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The crux of it all
A Q&A with Chuck Collins, author of The Wealth Hoarders
The conversation around economic inequality is often a hard sell. It’s perceived as academic, dull and policy wonkish. And yet if I were to pick one single issue that was at the heart of most stories I’ve covered in recent years, it would be this. As the work of social epidemiologist Richard Wilkinson demonstrates, economic inequality impacts the key measures of the health of a society, from homicides and imprisonment, to obesity, mental illness, and social trust.
So, I’m pleased to dig into this topic today, and bring you my chat with Chuck Collins. He’s co-editor of Inequality.org and the author of a fascinating new book, The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions. Here, he pulls back the curtain on the “wealth defence industry,” shares research on Canada that’s due out next week from Oxfam International, the Institute for Policy Studies, the Fight Inequality Alliance and the Patriotic Millionaires — and explains why this issue is something that we should all care about.
How big a problem is wealth inequality in the United States right now?
The concentration of wealth and power is the centre stage of what’s broken, in terms of the impact it’s having on democracy, the economy, and civic life, and well-being. Whereas the wage floor has bumped up a little bit, thanks to a variety of economic forces, the concentration of wealth is at an all-time pinnacle. There’s been nothing like this since the first Gilded Age a century ago…In the United States, there’s roughly 745 billionaires. Their total wealth is about 5 trillion dollars. Most of that gain has been during the pandemic: 2.1 trillion dollars. The wealth has surged during the pandemic to the top.
What can you tell us about the Canadian context?
It’s similar in Canada. There’s 59 billionaires, with a total wealth of about US 240 billion. Ninety-seven billion of that is since March 2020. So, actually, the increase to Canadian billionaires is even higher than American billionaires. It’s like a 68 percent increase during the pandemic. Those are troubling indicators. Since 2016, the number of households with 50 million or more in Canada went from 5,265 to 7,745. A 40 percent increase in wealth, so the total wealth of those households went from 969 billion to 1.3 trillion, adjusted for inflation.
What demographics are affected most by this huge gap in wealth?
I would say it’s probably the bottom 40 percent of households. Now, this would be more true in the U.S. because we have a less meaningful social safety net. … [But] the pandemic in both countries has supercharged existing inequalities. If you were economically vulnerable going into the pandemic, you are probably more vulnerable. But it does affect everybody because the quality of life for even people in the middle is more precarious when there are these extremes. For instance, let’s take affordable housing. In Toronto, you have the wealth of the superrich bidding up the cost of land and housing. You have global capital parking money in Canada and the U.S. because we have stable, regulated real-estate markets — not for housing to live in but as a wealth storage unit. So that fuels an already severe housing crisis.
Your book explores the “wealth defence industry.” Walk us through what that is.
One of the things that the Pandora Papers and research prior showed is that there’s this whole hidden wealth system. We’re sitting here talking about the money we know about. But there’s a growing sense that some eight to 10 percent of the world’s wealth, held by the superrich, is not even in the ledger. It’s being hidden in trusts, and offshore, and in anonymous shell companies. That wouldn’t be possible without an enabler class: tax attorneys, wealth managers, family-offices employees. There’s a group of people who get up every morning to help their clients to accumulate more wealth and, equally of concern, create dynastic wealth. That’s their core function, and it causes tremendous harms to the rest of society.
What are the costs of hidden wealth?
One is tax shifting. If the superwealthy are not paying their fair share of taxes, then they’re shifting the bill to the rest of us to pay for public services — or creating conditions for a phony austerity. Another is that this is the mechanism by which the wealth of non-rich countries is plundered and moved out of their home countries … But this is often too narrowly a discussion about lost revenue. When you play this out into the future, we’re looking at families with huge amounts of wealth that they use to influence political systems, acquire media, shape the culture, lobby for law changes or, more often, particularly in the U.S., block meaningful change. So, it threatens democracy.
You grew up in a suburb of Detroit, one of many heirs to the Oscar Mayer fortune. The Detroit riots of 1967 influenced you deeply. How did that unrest shape your thinking?
I think it was a wake-up for me to understand that not all is well in the world, that the gap between city and suburb, white and Black, rich and poor — that inequality was at the centre of what was broken. I grew up in a privileged bubble, but that broke into the bubble. I became really interested in what was happening in Detroit.
Your focus is taxes in general, and a wealth tax in particular. How did you arrive at that, as opposed to wages or executive compensation?
It was more about what wasn’t being talked about. At Inequality.org, we do an annual research report looking at CEO pay and average worker pay. So, we’re very concerned with that. My interest in wealth is that I think that’s where the multigenerational deeper inequalities get put in place. If you are interested in understanding the racial wealth divide, you can see some of that through looking at income. But if you look at wealth and assets, that’s where you understand the multigenerational story and the legacy of discrimination. Wealth tells a different story and in some ways it is the story of power. What tools are there [to address it]? If you don’t have broad worker ownership or a real stakeholder society where others share, then you do have to redistribute. You have to tax wealth at the top, not just to generate revenue but to put a brake on these concentrations of wealth and power.
The wealth inequality conversation is a hard sell. It can be perceived as academic and abstract by both the public and the press. How do you get people engaged?
In some ways it’s a stuck conversation because people line up politically. … Some people see it as a threat to free-market capitalism. And this is one way I’ve tried to bring my own upbringing in. I say, “Look, this system is bad for everybody, including the wealthy.” It undermines the stability in our societies, it fuels polarization. It doesn’t help healthy capitalism to have great monopolies of power and wealth that distort the functioning of an economy. It doesn’t help commerce, small businesses. … These inequalities really undermine everything we care about. It’s keeping us from responding in a nimble and appropriate way to the threats around us, whether it’s a pandemic or global climate disruption. Inequality is bad for democracy, bad for the economy, bad for civic life, and bad for your health.
This interview has been edited and condensed.