Oxfam: 'How the super-rich are perpetuating modern-day colonialism'

I am an optimist. But in these very dark times, optimism feels increasingly fragile. Having spent my entire career working with civil society organizations, activists and campaigners, we have often grappled with a fundamental question: “What is ailing our world?” I am convinced, now more than ever, that the root cause lies in the grotesque inequality of our rigged economic system – a system deliberately designed to enrich a wealthy elite, at the expense of ordinary people.

With the clock ticking on the promise of the Sustainable Development Goals to deliver a better, more sustainable future for all, our world remains starkly divided. The gap between the richest 1% and the rest of us has widened into a chasm.

Oxfam’s new report, Takers Not Makers: The unjust poverty and unearned wealth of colonial inheritance, published today shows that in 2024, billionaire wealth skyrocketed, increasing three times faster than in 2023. Over the past year, total billionaire wealth increased by $2 trillion and 204 new billionaires were created, on average almost four new billionaires per week.

The report shatters the illusion that extraordinary wealth is a reward for extraordinary talent, or that huge fortunes are built on hard work – the comfortable belief that we live in a meritocracy. Nothing could be further from the truth. Our report sheds light on two major areas of unearned wealth.

The first is the rise of a new oligarchy fuelled by inheritance, cronyism, and monopoly power. We are seeing an accumulation of wealth and power, further entrenching an economic system that works only for a select few. Our analysis shows that 60% of billionaire wealth is either from crony or corrupt sources, monopoly power, or is inherited.

In 2024, for the first time, there were more billionaires minted through inheritance than entrepreneurship. Every billionaire under the age of 30 inherited their wealth. In the next decade, trillions will be handed down to heirs, much of it largely untaxed, creating a new Downton Abbey era for the 21^st century. That is not good for our economy, democracy, or for our collective future.

Beyond inheritance, monopoly power and crony connections to governments are crucial in perpetuating inequality. Monopolistic corporations control markets, dictate terms, and set prices with impunity, further enriching their billionaire owners. Cronyism and corruption allow the super-rich to ensure government works for them, and not for ordinary people.

Beyond this problem of unearned wealth, our report delves deeply into a painful history of colonialism, that casts a long shadow that continues to rupture our world. We know that colonialism benefited the rich countries of the Global North, over the Global South. But further to this, colonialism benefited primarily the richest in rich nations. Empire coincided with huge inequality in colonising powers. To use one example, the richest 10% extracted 50% of all income in the UK throughout the height of the British Empire.

Colonialism and slavery imposed severe exploitation, violence, racism, and domination on colonized people. The effects of the slave trade, which was crucial to the building of economies of European colonies, are still felt today. For example, after the abolition of slavery and its independence from France, Haiti was forced to borrow to reimburse slave owners 150 million francs – the equivalent of $21 billion, with 80% of this going to the richest slave owners. This started the cycle of debt and disaster that continues to date.

And for those who believe that colonialism, however terrible, was a historical crime, I would argue that there is so much in our modern world that is colonial. A system that continues to extract wealth and power from ordinary workers in the Global South to rich people in the Global North, a phenomenon we call "billionaire colonialism."

To use just one example, rich nations use their hard currencies and privileged position in the economic system to extract a constant rent from the Global South, who are forced to borrow in foreign currencies at exorbitant rates. Using new research from the World Inequality Lab we demonstrate that $30 million dollars an hour is being paid by the Global South to the richest 1% in the richest countries. Time and again we find that the flow of money, of resources, is from South to North, from the poorest to the richest nations, when the opposite should be the case. For every $1 given in aid by richer nations, $4 are paid back to rich countries in this way. We know that these resources are not flowing to everyone in rich nations equally but are instead overwhelmingly benefiting the already wealthy. Those who are struggling to pay their bills or heat their homes in rich nations are not those who are responsible for this new, modern economic colonialism, they too are the victims.

We need to change course and do so fast. Tackling extreme inequality will require fundamental changes to the way we manage our economies, and we can embrace several approaches to achieve this. It is in all our interests to close the gap – both between the Global North and the Global South –and within countries too. It is the key to a peaceful, progressive and prosperous world, which is something we should all be working towards.

First, all governments must set global and national goals to radically reduce inequality. They must commit to aiming for the total income of the richest 10% to be no more than the total income of the poorest 40%.

Secondly, former colonial powers should acknowledge and formally apologize for the injustices committed under colonialism. Addressing the deep wounds of colonialism is essential for moving forward. Offering reparations to the victims can help ensure restitution, provide satisfaction, compensate for damages, enable rehabilitation, and drive trust building.

Third, governments should work to end outdated systems that create division and are no longer relevant to our current times. This includes working with global institutions such as the IMF, World Bank, and the UN to reform their governance models to ensure equitable representation globally and reduce the dominance of interests of the wealthy elites and corporations. We need new systems that promote economic sovereignty for all governments and fair wages and labour practices for all workers. Unequal free trade policies and deals must be repealed. Global tax policy should fall under a new UN Tax Convention and facilitate the payment of higher taxes by the richest people and corporations.

Fourth, Global South governments should form alliances and regional agreements that prioritize equitable, mutually beneficial exchanges and promoting economic independence and reducing reliance on former colonial powers or Global North economies

Finally, all existing colonialism must end, and people in the remaining non-self-governing territories must be supported to realize their right to equal rights and self-determination.

Time is ripe to change the path of history and write a new, more equal story that promises a better world where everyone has the opportunity to thrive. This is to the benefit of all of us. Our focus must not waiver as we march towards ensuring all people can live free, equal and with dignity.