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How business tycoons are controlling governments worldwide in the 21st century
AMIR HOSSAIN | Issue Dated: November 10, 2013, New Delhi
Tags : Business Tycoons | Renowned Economist Joseph Stiglitz | Government |

The world has raised its eyebrows since a long time regarding the rising trend of income inequality across the globe. A few years back, renowned economist Joseph Stiglitz stated that “the rich are getting much, much richer, while regular people (in the developed world, which is what we're talking about here) are at best treading water.” But the problem is not that a few elite people have gigantic amounts of money while millions are sleeping on empty stomachs every night. A very recent report on global wealth distribution by the investment bank Credit Suisse highlighted a very absurd trend that lopsided wealth increasingly goes along with uneven power.

The report highlights that Russia topped the list of nations with the greatest income disparity. As per the report, only 110 people encompass almost 35 per cent wealth of the entire nation. In the same light, 93.7 per cent Russians are worth less than $10,000. Thus, Russia perhaps exemplifies the extremest case in the world where democracy (or whatever semblance of it currently exists in Russia) faces a massive threat from the oligarchy (read: government of the few).

Long back in 1990s, some politically well-connected capitalists managed to book profits using their close relations with the Kremlin by taking advantage of the privatisation of jewel and oil industries. Subsequently, those businessmen funded Yeltsin’s Presidential re-election in 1996, short listed ministerial candidates and controlled government policy. In essence, those businessmen nee politicians became oligarchs. Business tycoons like Boris Berezovsky and Mikhail Khodorkovsky allegedly enjoyed privileges during the times of such oligarchy. When Putin came to power, he forcibly restricted the power of the Yeltsin-era tycoons by hook or crook. Astonishingly, on his path of abolishing the oligarchic system, he also helped raise a new group of businessmen. For instance, Igor Sechin, the President of the leading oil and gas company Rosneft, is considered as the second most powerful man after Putin himself.

But this is not the story of Russia only. Across the globe, a tiny elite group of people have been awarded incomparable wealth and power. And they are vexing voters from Beijing to New York. Across the globe, membership in the ruling party is often the easy road to wealth. Whether it is about the seven members (of the Standing Committee of the Politburo) of the Chinese Communist Party who enjoy immense powers, or it is about millionaire politicians in India, there is always a significantly high incidence of income inequalities creating oligarchies.

Another classic example is America. A Pew Research report published in December 2011 stated that “across the board, American people overwhelming think too much power in this country is concentrated in the hands of a few very rich people and very large corporations.” Almost 77 percent of Americans believed thus. The trends in the US are very similar to those in Russia. Joseph Stiglitz recently highlighted in an editorial that “the top 1 percent of Americans took home 22 percent of the nation's income; the top 0.1 percent, 11 percent.” Moreover, the legality of lobbying and campaign financing to an extent has paved the way for capitalists to gain immense influence over the political process. The case of the Koch Brothers – the second largest privately owned company in the US – is a case in point here. In the same light, business magnates like George Soros and Tom Steyer are said to be spending millions in attempting to influence policy. One recent academic study estimated that "40 percent of political campaign contributions in 2012 came from one hundredth of one percent of American households."

Thus the whole world is becoming a play ground of a few rich people who would like to dictate the government actions and shape policy in their favour. The civil society needs to wake up and recognize this fact!

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Issue Dated: Feb 5, 2017