January Issue 2022 – Rich Law, Poor Law

Abolishing billionaires: Why do billionaires exist? Should they?

Billionaires are a sign of economic failure and cannot be justified on any ground.

Wealth inequality:

Globally, Oxfam International revealed in 2020 that the world’s 2,153 billionaires are wealthier than 60% of the population (4.6 billion people). Similarly, in a survey conducted by Office for National Statistics between April 2018-March 2020, it was found that “the wealthiest 10% of households held 43%” of all of Great Britain’s wealth while the “bottom 50% held only 9%”. The names that can be seen at the top of the UK’s 2022 Rich List are the likes of:

Sri and Gopi Hinduja, worth over £28bn, in the industry and finance sector.
Sir James Dyson, at £23bn, in household goods and tech (Dyson).
David and Simon Reuber, worth over £22bn, having sourced their wealth from the property and internet sector.

How do billionaires become billionaires?

A number of factors come into play here. Approximately 1/3rd of billionaires come from privileged backgrounds, and thus their wealth is inherited. The remaining 2/3rds (with $30 million or more net worth) are considered “self-made”. It would be difficult to argue that individuals who become wealthy through their own hard-work don’t deserve it – right? But there may be foul-play involved.

Rebekka Ayres is of the contention that it is not possible to be a self-made billionaire, arguing that “this is the language of a larger myth that justifies wealth inequality” by reinforcing that people are poor merely because they are lazy or have made bad choices. In reality, the wealthy do not always pay their honest tax percentages, finding loopholes that are out of reach for most working-class families: last year, Rishi Sunak’s family was accused by Labour of avoiding paying tens of millions in taxes. Jurisdictions with tax havens (low taxation rates) also come in handy. The top 3 “biggest enablers of global corporate tax abuse” were the British Virgin Islands, the Cayman Islands, and Bermuda, all of which fall under British overseas territories. The tax money denied by billionaires to governments could have been spent on schools or hospitals.

Exploitative labour practices are also relevant. Whether directly or indirectly, the ultra-rich are profiting from an unjust economic system, and aiding such injustice by for example, “denying workers a living wage” and “ensuring that medicine and health care costs remain high”. One example can be seen in the sex-work industry, with OnlyFans facing scrutiny for reports of “filmed child sexual abuse, sex trafficking, and other non-consensually recorded sex acts” on its website.

And then there is the role of political affiliations – billionaires shaping policies to prioritise their own agendas. An “elite Tory dining club” that enjoyed “direct access to Boris Johnson” has given the Conservative Party more than £130 million since 2010. With the Tory party depending on such funding, it is suggestive that the super rich are helping to pull the strings behind the scenes.

Should billionaires exist?

Ayres called the existence of billionaires “immoral”, which I would struggle to disagree with. But it is worth assessing the impact of so few having so much.

For starters, does having billions make people happy? Research conducted in 2019 suggested that “the “income satiation” point” was approximately €55,000/year, indicating that sitting in the billions is unnecessary for maximising emotional wellbeing.

And does the presence of billionaires actually lead to growth, social mobility and climate justice? When examining the effect of billionaires on a country’s economy, Ana Swanson summarises the two sides of the argument: the classic position is that inequality propels growth as the benefits of their investments and innovations trickle-down for the rest of society to enjoy and that wealth-redistributive programs are inefficient; others argue that inequality drags growth because it ensures the poor stay poor and it leads to political instability. In fact, research conducted by Sutirtha Bagchi and Jan Svejnar found that “the higher the proportion of billionaire wealth in a country, the slower that country’s growth”. While it is true that billionaires create jobs and wages, justifying billionaires on this basis falters when workers are struggling to survive, especially now given the energy crisis. Quoting Thomas Piketty, Max Lawson wrote: “no matter how justified inequalities of wealth may be initially, fortune can grow beyond any rational justification in terms of social utility”. The reality is that the existence of billionaires impairs social mobility and economic progress.

The picture isn’t much brighter when looking at carbon emissions. Oxfam reports that billionaires annually are “responsible for a million times more greenhouse gases than the average person”. It’s not like they can’t afford to put climate change action plans in place!

What should be done?

Politicians from both the Labour and the Conservative party can be seen to promote the notion of equality of opportunity and social mobility, yet this is impossible alongside a “grossly unequal society”. A “disadvantaged child will nearly always and everywhere become a disadvantaged adult” due to poorly run schools and lack of support available at home. Achieving a meritocracy then, which is a system’s rankings based on an individual’s abilities and their merit, is impossible to do without dealing with the surrounding inequalities. Equality of opportunity will remain an illusion if the gap between the rich and the poor is not reduced – an easy place to start is addressing the problem of billionaires.

How, then, can the billions of billionaires be redistributed? Along with “correcting under-taxation, legislators must close loopholes to make tax laws watertight”. This money can then be directed towards funding for the NHS, an overworked and under-funded system. There may even be scope to argue for the introduction of a Universal Basic Income which involves regularly giving citizens a sum of income. But working towards eradicating poverty and building fairer societies means bringing “an end to extreme wealth” being held in the hands of so few.

Author: Talita Zavrsnik de Campos

The Covid-19 Vaccine Patent and how the Global North have Failed the Global South … Again

By Sanskriti Bahuguna

BBC reports that 1.3 million people in the UK have already received their first dose of the COVID-19 vaccine. In a disappointing yet unsurprising juxtaposition, Brazil, the country with the third-highest cases of the coronavirus, is scrambling to secure vaccines. This inequity can be attributed to the patent protection of the COVID-19 vaccine.

Before venturing any further, it is imperative to understand the relationship between pharmaceutical companies and patent laws. In short, a patent is a form of intellectual property (IP) protection that grants pharma-companies exclusive rights to make and sell their drugs for 20 years by preventing the supply of cheaper, generic versions by their competitors. They function as a reward to the rigorous research and development (R&D) in drug manufacturing and provide additional incentive for future innovations. This system has been ratified by various international treaties and subsequently national laws, however, as COVID cases continue to surge, concerns have begun to emerge on whether IP protections of a potential COVID vaccine will hinder its access.

Given that it is unviable for a handful of companies to manufacture COVID vaccines to meet global demand, and to provide a solution to the rising concerns of developing countries, South Africa and India jointly presented a patent waiver proposal at the World Trade Organisation’s (WTO’s) Trade-Related Aspects of Intellectual Property (TRIPS) Council in October 2020. It proposed a temporary suspension of IP protections to make vaccines accessible to all countries by allowing multiple actors to start production sooner, instead of having manufacturing concentrated in the hands of a few patent holders in rich countries. The proposal gained support from not only low-and middle-income countries, but also leading UN human rights experts.

Unsurprisingly, the pharmaceutical industry and High Income Countries (HICs), displaying a suspiciously united front, did not welcome the proposal, expressing the view that it will stifle innovation. An EU spokesperson went as far as to argue that there is no evidence that IP rights would hamper the access to COVID-19 medicines and technologies in any way. Furthermore, the HICs argued that equitable access could be achieved through voluntary licensing, technology transfer arrangements, and the donor-funded COVAX Advance Market Commitment for vaccines.

Most of these options are either impractical or outright senseless. Firstly, the fact that IP does not create access issues is false. There are numerous examples to illustrate this, such as the legal battle between Médecins Sans Frontières (MSF) and Pfizer in India over its pneumococcal vaccine, where a patent prevented the development of alternative versions of the vaccine. A similar situation followed in South Korea where Pfizer sued SK Bioscience, creating an absence of affordable PCV-13 vaccines in the market.

Voluntary licensing is the practice of IP-holders to voluntarily grant their patents and IPs. To illustrate, Pfizer, the company with the most reliable vaccine refused to forfeit its patent even when it uses elements of public research. Compulsory licenses, on the other hand, serve as the mechanisms for governments to override patents, copyrights, or industrial designs, which provide access to patents without the holder’s consent. In practice, the issuance of individual compulsory licenses is a time-consuming process, which may be contested by the technology owners. Additionally, the HICs have displayed a pattern of threatening Low Income Countries (LICs) with WTO disputes when they attempt to claim an exception. Interestingly, none of the rich countries have opted for the compulsory licencing route, choosing to instead collaborate with big pharmas by drawing up exclusive vaccine contracts.

Thirdly, whoever contended that technology transfers work is simply incorrect. Tech transfer via company-led initiatives has delivered insufficient results. For example, AstraZeneca’s vaccine agreements with Indian and Brazilian companies lacked transparency on the costs. Additionally, Pfizer and BioNTech showed no sign of licensing or technology transfer of their patented products. It is understandable that an industry which capitalises on the exclusivity of information and technology seldom participates in its exchange without attached mistrust and reluctance. Even when a transfer does take place, most LICs are not in a position to take advantage of the information after they access it due to infrastructural and capital constraints. These acts of goodwill mostly end up serving as mere PR strategies, as demonstrated by the virtually unused COVID-19 Technology Access Pool proposed by Costa Rica.

Moreover, the COVAX initiative is an ambitious collaboration led by the WHO, aiming to procure 2 billion doses of the vaccine. However, it has been riddled with shortages of funds, requiring $23.9 billion in 2021 to fulfil its goal. More problematically, Duke University reports that COVAX has secured only 700, 000 vaccine doses so far. In comparison, HICs reserved 6 billion doses for themselves through bilateral deals with pharmaceutical companies.

HICs have benefited from being home to the leading pharmaceutical companies and possessing the economic and infrastructural means to conduct mass rollouts. Rich countries with 14% of the world population managed to stockpile 53% of the eight most promising vaccines, a feat most reminiscent of the 2009 Swine Flu. They blocked the IP waiver that could have helped achieve timely and affordable access to vaccines for all countries. It is unfathomable that the HICs actively chose to side with pharmaceutical giants that are only focused on reaping the highest profits, during a global pandemic.

These acts of greed were to the detriment of poor countries. Nearly 70 poor countries could not vaccinate 90% of their populations this year, whilst Canada alone hoards 10 doses per citizen. Pfizer and BioNTech gear up to make £9.8bn from the coronavirus vaccine whereas more than 150 million people will be driven into extreme poverty as a consequence of the pandemic. It should not be a radical statement to believe the patent for a COVID vaccine should be owned by all of us or no one at all. Researchers at Duke believe that there won’t be enough vaccines produced for the whole world before 2024. It seems that first world countries in their greed have forgotten about the cardinal rule of viruses: no-one is safe until we all are.

Sanskriti is a first-year student at the University of Bristol with a keen interest in intellectual property rights, particularly, patents and copyright.

Populism: BY the People, but is it FOR the People?

Does right-wing populism bring economic benefits for working people?

By Charlie Bevis

The storming of the US Capitol is a day that will go down in history: an almost impressive feat in the age where historic, unprecedented events have become run of the mill. The image that shall be forever emblazoned in my memory is that of an insurrectionist posing at the front of the US Senate Chamber. This half-dressed, unknown man standing where Vice President Mike Pence had been sitting moments earlier was shocking. Was it indicative of the success of a growing populist wave? Not quite. The rioters were soon removed, and as the vote-counting finished that night, many in Trump’s party began distancing themselves. However, we must ask ourselves whether those voting for populist candidates, and standing by them through thick and thin, were reaping any of the promised rewards.

Defining populism is tricky because it takes different forms and can be easily confused with a movement that simply has broad support. It can be identified by the labeling of an ‘enemy’ that restrains a political executive to distort or directly challenge the ‘will of the people’. Consequently, populists tend to undermine institutions that hold them accountable. For Trump, this has been the independent judiciary, the media, and most recently, Congress. Economic populism more specifically targets financial institutions who are held responsible for those facing financial difficulty; income inequality and wage stagnation are blamed on technocrats who favour imports and immigrant workers at the expense of domestic industry and native employees. The economy is ripe fruit for populist rhetoric because economists often disagree on which policies will benefit working people; populists can utilise this disagreement to blame their chosen ‘enemy’.

Unfortunately, populist rhetoric enjoys offering simple solutions to complex issues. Clemens Fuest, President of the Ifo Institute, argues that whilst populists are apt at identifying problems in the economy, they argue for expansion “irrespective of the global economy” and consequently are “short-termist”. One example of this is Trump’s Tax Cuts and Jobs Act, which was sold as putting money back into the pockets of working people by creating a $1.5 trillion tax break. Whilst this will increase spending in the short-term, it will worsen the budget deficit and ultimately hinder growth, fuel inflation and reduce competitiveness in the long-term. Another such policy was Trump’s trade war with China, which gained him favour for standing up against globalisation and cheap imports. Yet, this has already hurt both American farmers and US consumers, who have paid over $34 billion in tariffs. A desire to appear tough on the ‘enemies of the people’ is at the expense of a more sustainable approach.

“A desire to appear tough on the ‘enemies of the people’ is at the expense of a more sustainable approach.”

This highlights a further issue, populists are willing to sacrifice good economic policies to tackle social or cultural fears, e.g. immigration. This is encompassed by Michael Gove’s comments during the Brexit referendum that people had “heard enough from the experts”. Many of whom had warned that post-Brexit immigration laws would, in the long-term, impact labour mobility and reduce foreign investment. Despite this, Nigel Farage and other populists were willing to risk an economic downturn to appease those who feared the changing UK demographic. Evidently, leaving too much power to those who may need a quick boost before the next election, or have little regard for political stability, is not sustainable and populism risks too much damage in the long run.

Alternatively, some believe that economic populism can become necessary when people do not have control over their financial institutions. Dani Rodrik argues that the last few decades have seen too much power being deferred to independent regulatory bodies because it was thought these bodies would propose more sustainable economic policy. Paul Tucker argues that the balance has swung too far in the opposite direction and bodies such as the European Central Bank (ECB) have filled a “vacuum left by politicians”. He argues that this is dangerous for working people because these institutions are vulnerable to the influence of wealthy companies who lobby to dilute necessary regulations. One study found that 98% of official advisors to the ECB are representatives of private financial interests. Meanwhile, the public has little power to change policy because these institutions are insulated from political interference. Whilst some would argue that economic policy is too technical to be simplified into election slogans and populist rhetoric, it is also undemocratic to leave the people with no choice at all. This highlights a problem in how we respond to economic populism; controlling it by taking power away from politicians might inadvertently cause them to respond more radically, as we saw with Brexit. We must ensure that policies designed for the benefit of working people continue to make those very people feel included.

Another factor that adds to the confusion is that right-wing populist economic policies vary to such an extent that it is impossible to argue whether these policies benefit working people without analysing specific movements. For example, the Front National in France has argued for “generous government spending” and increased social welfare, whilst Austria’s Freedom Party believes that expenditure and tax should be cut. This variation is because the recent rise in populism is fuelled by cultural fears rather than economic ones. This was seen in one survey which asked which issue is “most important” for those voting for populist candidates, a staggering 40% said “immigration” whilst only 5% said “poverty and inequality”. Consequently, Vox argued that fiscal policy just “isn’t very important to right-wing populists”. This may explain why the rise in Western right-wing populism is not built around a unifying economic policy. Overall, the effect on working people will differ according to the country and the specific policies being proposed.

“the recent rise in populism is fuelled by cultural fears rather than economic ones”

In conclusion, whether right-wing populism will financially benefit a country’s working population will depend on the specific national populist party and their policies. However, it is the nature, rather than the content, of such policies that should concern us. A tendency to resist accountability measures and seek short-term solutions should make us wary of unsustainable economic populism, in all its forms.

Charlie is a final year law student interested in how law and politics interact. He is hoping to study this relationship further by undertaking a Masters course or volunteering with a think-tank once he finishes his degree.

From Violent Black Looters to Frustrated White Protestors – Racial Identity Makes All the Difference to the President of the United States

By Taina Maneus

On Wednesday 6th January 2021, supporters of the current president Donald Trump invaded the Capitol in Washington DC, as Congress was in a joint session to confirm Joe Biden’s electoral victory. ‘The mob’, as some commentators referred to it, ransacked the building, trespassed offices, and even got hold of Nancy Pelosi’s private mails.

The response of the police has prompted many social media users to compare the events unfolding to the Black Lives Matter protests of last summer. Instead of the tear gas, military equipment and violent stances displayed last year, police officers could be seen retreating as the mob breached the Capitol. One law enforcement agent was even caught taking selfies with mob members.

Beyond the response of the police, it is difficult not to perceive the hypocrisy of the 45th President of the United States Donald Trump in his massively differing responses to both of these events.

Presidential Hypocrisy of Donald Trump

The inconsistency in Trump’s response to rioting is self-evident. For starters, the language he has used recently presents a sharp contrast in how he views his right-wing supporters versus BLM protestors. On more than one occasion, the President has referred to BLM protestors as “thugs, anarchists and agitators”. In contrast, he called the pro-Trump mob “great patriots” who have been so badly & unfairly treated for so long.

This would not be the first time that Trump has empathised with his supporters in relation to their questionable, and often violent, actions. For example, when they allegedly attempted to dangerously bully a Democratic campaign bus in Texas they were praised by Trump, whose only response was a statement that he “loves Texas”. On the other hand, when the NFL players peacefully kneeled in protest against police brutality, he called them “a son of a b****,” and said that they lose their jobs. The empathy that the President shows towards his supporters rapidly disappears when the same shoes are on the feet of black people.

For President Trump the dichotomy is clear. The predominantly white protestors are just frustrated people who only use violence because of what they endure at the hands of other people. By contrast, black people are naturally violent thugs, who protest for evil reasons. These stereotypes are by no means new, but arguably never before have they been so blatantly employed by the leader of a liberal democracy.

Additionally, contrary to his tweets addressed to the Capitol invaders, Trump does not directly address BLM protestors; instead referring to them in the 3rd person. Whilst this might appear insignificant, it is not. Addressing a person or group of people directly, shows respect, and dignifies the people concerned. On the other hand, referring to a subject as they, knowing they are watching and listening, shows a total lack of regard. It also has the effect of dehumanising the BLM protestors, as it suggests that they do not deserve to be addressed or that they are unable to communicate like any other human being. This approach only serves to further marginalize the black community.

Trump vs Antifa

With this in mind, there is a certain irony that Trump has now been impeached, and is set to stand trial for inciting last week’s insurrection. In 2020, the President adamantly alleged that Anti-fascist activists (Antifa) were ‘a terrorist group’, based on the incorrect belief that they incited BLM protestors to riot and loot in the cities. This is in spite of lack of evidence to support his conspiracy. In comparison, videos have been released showing the President inviting his supporters to go to the Capitol minutes before the riot started. He, alongside his personal lawyer, is shown saying things like “let’s have trial by combat”. It seems impossible the President could have had any intention than to incite violence.

Indeed, it was not only the terrorist label attributed to Antifa that was harsh with how the President handled the riots during the BLM protests. Aside from the name-calling, Trump requested that the police use force and violence towards the protesters. He criticised governors for not being harsh enough. He then proceeded to call on national guards to be deployed against protestors. He did not hesitate to threaten the lives of BLM protestors.

Donald Trump spoke of the protestors as if they were enemies of the State rather than distressed citizens for whom he has a responsibility. His words showed little care for their lives, and very little understanding of the movement. Unlike the frustrated white Trump supporters, whose pain and hurt he said he understood, Trump did not show any empathy for the black Americans, who feared being unlawfully killed by the police.

One crucial difference which explains this hypocritical difference in approach between Trump’s response to the BLM protests of 2020 and the Pro-Trump revolt is that the latter was for the benefit of Trump, with the protesters campaigning for his re-election. Who would not support people who fight for them? On the other hand, the BLM movement does not directly affect the president. As a white, rich man, he does not have to deal with police brutality. For somebody who is often referred to as narcissistic and openly praises himself for his actions during a pandemic whilst thousands of people are dying, it has become increasingly clear just how little black lives mean to him.

Taina Maneus is a final year law student with an interest in social justice. She hopes to do a Masters degree in September 2021, and will then decide which area of law she wants to specialise in.

Austerity, COVID-19 and the International Monetary Fund

By Joey Marshall

According to the International Monetary Fund (IMF), austerity should not be needed to mitigate the effects of the coronavirus pandemic – especially in advanced economies. However, this position does not extend to its policies on distributing COVID-19 loans to so-called ‘developing’ countries. In fact, the IMF has consistently pushed austerity to ensure debt repayment in poorer Global South countries whose economies have been hit hard by the pandemic. Notably, this rigid stance on debt repayment has resulted in significant cutbacks on public healthcare systems and social protection globally, adversely impacting those countries most in need of support. Such arrangements highlight the realities of the global rich law, poor law dichotomy.

To provide some background information, in October 2020 the head of fiscal policy at the IMF, Victor Gaspar, stated that since the costs of servicing government debt are expected to remain lower than the growth rate, budgetary consolidation should not be necessary in most countries. However, the IMF did emphasise that in particular, emerging economies under financial constraint ought to balance the costs and burdens of undertaking additional ‘binding’ fiscal support during the crisis.

On one level, the IMF placing fiscal stimulus before the ‘health’ of Global North countries’ public finances is a highly favourable reversal from previous policies, which have often centred on retrenchment. For example, in response to the 2008 financial crisis, the IMF in its 2010 Fiscal Monitor ‘prematurely’ advocated austerity to promote economic stability. Most notably in the UK, this has resulted in a detriment to economic recovery ‘as both the deficit and debt remained elevated’.

However, the central issue here is not the impact of the IMF advocating fiscal stimulus without austerity for Global North countries with advanced economies. Rather, the key concern is that the IMF’s policies fail to recognise the needs of emerging economies unable to sustain additional debt. This framework grants a lower standard of support for struggling countries and results in a continuous cycle of cost-cutting whereby, as stated by Ana Arendar, Oxfam Head of Inequality Policy, ‘ordinary people pa[y] the price for austerity measures.’

According to the United Nations Conference on Trade and Development’s (UNCTAD) annual report, such policies of retrenchment during this health crisis could potentially result in a ‘lost decade’ for emerging economies. It was reported that between 90 million and 120 million people could be pushed into extreme poverty. In this way, without a global economic recovery plan aimed at prioritising the growth of countries most in need of financial support, there is ‘no hope for sustainable recovery.’

To put the IMF’s rigid stance into perspective, since March 2020, 84% of the IMF’s 91 loans have terms in place that push austerity to ensure debt repayment, for instance by reducing costs related to healthcare and social protection. Notably, in countries such as Ecuador, which has seen its healthcare services collapse in April 2020, the IMF has recommended the country reverse processes to increase healthcare spending and end cash transfers to people unable to work. Moreover, a recent £5 billion loan to Ecuador has seen cuts to fuel subsidies, which adversely impacts poor people reliant on such financial assistance. In addition, Costa Rica has seen mass protests erupt against a potential £1.35 billion loan from the IMF, namely because the terms of the agreement would involve public sector wage freezes. This practice set by the IMF clearly goes against Gaspar’s vision of advocating minimal use of austerity globally to ensure strong economic response to the pandemic. Furthermore, the IMF seeking rigid conditions to ensure debt repayment demonstrates its practical prioritisation of the interests of the wealthy before upholding its core values: to reduce poverty globally and support sustainable growth.

Similarly, the World Bank provides a further example of international financial institutions consistently placing debt repayment before effective support of developing countries. Notably, despite the World Bank pledging £124 billion in emergency funding on healthcare and social protection, its refusal to allow debt relief for certain countries exacerbates the cycle of emerging economies falling increasingly into debt. This is especially the case in countries such as Kenya and Pakistan, as well as 62 other nations, that during this crisis are spending more on debt payments than healthcare. In this way, to ensure a sufficient degree of support, governments have to either enact policies cutting costs in other sectors or take on additional debt. A more favourable solution would be for the World Bank to commit to similar measures agreed upon by the G20 to suspend the £3 billion debt owed by the 73 poorest countries in the world.

In an attempt to address key issues in the architecture of international debt for developing countries, the IMF chief Kristalina Georgiva recently wrote on the need for reform. Notably, she proposed that debt be restructured where it is unsustainable, highlighting recent issues in Ecuador and Argentina. This would involve increasing debt transparency through an enhanced debt limits policy and continuing to provide debt service under the Catastrophe Containment and Relief Trust. Although such initiatives are certainly necessary, they fail to address the urgency of increasing debt and the need to prioritise diminishing austerity in developing countries. In this way, it would be favourable for the IMF to more directly respond to the misery caused by IMF-backed austerity, notably by reforming the framework of debt repayment in line with the eight alternatives suggested by the International Labour Organization.

In this way, the IMF’s advocating of the reduction of COVID-19 austerity measures in the developed world reflects the clear divide in the standard of support offered to countries in different financial situations. Indeed, whilst ‘developed’ countries are given the green light to utilise their financial positioning by taking on additional debt freely, emerging economies are faced with the challenge of overcoming rigid debt repayment frameworks. To truly support countries in overcoming the economic effects of the pandemic, the IMF should instead adopt a common standard that prioritises eradicating austerity in all countries.

Joey is a final year law student at the University of Bristol with a keen interest in the influence of law in global contexts.

COVID: Are certain groups suffering more than others?

By Zainab Rhyman Saib

The world has come together in a way it has never before. The global pandemic, COVID-19, has united the world over shared fears and safety/health concerns. Whilst the virus does not discriminate physically, this does not paint a clear picture of what impact the virus has had on the world in relation to causing unemployment, homelessness, and income reduction. This blog entry will endeavour to understand whether certain groups are suffering more than the others and the effect this has on the powers of those who already wield a disproportionate amount of wealth and power.

It can be said with full confidence that the pandemic has caused a widespread and increased reliance on the welfare state. This is unsurprising given that those who are most susceptible to the virus’s physical and economic effects are also those who are most reliant on welfare, such as the young, the old, and the unwell. As of August 2020, 750,000 jobs have been subjected to the wrath of the virus, leaving families with no choice but to turn to state aid in order to sustain themselves and their families. Though Universal Credit appears to ease the financial burdens faced by many working-class families across the UK, the administrative and conditional aspects to gaining access to these public funds are often paradoxical to its purported aims. Benefit caps, disabled claimants losing out due to delays in assessment and the drop from legacy benefits to Universal Credit means that the system which is meant to see the poor through the pandemic is causing further suffering.

“the system which is meant to see the poor through the pandemic is causing further suffering”

Finances aside, the poor are suffering in other dimensions. Though the furlough scheme intends to extend to five million employees, there remain essential roles left to be fulfilled. Often times these roles involve those in society that are most dependent in times of crisis: delivery drivers, healthcare workers, and supermarket workers – jobs that do not come with the privilege of being fulfilled at home in the way that most white-collar jobs are able to be. Not only does this heighten the risk of exposure to the virus, but these jobs are regularly carried out without adequate PPE, meaning the fact that the working classes make up the largest proportion of COVID deaths is, unfortunately, unsurprising.

Can a similar sense of suffering be seen with the wealthy? Especially following Rishi Sunak’s claim that ‘we’re all in this together’? Arguably, no. A distinction between wealth and income has to be made to understand this: whilst the lower classes rely on income to sustain themselves (consequently the very source of money that is being cut further due to the virus), the upper classes can rely on wealth, which takes the form of inheritance, landed properties, and intangible assets with the prospects of future income. Wealth survives generations and is capable of being garnered without labour. Similarly, the virus can be argued to improve the financial positions of the wealthy. Intangible assets in the form of shares and net worth have invariably risen – Bezos has seen his wealth rise by over $48 billion, whilst the Zoom founder, Eric Yuan has seen his rise by over $2.5 billion. These forms of wealth and income remain with the classes who have the means of maintaining them as their wealth is generated and sustained through the labour of others (e.g. tech developers, delivery drivers and factory workers). The wealthy do not need to be exposed to the virus to generate enough, and then some, to sustain themselves and their families.

Will this binary in suffering increase the powers of those at the ‘top’? There are grounds to assert that is the case. Post-WWII saw a collectivist society, united over nationalism, one ‘enemy’, and shared suffering. Though this virus brings with it a similar sense of collectivism, society has progressed significantly since those days in terms of mindset and wealth disparity. Pairing this with the fact that views on this virus are polarised to such extent that while most recognise it to be extremely dangerous, some believe it to be a globalist conspiracy, it is not surprising that the shared collectivism between the ‘top’ and the ‘bottom’ seen in WWII, is absent in this historical moment. But how does this relate to the powers exercised by the wealthy?

Delanty notes the reduction in state-interventionist welfare policies and a shift towards individualism as the product of societal progression and a move towards individualism – generating new fears of downwards mobility. Thus, those in power, a group Wolfgang Streek refers to as the ‘Marktvolk’, influence policy changes to maintain their status in society out of fear of losing their positions. This is analogous to the current state of welfare within the UK. Due to their growing monopolies, contrasted to the falling capital of the lower classes because of COVID, the few (wealthy upper classes) influence social and economic policy and have governments cater to the few. This is despite the fact the lower classes dramatically outweigh the rich in democratic voting power and is largely due to debt states’ reliance on the financial market, operated by the Marktvolk.

Thus, COVID is seen to be discriminatory in its effects. The poor are suffering three-fold: increased exposure to the virus, loss of jobs, alongside difficulties in accessing public welfare aid. However, these effects are not universal as the most affluent in society are actually gaining in both health and wealth. Although it is not apparent on face-value, this newfound wealth consequently leads the wealthy to further gain in power and thus they have more influential powers and opportunities to have a say on the public policies, which will ultimately cause the rich to be richer, and the poor to be poorer.

Zainab Rhyman is a third year LLB student. She has catered her studies at university to focus on social justice and inequality.