Billionaires are making a killing during cost of living crisis – we can’t afford to accept this

The past year has been dubbed “amazing” for the rich – and meanwhile we have an ongoing cost of living crisis that’s been squeezing households across the country, and the world. For the first time in a quarter of a century, global poverty and extreme wealth have been rising simultaneously – this is not mere coincidence, but interrelated. 

The reality is, the very factors that have made most people poorer are the same that have made the rich, richer. Fossil fuel corporations make billions as bills rise; as food prices go up, new food billionaires have been created. Global events, such as Russia’s invasion of Ukraine, and the Covid-19 pandemic, certainly contributed to initial price rises. However, a recentOxfam report shows that, “not only are companies passing increased input costs onto consumers, but they are also capitalising on the crisis, using it as a smokescreen to charge even higher prices.” 

In basic terms, this means higher prices for ordinary people – which are then translated into massive profits for shareholders. Food and energy giants paid $257bn to their shareholders in 2022 – that’s 84% of their windfall profits flowing directly to shareholders. When you understand the role of ‘greedflation’ in driving the cost of living crisis, it’s no surprise we’ve seen 141 new billionaires created in 2023 – the greatest number ever. Essentially, the rich are getting richer – at the collective expense of ordinary people across the world. 

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And this isn’t the case of small businesses doing what it takes to survive. The largest companies – like Amazon, Google and Apple – mark up their prices the most. The top 20, many of which are owned or controlled by the top 20 billionaires, mark up their prices by an average of 50%, double the average for smaller companies, and this has been rising steeply in recent years. 

This is only possible due to monopoly power. In almost all sectors of the global economy, just a few large companies dominate with extraordinarily large market shares. For example, just four companies control an estimated 70-90% of the world grain market. This lack of competition means companies can set prices as high as they like, while at the same time squeezing their suppliers; they enjoy sky-high profits, and the rest of us have literally no other choice. 

In other words, their monopoly power facilitates a transfer of wealth from the poorest to the richest, deepening inequality. Since many of the resources and labour are based in the global south, monopoly power facilitates neocolonial extraction of wealth from the poorest communities in the global south, to the richest companies, usually based in the global north. 

Many of these corporations have near total control over the whole supply chain – from production and processing all the way through to sales. This allows them to maximise their profits further and squeeze out smaller businesses, further entrenching their power.  

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At the same time, big corporations are cutting corners wherever possible to save money and increase profits. Workers are facing increasingly unfair conditions and low wages, at the same time as their power to fight for better is reduced. Meanwhile, monopolies are driving some of the most destructive production and consumption patterns, such as heavy use of toxic chemicals in agriculture and planned obsolescence in tech. 

We can’t afford to accept this injustice. And we don’t have to. But what can be done? It’s clear in the immediate term that we need a wealth tax, with money to be reinvested into communities, public services and reparative justice for the global south which would go some way towards a fairer national and global distribution of wealth and resources. 

But our response to this crisis needs to go deeper than that – we need measures to limit such extreme inequality from arising in the first place. There is no one ‘silver bullet’ here – what is needed is a combination of measures, from increased corporate regulation to rewriting the rules in our trade deals, measures to tackle tax havens and a rebalancing of power from corporations to workers. 

What sits at the heart of all these proposals is a need to truly tackle corporate power in earnest.  

Movements like Make Amazon Payare linking up the joint struggles for workers’ rights, environmental protection, and corporate regulation (to make giants like Amazon pay their taxes). Their vital actions mobilise people from all round the world, from global south countries on the front lines of the climate crisis, to workers being exploited in Amazon’s warehouses in countries like the UK as well. Such coordinated campaigning and international solidarity is critical to ensure we fight these issues at their root. 

As we approach election season, the next government would do well to take seriously the rightful anger of ordinary people from the UK to the global south sick of the corporate power that’s leaving us all poorer.

Daisy Pearson is campaigns and activism officer at Global Justice Now.

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