Slaves.
    All best wishes,
    Kevin Bales

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