A World Made by the Rich for the Rich: Why Tackling Inequalities is Key to a Just Transition

The following article is an excerpt from Ecosprinter’s 2021 printed edition on a just transition. We decided to bring you the articles from this edition in a digital form as well.

The yearly Oxfam report on the state of inequalities1 always triggers a periodical uproar: how is it possible that we have reached such a level of disparities? How can the rich have driven so far apart from the rest of us? And how is it that in a world where that level of wealth is made possible, there are still so many left with near to nothing? These questions float in the air for some time before being drowned in the usual flow of daily news. Nothing significant is ever done to rewire the economy.

Another report by the same organization has recently shed some light on a more specific dimension of these inequalities: the link between the level of wealth and the carbon footprint of individuals. The report Confronting Carbon Inequality released in September 2020 finds that “the richest one percent of the world’s population are responsible for more than twice as much carbon pollution as the 3.1 billion people who made up the poorest half of humanity during a critical 25-year period of unprecedented emissions growth”. The rich and super-rich weigh down very heavily on the Earth and therefore contribute immensely to climate change. Tackling this issue should therefore be at the center of discussions regarding just transition.

It is true that the super-rich do their best to convince us all that they are on the right side and are actively contributing to the fight. But what if their wealth was part of the problem?

It is true, however, that the super-rich do their best to convince us all that they are on the right side and are actively contributing to the fight: huge donations are made to funds, trusts and charities that tackle poverty or devise solutions to combat the loss of ecosystems or find solutions to climate change (the Rockefeller foundation or the Bill and Melinda Gates foundation are but two examples amongst many others). 

But what if their wealth was part of the problem? What if, however generous their donations and how sincere they are, the very fact that they were able to accumulate that level of wealth was the symptom of a broken system that is leading us all to climate breakdown? What if the mere existence of that level of wealth was simply incompatible with a just transition towards a sustainable world?

Indeed, it has become increasingly evident that the rich and super rich have great influence on how our world is shaped and on how our democratic systems (dys)function.

Many studies show how different it is to be poor in a country where the rich and super rich are many and influent, and to be “poor” in a country where those levels of wealth do not exist or do so in smaller proportions2. The existence of these levels of wealth are not without consequences on the way each and everyone of us view our own situation, nor is it without consequences on the structure of consumption. Levels of wellbeing, content and happiness nosedive everywhere the rich and super rich are influential: we perceive our situation in comparison to that of others, the huge amounts of wealth accumulated by some belittle our modest income and leaves us eternally unsatisfied. Furthermore, the tendency is contrasting: the rich become even richer and prices are driven upwards everywhere, disregarding the fact that the poor may be getting even poorer. This is what creates the “dualization” of the market, with increasing numbers of people being simply unable to take part in the it and having to rely on government handouts or the assistance of charities in order to simply make ends meet3, whilst others indulge in ever more extravagant and sophisticated expenses. Companies elaborate their innovations and new products first and foremost to cater to the needs of the wealthy, which means the more the wealthy are wealthy, the more the market is pulled away from the drive to tackle basic needs and focus on making their activities and production sustainable. 

It is quite telling that so much media attention was given to the fact that ski resorts would remain closed during the second lockdown in France, whereas at the same time one in five French people now live below the poverty line and are therefore very far from being able to fund any form of vacation, let alone costly ski holidays.

Our democratic systems also suffer immensely from the capture of wealth in a few hands. Indeed, the super rich tend to have disproportionate influence over the way policies are devised and on how our representatives are chosen. The US’ “super PAC”4 system is particularly telling, but our European democracies are not left untouched by this problem. Focusing on the French case, the work of economist Julia Cagé insightfully shows how this makes the aspiration to “equality” and “equal voices” – that is the backbone of the very idea of democracy – completely out of reach5. Political parties are mainly funded by the wealthiest, candidates to the main elections are mainly white, male and part of the upper class, and their decisions are therefore substantially less likely to meet the interests of the poor, the discriminated and downtrodden6. As a result, policies cater to the aspirations of the wealthiest and side-line concerns about the ever-growing consequences of climate change and environmental degradation on underprivileged neighbourhoods and minorities. Not surprisingly, they also fail to make sure States have the sufficient level of budget to invest in the critical changes that must be made to ensure transition to sustainable economies (clean energy, thermal renovation, public transportation, organic farming…): since the 1970s the rich have been let off from the fiscal effort, which means we are missing out on significant amounts of capital that could be used to fund transition, and that instead is serving the whims of a few privileged households. The capture of positions in the public sphere by the richest also affects the way the media processes and prioritizes information: it is quite telling, for instance, that so much media attention was given to the fact that ski resorts would remain closed during the second lockdown in France, whereas at the same time one in five French people now live below the poverty line and are therefore very far from being able to fund any form of vacation, let alone costly ski holidays.

It is way overdue to do away with the myth of trickle-down economics: the fact that some people are super rich does not lead to general wellbeing ; on the contrary, it is an important reason why we are not able to conduct the fair transition we all hope for, it is the reason why we continue to entertain dreams of ever more technology and ever more wealth, in a world where our main priorities should be making sure that generations present and future are able to live safely, cover their basic needs and be protected from the dire consequences of climate change. It is way overdue to make sure governments at last do away with the tax cuts for the super-rich, financial assets and multinationals7, and come up with fiscal systems that free up the considerable levels of capital needed to invest properly in just transition and organize a fair redistribution of wealth in our economies. This cannot be done without fixing our broken democracies: we need the voices of the struggling classes and minorities to be heard loud and clear, and we need political decisions to be made first and foremost according to the true priorities of our time – covering the basic needs of all before catering to the whims of the super-rich, preparing the future by making bold moves to tackle climate change, changing our culture from a culture of consumption and competition to a culture focused on wellbeing and cooperation.

Claire Lejeune

Claire, 26, is a green activist based in the Paris suburbs, who was formally co-secretary for the Jeunes Ecologistes. She studies philosophy and public affairs and is particularly interested in how social justice is linked with the fight against climate change.

  1. The most recent report, released on January 20th 2020, discloses that “world’s billionaires have more wealth than 4.6 billion people”.
  2. This point is extensively tackled by Angus Deaton in The Great Escape – Health, Wealth, and the Origins of Inequality, Princeton University Press, 2014
  3. This tendency was sharpened by the pandemic: in France, for example, the number of people relying on food banks to feed themselves soared, including amongst young people and students. According to an extensive study conducted in France, 50% of the people going to food banks during the pandemic were doing so for the first time: https://www.actioncontrelafaim.org/presse/covid-19-france-hausse-significative-de-linsecurite-alimentaire-en-france-selon-une-etude-de-3-associations/
  4. Super PAC (Political Action Committees) are groups that are able to accept unlimited political donations, by contrast with individuals who are allowed to give $2,500 and corporations and unions who are strictly forbidden from making donations. These super PACs play a significant role in American elections and therefore give crucial leverage to the super wealthy in the electoral process.
  5. Libres et égaux en voix, Julia Cagé, Fayard, 2020. J. Cagé is an influent economist who has worked in particular on links between the economy and the way our democracies evolve. Her previous work tackled the economy of the media, and this recent essay focuses on the underrepresentation of minorities in representative democracies -and ways to put an end to it.
  6. As an example, a 2019 study estimates that “racial and ethnic minorities” make up 4% of the European Parliament, while making up 10% of the European population (however these figures are based on third-party assessment and not self-identification which introduces a certain level of bias)
  7. As an illustration, a 2019 study commissioned by the Greens/EFA Group in the European Parliament and conducted by Petr Janksy shows that ETR (Effective Taxation Rates) in Europe are very low, much lower than the “official” taxation rate. The official rate in France was 33% in 2019 but P. Janksy finds that companies only ended up paying 17%. Furthermore these levels are decreasing; in France corporate taxation was decreased to 28% in 2020 and should be further diminished to reach 25% in 2021, in spite of the pandemic and the need of public funds it creates.