We created the one per cent - Keith Roulston editorial
The other day, a friend and I were agreeing that the fact that a tiny group of the very rich control so much of the wealth was a big problem – we only disagreed how this problem was created in the first place.
First of all, some facts. According to the Brookings Institute, the top one per cent of the richest people in the U.S. controls $25 trillion – more than the bottom 80 per cent of the population. By comparison, Canada has a lower percentage of people with wealth below $10,000 and a higher percentage with more than $100,000. Still, in Canada, according to the Canadian Centre for Policy Alternatives, 90 families own more than the combined population of Newfoundland and Labrador, New Brunswick and Prince Edward Island.
Of course, we should admit that many of us who don’t think of ourselves as wealthy, are richer than we think on world-wide terms. According to Credit Suisse’s calculations, 1.59 million Canadians are part of the world’s top one per cent of wealth holders.
My friend, with some validity, argued that the very rich rigged the rules to get to where they are and to stay there. I argued that we ordinary people made these people as wealthy as they are. In many cases, from the Walton family behind Walmart (estimated family worth of $130.5 billion), to Jeff Bezos, founder of Amazon and worth an estimated $130.1 billion, ordinary people voted with their dollars to make these people rich. Often, other businesses were destroyed when people flocked to the new guy on the block, abandoning the people and businesses that had served them for years.
An article in the current issue of Walrus entitled “The End of Grocery Shopping” demonstrates the long-running concentration of wealth. Early in the 20th century, a shopper would go out to the grocery store for canned and dry goods, then to the butcher for meat, the bakery for bread and the greengrocer for fruits and vegetables. But creative entrepreneurs were already rethinking things. As far back as 1883 in Cincinnati, Bernard Kroger began experimenting by offering baked goods in his grocery store. Shoppers liked the convenience and by 1902 Kroger expanded to 40 stores and started his own bakery so he could sell bread at cost, undercutting competition. That’s at least 40 grocery store owners who were put out of business, not to mention bakers and butchers, with the wealth concentrated in one family’s hands.
In the beginning, a shopper handed her list to the grocer and he filled her order from goods kept in a back room. But someone had the idea of putting the stock on shelves in the store and letting shoppers choose for themselves. This not only speeded the process for the shopper but cut labour costs. When the first Loblaws Groceterias opened In 1919 they used this strategy. Shoppers rewarded these companies and so things got bigger. Each change was greeted with enthusiasm by shoppers. The same human instinct that made entrepreneurs want to make money drove consumers to try to save money.
When I was growing up, even into the 1970s when I first began working, the main streets of local towns and villages were lined with stores offering everything we needed for our homes. The business owners paid taxes and were community leaders. They grumbled about their main threat, people who shopped for clothes, shoes and even furniture from the Eaton’s and Simpson-Sears catalogues. Today, the main street stores and merchants are gone. Even Eaton’s, Simpsons and Sears are no more. The coming of Walmart and other international chain stores has shifted profits from people within the community to foreign bank accounts.
Canadian companies like Loblaws and Sobeys fear Walmart, which has added groceries to its one-stop variety. Yet Walmart fears Amazon which is revolutionizing retailing. People like you and I are rushing to buy online, with even online grocery shopping growing rapidly. As Amazon tries to dominate grocery shopping as well, shoppers are concentrating wealth in the hands of Bezos.
Certainly, the ultra-rich want to pay less tax – just like the rest of us who elect tax-slashing governments. Certainly they have the clout to get favourable tax laws, etc. Progressives from people like my friend to U.S. Presidential candidate Bernie Sanders to the NDP argue these companies must be taxed more heavily to redistribute wealth and help the downtrodden. The difficulty is we’re creating new online giants like Amazon, Facebook, Google and Netflix that don’t need to locate within the borders of a country, so they can shift their headquarters to a friendly taxhaven to avoid taxes.
We don’t think of the ramifications of our buying choices. We simply want the cheapest, the most variety, the most exciting goods. In getting what we want, we’ve created the super-wealthy one per cent.