Last month, French President Emmanuel Macron somberly announced at a cabinet meeting that the Ukraine war and climate change signalled the end of “an era of abundance”. Wait a moment, monsieur, when did the ‘era of abundance’ begin? Did we blink and miss it?
In reality, it only ever existed for the rich. A report by investment bank Credit Suisse revealed that the number of 'Ultra High Net Worth' (UHNW) individuals – with assets of more than $50m (£43.7m) – doubled in the last two years thanks to soaring house prices and booming stock markets. The net worth of Tesla and SpaceX CEO Elon Musk, for instance, has ballooned from $26bn in 2020 to over $200bn in 2022.
While the ultra-rich amass unprecedented levels of wealth, most people have had their lives turned upside down in the past period of capitalist crisis. For millions, the soaring cost of living today, right off the back of the COVID-19 pandemic, is a question of life or death.
As always, there is one reality for the wealthy elite, and another for the rest of us.
Hard times: for some
The real purpose behind Macron’s warning was to prepare the French masses for even harder times. Despite a 4 percent cap on fuel prices from July, energy shortages are expected to wreak havoc on French households. Enforced blackouts are also on the table this winter. Such, Macron explained, is the inevitable cost of Europe’s support for Ukraine in the NATO-led proxy war with Russia: “the price to pay for freedom.”
In truth, a parasitic minority are free to cash in, while workers pay the price. Dividends paid out by the biggest French companies reached a record €44bn in the second quarter of 2022, up 33 percent from last year, as a result of record profits in 2021, following a post-COVID bounceback.
Additionally, French brands like LVMH, L'Oréal, Kering and Hermès are at the forefront of a projected 3.7 percent year-on-year growth in the global luxury goods market over the next five years, from $349.1 billion in 2022 to $419 billion. While the rich splurge on French-made designer handbags, ordinary French workers struggle with the basics, with rising inflation gouging their income, and the unemployment rate creeping up to 7.4 percent. Macron’s government of the rich is totally out of touch, as ever.
The situation is summarised by Anne Lauseig, 50, a care assistant from Bordeaux:
“Some of us can barely afford the petrol to travel to work. Some go to food banks or sleep in their cars if they can’t afford rent. I wait until the fridge is empty before I buy a little food. I’m not sure the government is aware of the anger and injustice people feel.”
We see the same story unfolding all over the world. And not for the first time.
During the COVID-19 pandemic, the ruling class sang platitudes about how “we are all in it together”. In fact, workers and the poor endured the brunt of illness, precarity and death, while the rich sat safely in their air conditioned mansions. Capitalists in the pharmaceutical and technology sectors amassed fortunes, while workers subsided on state handouts during mandatory lockdowns. And we witnessed the surreal spectacle of tycoons like Elon Musk and Richard Branson racing one another to space in private rocket ships, while billions of people were trapped in their homes.
Today, the so-called cost-of-living crisis is depriving ordinary people of the necessities of life, while the rich are not only protected from the fallout, but in some cases are enriching themselves even further.
Billionaires and royals
Britain is undergoing a particularly severe crisis, with exorbitant energy costs and one of the highest overall levels of inflation in western Europe, at around 10 percent. But this burden is not shouldered evenly.
Poorer households spend a bigger proportion of their income on energy and food, the price of which is skyrocketing, and state benefits have decreased. It is straightforward for higher-earners to ‘drop down’ to cheaper alternatives, but the poor have little choice other than shutting off their central heating or resorting to food banks if the cost of essentials exceeds their means. All told, the inflation rate for the poorest 10th of households is 1.5 percentage points higher than the richest 10th – the widest gap recorded in 16 years.
Meanwhile, the number of British billionaires has gone up since 2021, and their combined wealth has ballooned by almost the same proportion as general inflation (9.4 percent) to £653bn.
And there’s even more good news for the super rich! Newly-minted Prime Minister Liz Truss stormed out of the gate with a ‘pro-business, anti-handouts’ agenda, intended to appeal to the most-reactionary section of the Tory Party support base, and delight her big-business benefactors. This includes the cancellation of planned increases to corporation tax, and scrapping the cap on bankers’ bonuses, introduced after the 2008 crash.
A planned cut to national insurance, billed as a bit of relief for the wider population, is expected to save a full-time worker on minimum wage £59 a year, while a person on £100,000 would save over £1,000. Truss described this discrepancy as “fair” – because the rich pay more tax (which is false).
This fair-minded policy will be of slim comfort to workers and the poor, who are enduring the worst general attack on living standards in 100 years. Real pay growth since 2003 has been wiped out, and the number of households in absolute poverty is expected to go up from 11 million to 14 million.
Make no mistake: people’s lives are already being destroyed. A report from a Citizens’ Advice Bureau (CAB) office in Bolton described panicked residents seeking guidance on how to cope with rising costs. “One day I eat, one day I don’t,” said one woman, who had been skipping meals to feed her 14-year-old son. Another, surviving on universal credit after her husband was forced out of work by a stroke, exclaimed while clutching overdue energy bills: “My child is upset when he sees my debt. He wants the same as his friends… everybody is struggling.”
Exasperated staff have little advice to offer. Gemma Walsh, the CAB housing manager, spoke of people entering her office surrounded by their belongings after being made homeless. “I’ve had to tell people that [the council] are not going to accommodate you – go find a tent. We say stop here until we shut because it’s warm but then they’re off.”
This will only get worse. The British working class face a very bleak Christmas indeed: with a record number of benefit claimants, food bank users, and cold homes.
Inequality is reaching monstrous levels. The Financial Timesrecently reported that the top earners in Britain are the fifth-richest in the world, comfortably part of the global elite. But the poorest rank at 15th, with a standard of living 20 percent worse than low-income households in Slovenia, a country with a GDP 50 times smaller than the UK’s.
Rather than providing solutions, the ruling class and right-wing leadership of the Labour Party have joined in a nauseating circus of ‘national mourning’ for the recently-deceased Queen Elizabeth II: a woman who lived in opulence for her entire life, at the public’s expense. One wonders how many elderly, working-class women will die in cold, damp flats this winter without all the choreographed hullabaloo?
The capitalist establishment and its prostitute press have spilled much ink on building up Queen Elizabeth as a ‘down-to-earth’ sovereign, beloved by the common folk. But life for the hoi polloi will grind to a halt during her funeral, to ensure we all pay the proper respects. Getting married? Tough luck! Need to bury your grandmother? Sorry! Have a hospital appointment? Too bad. Even some food banks have said they will close their doors while Her Majesty is laid to rest.
The cost of the Queen’s state funeral, estimated at £5-10m, will of course be borne by the public purse. Though it could easily be covered by the royal family’s $28bn fortune, and much more besides! The newly-crowned King Charles III has been granted a zero percent tax rate on his £500m inheritance, saving him £200m that also could have covered the cost of his mother’s funeral: as well as opening a few schools and hospitals. Despite this inherited fortune, one of His Majesty’s first acts was to serve 100 of his personal staff with redundancy notices.
These stinking double standards, and contemptuous displays of privilege, have an effect. This can be seen, anecdotally, in a flurry of fury on social media, which stands in stark contrast to the mood of ‘national unity’ cultivated by the mainstream press, and the miles-long queue to witness the Queen’s coffin.
One twitter user captured a rising mood among a section of the public: “In the middle of a cost of living crisis they are spending millions of our money on the Queen's funeral, when her son will inherit millions and not pay any inheritance tax. It’s disgusting.”
Across the Atlantic, US President Joe Biden is celebrating his ‘inflation-busting’ spending package, intended to take the pressure off working-class Americans. But so far these measures are failing: US inflation is exceeding predictions, at 8.3 percent, which is taking a hefty bite out of people’s wages.
While the ruling class complain that raising wages to compensate creates a ‘wage-price spiral’ that will exacerbate inflation, corporate profits in the US rose 9.1 percent in the second quarter of 2022 to a record high of $2.6tn. What we see in reality is a ‘profits-poverty’ spiral, in which a tiny minority enjoy vast riches, and millions of families face increasingly intolerable conditions in the richest country on earth; to the point that 1 in 6 American children now suffer from malnourishment.
The US government recently rubber stamped another tranche of $2.2 billion to perpetuate its proxy war with Russia in Ukraine. Meanwhile, hundreds of thousands of (disproportionately working-class and black) people in Jackson, Mississippi are currently forced to queue for hours at water distribution centres, after a flood at a water treatment site left their tap water brown and undrinkable. Some residents do not even have the necessary water pressure to flush their toilets.
The line at one of the water distribution centers this morning in Jackson, MS... pic.twitter.com/HjNyXxqZEx— Louis D (@louisd217) September 6, 2022
Jackson is not the exception. Social media abounds with images of major cities like Detroit, Cleveland and Philadelphia literally rotting from poverty, crumbling infrastructure and homelessness. Yet the corporate profits continue rolling in, and the US ruling class always seems to find the money to fund its imperialist adventures abroad.
And if the situation is bad in the advanced capitalist countries, it is worse still in the poorer nations, which have been battered by the COVID-19 pandemic, fuel and food shortages, and the rising cost of dollarised debt. This is preparing a social catastrophe for billions. For instance, a 2022 food security report found the cost of a healthy diet in India, around $3USD a day, was unaffordable for over 70 percent of the population, or 973m people.
But the hungry masses can take some pride in the fact that, for the first time ever, an Indian man stands among the top-three richest people on earth! Gautam Adani jumped over luxury goods magnate Bernard Arnault, adding $60.9bn to his fortune this year, putting him behind only Jeff Bezos and Elon Musk at $137bn.
And what is the source of Adani’s wealth? His conglomerate, the Adani group, has been grabbing infrastructure, media and energy contracts in India, helped along by Prime Minister Narendra Modi’s reactionary privatisation policies. This has caused his stock to double in 2022. Adani is now looking at gobbling up swathes of India’s food production industry: a very savvy investment, given the aforementioned spike in food prices that is starving his countrymen!
Poverty at one pole, abundance at the other
Marx explained that capitalism causes an accumulation of immense riches at one pole, and of unbearable poverty at the other. The era of abundance never ended for the ruling class. But for the working-class, the perspective is one of increasing immiseration as the crisis of capitalism deepens.
There is plenty of wealth in society to resolve all the hardships that press down on the working class. But the bulk of it is in the clutches of private profiteers: who are increasingly arrogant, degenerate and out of touch. After having already made terrible sacrifices in the last few years, the masses are beginning to awaken to this fact.
There will be no abundance for the majority until this system is overthrown, and socialism built in its place. In the coming weeks, we will demonstrate that in all spheres of life – from energy, to housing, to hunger, to living standards – we are not all in it together. Rather, it is them and us.