Imperialism on the markets

Where is the world going? Bert Overbeek will publish extensive articles on this subject on jongebazen.nl starting February 1. He will develop a helping attitude in the process. The previous installments dealt with the risks surrounding our Internet data, privacy data and the pharmaceutical companies. Now it is the turn of the monopolists; those responsible for world poverty. 

What's against a community feeling ashamed or guilty if it includes people who are poor? And what is against a community that ensures that people have work, which could also be done by technology, but which is nevertheless done by people? So: that technology could replace people, but you don't choose that? That you choose, on the contrary, to replace technology with people so that everyone has a job?

What is against a society without shares and without profit maximization? Where work and production are not necessarily related to making a profit, but to working together to produce things that benefit humans, animals and the planet? I can already hear you saying it (if you haven't already declared me a fool): in itself there is nothing against it, but it is not real, it is not going to happen. Our world is not like that. Man is not built for that. Well, let's see what man is built on, according to people who like to be realists. We will do so again using authors Raeste and Sokkola (R&S), as in the previous articles.

1% of people own half the world's capital

It is useful to know up front then that financial inequality in our world has reached shocking proportions. Around 1989, when the Berlin Wall fell, everyone was convinced that socialism was "bankrupt. The free market principle had won! Liberals cheered. But in the meantime we have seen that even the free market principle can lead to misery. Huge differences between rich and poor Look for example at what the 10 richest people on earth will earn in 2023 according to financer.com

Elon Musk(Tesla, Space X) $195 billion
Jeff Bezos(Amazon) $185 billion
Bill Gates(Microsoft) $134 billion
Bernard Arnault(Louis Vutton Moet Hennesey, LVMH) $116 billion
Mark Zuckerberg(Facebook) $102 billion
Zhong Shanshan (Bejing Wantai Biological Pharmacy, Nongfu Spring) $93 billion
Warren Buffet (Berkshire Hathaway, investor) $88 billion
Larry Page (Google, Alphabet Inc.) $83 billion
Sergey Brin (Google co-founder) $81 billion
Larry Ellison (Oracle) $80 billion
In total, these 10 men (because there is no woman among them) own $1157 billion. They are among the 1% in the world who have half the capital. The amounts earned are so large that we cannot even imagine them. Suppose you are doing nicely in the Netherlands and you earn about $6,000 a month. 1000 monthly salaries, which is more than 19 years of salary, puts the tally at 6 million. But to get to 6 billion, so you have to count 1000 x 1000 monthly salaries, or put 1000 people together all earning 6000 euros a month for 19 years. And that puts you at less than a tenth of the amount that the number 10 on this list scrapes together.

One World writes in a somewhat older article:

"The richest man on earth, Amazon boss Jeff Bezos, owns an estimated $111 billion. A bizarre amount of money that he won't run out of in his lifetime. Even if he turned 90 (he's 55 now) and didn't make a penny more, Bezos would have to spend more than $8.5 million every day to chase through his entire fortune. Other option: he could donate $6,000 to all 18.5 million residents of Malawi, one of the poorest countries in the world. A huge bag of money for a country where the average annual income is $367.'

Meanwhile, the boss of Amazon thus owns not $111 billion but $185 billion! In doing so, he is doing a disservice to society. Of course, almost all those super-rich do have a charity to which they contribute. They all do, but usually there is a certain interest behind it. If they were really so concerned with helping their fellow man, they would give away much more. Musk engages in pointless space projects while about 811 million people were starving by 2020; that's about 10%. Half of his $195 billion could benefit a lot of people.

22 rich could take poverty out of the world

In October 2020, Welingelichte circles informed on its website, that it would cost $330 billion to eliminate all hunger from the world within 10 years. That was about 281 billion at the time.(https://www.welingelichtekringen.nl/economie/2180385/het-kost-maar-281-miljard-euro-om-honger-in-de-wereld-op-te-lossen.html#:~:text=The%20hunger%20in%20the%20world,the%20world%20out%20to%20help%20the%20world). If the 22 rich, who together own more money than àll the women in Africa, would put their heads together for a moment, poverty would disappear from the world just like that. But spaceships seem more important. If you develop spaceships with money that could feed thousands of hungry people, at least you show that you are not particularly concerned.

Greed is the root of all evil, and financial inequality, ladies and gentlemen, is the root of very much misery. Hunger, among other things. Disease and its spread. And let's not forget crime. People who have nothing are naturally more willing to steal something than people who are well off. So yes, if one earns a lot and the other earns nothing, crime is right around the corner.

With all this in mind, let us now look at how our world is structured and perpetuates inequality. Starting with the phenomenon of stocks. You often see that some of the shares are owned by outside shareholders and a few hot shots in the organization. Charles Handy once advocated reserving shares for your employees, but that actually happens only incidentally. What could be more motivating for employees than to work in a company they co-own?

Shares make the rich richer and poor stay poor

Most of the time it's different. Shares, according to businessinsider.co.uk, make the rich get richer and the poor stay poor. According to an article on this Internet medium, the poor of this world have only 2% of the total wealth, where the richest 10% hold as much as 76% of the capital. This distribution of capital cannot be separated from the stock market, because stocks are the way for the rich to increase their capital.

The math is quick. Anyone who buys 100 euros worth of shares receives exactly 6 euros for a 6% growth. If you buy 10 000 euros worth of shares, you grab 600 euros. If you buy for 1 million, you get 60 000. So the rich grab much more profit on shares.

https://www.businessinsider.nl/world-inequality-report-2022-rijk-vermogen/

I have never objected to the principle that you can earn a little more if you work hard for it. As long as you are entrepreneurial and good to the planet, to your fellow man, to animals and, of course, to yourself, a reasonable income difference is not immediately a problem. And you can argue about what is reasonable. But at the moment -also because of stocks- it's getting out of hand. Elon Musk, whom some are so fond of, has more income on his own than all the inhabitants of his native South Africa put together! And that's not "well done," it's "creating inequality," in other words, using your intelligence in a way that benefits a small portion of people.

'To be or not to be, that's the question' Shakespeare said, but 'to have or no to have' seems more applicable in our world. The pursuit of possession through shares is perfectly acceptable in our world, but it is unhealthy and leads to criminality. Jan Struijs, president of the Dutch Police Federation, said in 2022 that poverty is increasing in the Netherlands because of inflation and high energy prices and you see that reflected in crime. While there will always be crime that stems not from poverty but from ordinary greed (which in some cases we have come to call profit maximization), there is certainly a link between poverty and crime. CBS calculated that low-income people are about four times more likely to be suspected of crime than high-income people.

Anyone who wants to tackle crime will have to do something about the distribution of resources in this world. Stocks don't help with that. Not even because fossil fuel companies like Shell, Saudi Aramco and the Norwegian Oil Fund are increasing their capital via the stock markets. Not only them by the way, because Mc Kinsey and Warren Buffet's Berkshire Hathaway are also increasing their already enormous capital and that too leads to further wealth for the rich and poverty for the poor.

Monopolies and their destructive effects

Should we exchange the free market principle for something? Or reverse the system so that the rich allow the poor to share in their capital anyway. 'Fairly earned' is nonsense, because there are a lot of poor people who work much harder than the rich. If merit were based on work, capital distributions would be totally different.

I repeat again: it is not good for markets if one company starts to dominate the market. However, you see it in countless places in business. Those organizations are going to set and drive up prices (Apple) and they are going to pay their people poorly and monitor them via cameras. They can become so decisive that competitors can only access markets through them, at a cost, of course. They become too important to a country's economy, so politics cannot drop them when there are abuses there in all areas.

Monopolies are everywhere. For example, four (dangerous, according to R&S) companies control just about the entire grain market.   These are Archer Daniel Midlands, Dreyfuss, Bunge and Cargill. Apple, Amazon, Google and Microsoft control their markets, as do LVMH, better known as the French concern of multimillionaire Bernard Arnault, which owns a host of well-known brands in perfumes, alcoholic beverages including wine and champagne and fashion. Think Louis Vutton, Celine, Christian Dior, Kenzo, Fendi, Givenchy and many others, which Wikipedia lists for you. It says there:

'Louis Vuitton Moët Hennessy or Moët Hennessy Louis Vuitton (internally) (LVMH) is the world's largest conglomerate of luxury products. The French company is based in Paris and listed on Euronext Paris, where it is part of the CAC 40 index. The Arnault family is the main shareholder in the company. The group employed more than 175,000 people worldwide in 2021 and had 5556 stores.'

Crushing competitors; spying on employees and underpaying them

Monopoly positions are actually pursued by these organizations, including by buying up all kinds of small ones in the market, eliminating competition and giving autocrats their chance. Not only the aforementioned companies strive for this, but also, for example, Disney. It doesn't always happen openly, of course. Companies disguise it, for example, by presenting different brands.

Why do companies do this? That's a good question. Apparently it is not done to openly confess that you want your competitors gone. Some of this will be due to competition law, regulations that seek to prevent a company from controlling the market too much. But reputation management will also come into play. Monopoly positions create capital concentration, or in other words, the capital to be distributed ends up with a small group of people. And whoever has capital has power. The companies mentioned in this context in R&S's book are LVMH, Walmart, Disney, Apple, Koch, Microsoft, Blackrock, Vanguard, several large banks such as Goldman Sachs. But we can name more, because frankly, I don't believe there are many companies in these times that wish competitors a nice existence.

Another disadvantage of monopoly positions is the erosion of employee tenure. In our time, we already see plenty of this happening. I list what comes to mind in R&S's book. For example, there is replacement of long-term employment with temporary employment; salaries for the less educated have dropped significantly over time; there is more underpayment; fringe benefits have deteriorated; organizations are treating employees and suppliers carelessly; they are "downsizing" jobs; there is a lot of poorly paid flex work; and organizations are monitoring their own staff with cameras to see if they are not loafing too much. Organizations mentioned in this context include Ikea, LVMH, Glencore, Cargill, JBS, Walmart, McKinsey, Chinese I phone manufacturer Foxconn, Apple and Amazon.

Cheap labor, algorithms and child labor; what cost consciousness can lead to

Then there is child labor, which we usually find in the suppliers of large organizations. According to Unicef, 160 million children are currently working. This robs them of their right to education. Examples abound. Cargill uses child labor through cocoa farming, according to several sources. They are not the only ones. In 2014, child labor under deplorable conditions was reported in India's carpet trade. Companies buying products there included Walmart, IKEA, Macy's, Sears, Bloomingdale's and JC Penny. In the garment industry, H&M, C&A, Esprit, Marks & Spencer, GAP, VF Corporation and Kmart Australia have been linked to child labor in Bangla Desh.(https://stopkinderarbeid.nl/kledingmerken-dragen-bij-aan-lage-lonen-lange-werktijden-kinderarbeid-en-schooluitval-in-bangladesh/)

Several organizations have subsequently become more aware of child labor, including Ikea, but it is extremely difficult to verify that they nonetheless purchase products there because many suppliers are not transparent. What is known is that the vast majority of children work in the agricultural industry.

Many large companies love cheap labor, preferring to replace it with algorithms and robots. All of this is fueled by cost cutting, which is also responsible for moving offices and business premises to countries where the tax burden is minimal. For obscure reasons, that cost consciousness disappears like snow in the sun as soon as it comes to the sometimes exorbitant bonuses of top men and women.

What matters to me is this question: what does this benefit us, people? What does it mean for you, for me, for others, for nature, for the planet? More joy in life or more anger and crime, to name two extremes?

We are not sufficiently seen by organizations as people who can do something for each other. They see us as a walking ATM card or a cheap production screw in their capital-sucking machine. And because of their powerful position in the market, governments stand by without being able or willing to do anything.

Things have to change and if they can't, we have to make sure they can.

Monopolists sometimes unite and together try to bring markets under their spell. And then the mechanisms described above become even more powerful. Think of Facebook, Uber, Mastercard, Visa, Pay Pal and Spotify.

A small group profits from this and has so much capital that it no longer knows which warehouses to store it in. Others sap for a pittance. And this is not conspiracy thinking, but economic reality! It has always puzzled me why conspiracy thinkers hardly sigal this, and with often unproven theses are so focused on politics.

Yes, there is something going on that, if we let it continue, would color the future very bleakly. But why should we accept that? That we once, centuries ago, turned away in a direction that was destructive to the majority of the world's population and, moreover, to the earth and its natural systems, does not mean that we cannot turn away again. And then in the right direction.

We are not instruments of profit maximization, not walking ATM cards, not cost-saving tools. We are human beings, destined to build something beautiful together. Call it idealism, but I prefer that to accepting a reality that makes a lot of people unhappy.

Bert Overbeek has been a trainer, team coach and executive coach for 30 years. He has worked at home and abroad for more than 100 0rganizations. He wrote seven management books, four of which ended up in the top 5 of Managementboek. Overbeek wants to work towards a healthy future for companies; in all areas. And that includes integrity and healthy criticism. (Bert_overbeek@hotmail.com)