Guess what? This blog isn’t going to be about fitness either! I bet that admission blew you away. The main point of this blog is going to be economics. Ooh, exciting!
Before we get cracking though, I must admit that I am not well versed in economics and I don’t really have the capacity to think about more complex financial concepts because my brain falls out when I try. However I am hoping this means I’ll present some talking points in a way similarly economically challenged minds can digest comfortably. Of course it’s possible that I make asinine points and sound like a doofus as well. Which will it be?? Let’s find out together…
I feel like I qualify much of the content on this blog with this, but here it goes again: I’m a massive sports nuffie. For all the good sports bestows on the world it has some gaping caverns of immoral and corrupt behaviour at every level. But mostly the top (ooh, foreshadowing).
American sports is my kind of jam, although I still love all the garden variety sports too: Soccer, AFL and an emerging fondness for cricket. In America and Europe, for most leagues it is currently the off-season. What this means is that everyone takes a break. And a bunch of people get PAID. Well, a bunch of men get paid…but we’re not going to get into that here, that’s a blog for another time as it is a serious and glaring issue that deserves its own entire spotlight.
Men are getting PAID because as clubs jostle and seek any competitive edge to take them to the top of the mountain, they will solicit the services of new players and pay more than any other club to entice them to ply their trade in new colours.
The sports entertainment industry is a juggernaut and for all that detractors hand-wave it as worshipping laundry, the amount of money and influence is obscene. The amount of money being thrown around is equivalent to the power that the team or leauge has. For example, there have been recent reports that North Melbourne football club is willing to throw $1.6 million at Alastair Clarkson to become their head coach.
That’s a lot of money, and commentators are rightfully speculative that any club is willing to commit that many resources to pay for one person to inhabit their walls. However, this seems like almost nothing when you compare it to the American football league, the NFL.
This young man has put pen to paper on a contract that makes him almost a quarter of a billion dollars in exchange for five years of service. I don’t know too many young men who would turn down an offer like that, but I do see an issue with that being an acceptable outcome in a world absolutely rent apart by rising inequality. But it gets even more obscene. Let’s look at Juan Soto, a baseball player for Washington in America’s league, the MLB:
Now, this is clearly one super talented individual, but it shows that there are different worlds we live in and young Juan lives in a reality that 99% of humanity does not. The truth is that Juan’s reality is propped up on the backs and the suffering of most of the 99% as well. These worlds do not exist harmoniously. So it makes it even more galling when you see things like the pictured tweet below:
Juan Soto, an individual, who is in almost all ways indistinguishable from you or I, who swings a bat at a fast moving ball (I understand the financial implications and windfall a person of his stature brings in by reputation and supplementary income) feels entitled to half a billion dollars for the job he does. So much so that the paltry sum of $440 million was rejected outright.
I don’t know the man, he could be a wonderful human being and give away all of his money to those more needy, but it’s not really about him. He is the stark vision of a system that has reached parody levels of untenable for the future of equitable life on earth.
Let’s scale it up even more. In 2017 a study by Oxfam showed that the eight richest people (men) in the world owned more wealth than the bottom half of all people, some 3.6 billion of us (but like, also not us, because as much as we can be poor in a wealthy country, we are still sheltered from the harshest realities of the people these eight rich dudes unsconscionably abuse to pad their wallets and curry more power and influence). Below I’ll quote the article of what this top eight list looked like back in 2017:
“The eight wealthiest individuals on the planet are Microsoft founder Bill Gates (with a net worth of $75 billion); Amancio Ortega, Spanish founder of Inditex ($67 billion); Warren Buffett, CEO and largest shareholder of Berkshire Hathaway ($60.8 billion); Carlos Slim Helú, founder of Mexican conglomerate Grupo Carso ($50 billion); Jeff Bezos, founder, chair, and CEO of Amazon.com ($45.2 billion); Mark Zuckerberg, co-founder, chair, and CEO of Facebook ($44.6 billion); Larry Ellison, co-founder and former CEO of Oracle Corp. ( $43.6 billion); and Michael Bloomberg, founder, owner, and CEO of Bloomberg, Inc. ($40 billion).”
Obscene. It beggars belief. But let’s go forward to 2022 and look where things stand on the rich list, still all men (weird?). This list written on June 1st, 2022 has Elon Musk at the top with a cool $224 billion. In just five years the richest person, man, on earth has gone from $75 bangers to $224, a casual $152 billion increase. The change in wealth alone over those five years is more than double the total amount poor Billiam had in total back in 2017.
But let’s look in real time at the daily changes at the top of the pops, check out this screen grab:
Wowsers. Elon is up to $253 billion since the start of June, which is another $27 billion. In 2017 the 8th richest person in the world had $40 billion and space cadet Elon is poised to eclipse that in a couple months of sitting around watching his stock grow. What is interesting to notice here is that the daily change for our pal Elon was $404 million – which adds up to an impressive 0.36% of his total worth. Not even half a percent. If half a percent of my wealth changed I don’t think it’s enough to trigger the number going up by a single cent.
The one day change in Elon’s wealth is also roughly the amount our recent friend Juan Soto rejected from Washington to play baseball for.
Juan Soto’s offer was over 27 times that what North Melbourne was willing to break the bank for to pay Alastair Clarkson.
The $1.6 million offer is over 23 times the average annual income in Australia of $67,860 (I wish I was average).
Which is 33 times more than the bottom 46% of the world who live on $5.50 or less per day.
The pandemic has only driven the stake further into the poorer people of the world and buoyed the already unsconscionable wealth of those at the top. Take a look at this chart:
As the article says, the atrocities that Russia is inflicting on Ukraine only make this worse. To quote:
“The pandemic wiped out years of progress in reducing poverty and caused economic inequality to spike. The world’s 10 richest men have doubled their fortunes since the global health emergency began, while the incomes of 99% of humanity are worse off as a result, according to Oxfam. More than 160 million people have also been pushed into poverty, the UK charity estimates.
Now Russia’s war in Ukraine is deepening the gloom. Beyond the battlefield, the conflict has upended commodity markets and global supply chains, driving up prices for energy and food.
For developing countries that are highly dependent on fuel and food from Russia and Ukraine, the impact of the war will be devastating, according to International Monetary Fund Managing Director Kristalina Georgieva. “To put it very simply, a war in Ukraine means hunger in Africa,” she told Foreign Policy magazine.”
We started with the nonsensical world of sports stars getting paid ridiculous amounts of money for being talented in a field that, while very entertaining and we need sports, does not appreciably move the needle in advancing humanity out of this absolute mess.
I don’t care how talented Juan Soto is. I don’t care how nice people he is or how hard he works. He does not deserve $440 million when half the world has to survive on $5.50 per day. I will bet you that so many of those people have to work just as hard or harder in dangerous, often demeaning and unsatisfying jobs for their pittance.
Juan gets to be idolised and play a game he loves as a job. I don’t bedgruge his elite talent being handsomely rewarded but he does not need that much money. Renewable energy start ups do. Organisations helping to lift people out of poverty do. Organisations that stop human trafficking do. Organisations that work to end the illegal wildlife trade and poaching do.
Now, as I said earlier, Juan might be the best guy ever and give most of his money to organisations like this but I don’t have any idea what he does with his millions. My point is that the money works best when it goes to organisations who are having a tangible, positive effect on the world. They are fighting injustice, inequality and the crimes that big money try to cover up.
I don’t believe a young man who is very good at baseball is the best person to be making decisions about where half a billion dollars should be spent. He may not be the worst, but certainly not the best.
Similarly, the richest people in the world, with all the power and influence they have to drive changes and force people to play their game have manifestly failed in their duty to the common good. In a time of immense human stress and suffering the combined richest people in the world’s biggest deliverable was to massively increase their own wealth and watch as more people collapsed into poverty and most of the world was and continues to be worse off.
There is enough wealth in the world that this is absolutely avoidable. No one needs to go hungry or be without shelter. No one needs to work three jobs to put food on their table but the concentration of wealth by a very few of us (just about all men) means that to support their disgusting opulence, billions must struggle and suffer.
I don’t know what living in that world does to a person. But to my mind, I cannot fathom how you could sit in your own skin on a yacht that cost billions of dollars while people are sleeping rough in your own hometown and the world burns around you. Clearly there is a level of dissonance and it may not be malicious but it is not tenable to continue like this in perpetuity.
The higher up the chain things go, the worse it seems to be. Which is why we need to change things up. I know this is a meme but I actually love this as a solution:
My solution would be that individuals and companies can only amass a certain dollar figure of profit before the money goes to a globally administered fund. From there, those (or any) individuals or companies can apply to have those funds released to pursue their own projects. They’d be assessed and funds distributed if found to be worthwhile to advance humanity.
You made $80 billion dollars? Well done, humanity will redistribute 79 billion of those for the greater good. You want to pursue housing the homeless or reforestation? Great, here’s some cash with a contract to achieve those goals. You want to create a credit card loyalty program or a new cryptocurrency…I’m sorry your application has been denied.
Is this a well thought out and robust plan? Absolutely not. But instead of Juan Soto or Elon Musk deciding what to do with unfathomable amounts of money, a globally accountable and equally representative group of highly educated and vetted individuals with a track record of compassion, wisdom and pragmatism I think would do a far better job of ensuring wealth distriution gives everyone a chance at a dignified and fulfilling life without the stress and anguish of poverty and lack.
The frustrating part is how manufactured and needless much of the suffering on earth is. The agonising part is that it would be instantaneous to begin the solutions to remove it. The cruel part is it will never happen.
The people with the power and money to change anything have the least inclination to do so and will gleefully watch the world burn from their billion dollar yachts or space ships or whatever. What we are seeing is that instead of narrowing, the gap is widening, all the power and money is being sucked up by ever fewer and ever more sociopathic hedonists. The problem with any solution is that they are all vulnerable to corruption and greed. If you looked at the state of play in the world you’d have to believe they are human beings defining characteristics. There’s a lot of solutions that are great as ideas but crash and burn in reality because humans cannot be trusted to act in the interest of the many rather than the few.
I suggested a solution but it belongs in the realm of wishful thinking at the moment. In terms of actionable solutions I have no idea. If anyone else knows how to turn this ship around, please tell me. Or better yet, please get turning. I’ll keep writing to my loyal audience of three people about these issues but I guess while we work on a better plan, much like those rich assholes at the top literally do, we get to figuratively just suck it up.
Sorry for the downer ending, I’ll try harder for something more upbeat next time.