The Fanonite

Sixty men today own more than the collective worth of half of the world’s population, James Petras reveals in his study of the global ruling class and the means through which they accumulated their wealth. The number of billionaires has grown from from 793 in 2006 to 946 this year with more than half of the current billionaires come from just three countries: the US (415), Germany (55) and Russia (53). India and China lead Asia with 36 and 20 billionaries respectively. Brazil and Mexico lead Latin America, with 20 and 10 Billionaires respectively.

The total wealth of this global ruling class grew 35% year to year topping $3.5 trillion USD, while income levels for the lower 55% of the world’s six-billion-strong population declined or stagnated. The 35% increase in wealth mostly came from speculation on equity markets, real estate and commodity trading, rather than from technical innovations, investments in job-creating industries or social services.

While India’s 36 billionaires collectively own $191 billion, its rural poor continue to suffer in privation, the clearest manifestation of which is the high rate of farmer suicides. Growing resentment among the masses is a natural corrollary to such concentration of wealth, and according to Petras, “Prime Minister Singh declared that the greatest single threat to ‘India’s security’ were the Maoist led guerrilla armies and mass movements in the poorest parts of the country.” Similarly in China, the ruling elite ”confronting nearly a hundred thousand reported riots and protests, have increased the number of armed special anti-riot militia a hundred fold, and increased spending for the rural poor by $10 billion USD in the hopes of lessening the monstrous class inequalities and heading off a mass upheaval.”

Meanwhile, 870 million people go to to bed hungry every night.

So how did all this money end up in the hands of these oligarchs?

Among the newest, youngest and fastest-growing group of billionaires, the Russian oligarchy stands out for its most rapacious beginnings.  Over two-thirds (67%) of the current Russian billionaire oligarchs began their concentration of wealth in their mid to early twenties. During the infamous decade of the 1990’s under the quasi-dictatorial rule of Boris Yeltsin and his US-directed economic advisers, Anatoly Chubais and Yegor Gaidar the entire Russian economy was put up for sale for a ‘political price’, which was far below its real value…

This ‘Shock Treatment’ was encouraged by a Harvard team of economic advisers [led by Bono's buddy, Jeffrey Sachs and Noreena Hertz,, both of whom featured prominently in the "Make Povery History campaign] and especially by US President Clinton in order to make the capitalist transformation irreversible. Massive privatization led to the capitalist gang wars and the disarticulation of the Russian economy.  As a result there was an 80% decline in living standards, a massive devaluation of the Ruble and the sell-off of invaluable oil, gas and other strategic resources at bargain prices to the rising class of predator billionaires and US-European oil and gas multinational corporations…

Yet as President Putin recently pointed out, the new billionaires have failed to invest, innovate and create competitive enterprises, despite optimal conditions…The reason is that the oligarchs have ‘diversified’ into stock speculation (Suleiman Kerimov $14.4 billion USD), prostitution (Mikhail Prokhorov $13.5 billion USD), banking (Fridman $12.6 billion USD) and buyouts of mines and mineral processing plants…

Behind every great fortune is a great crime

In the mid 19^th century, Honoré Balzac, surveying the rise of the respectable bourgeois in France, pointed out their dubious origins: “Behind every great fortune is a great crime…”

If blood and guns were the instruments for the rise of the Russian billionaire oligarchs, in other regions the Market, or better still, the US-IMF-World Bank orchestrated Washington Consensus was the driving force behind the rise of the Latin American billionaires. The two countries with the greatest concentration of wealth and the greatest number of billionaires in Latin America are Mexico and Brazil (77%), which are the two countries, which privatized the most lucrative, efficient and largest public monopolies.  Of the total $157.2 billion USD owned by the 38 Latin American billionaires, 30 are Brazilians or Mexicans with $120.3 billion USD.  The wealth of 38 families and individuals exceeds that of 250 million Latin Americans; 0.000001% of the population exceeds that of the lowest 50%.  In Mexico, the income of 0.000001% of the population exceeds the combined income of 40 million Mexicans. The rise of Latin American billionaires coincides with the real fall in minimum wages, public expenditures in social services, labor legislation and a rise in state repression, weakening labor and peasant organization and collective bargaining. The implementation of regressive taxes burdening the workers and peasants and tax exemptions and subsidies for the agro-mineral exporters contributed to the making of the billionaires…

The principal cause of poverty in Latin American is the very conditions that facilitate the growth of billionaires…

Half of Mexican billionaires inherited their original multi-million dollar fortunes on their way up to the top.  The other half benefited from political ties and the subsequent big payola from buying public enterprises cheap and then selling them off to US multi-nationals at great profit. The great bulk of the 12 million Mexican immigrants who crossed the border into the US have fled from the onerous conditions, which allowed Mexico’s traditional and nouveaux riche millionaires to join the global billionaires’ club.

Brazil has the largest number of billionaires (20) of any country in Latin America with a net worth of $46.2 billion USD, which is greater than the new worth of 80 million urban and rural impoverished Brazilians.  Approximately 40% of Brazilian billionaires started with great fortunes — and simply added on — through acquisitions and mergers.  The so-called ‘self-made’ billionaires benefited from the privatization of the lucrative financial sector (the Safra family with $8.9 billion USD) and the iron and steel complexes…

In both Latin America and Russia, the billionaires grabbed lucrative state assets under the aegis of orthodox neo-liberal regimes (Salinas-Zedillo regimes in Mexico, Collor-Cardoso in Brazil, Yeltsin in Russia) and consolidated and expanded under the rule of supposedly ‘reformist’ regimes (Putin in Russia, Lula in Brazil and Fox in Mexico).  In the rest of Latin America (Chile, Colombia and Argentina) the making of the billionaires resulted from the bloody military coups and regimes, which destroyed the socio-political movements and started the privatization process…

In both Latin America and Russia, the billionaires grabbed lucrative state assets under the aegis of orthodox neo-liberal regimes (Salinas-Zedillo regimes in Mexico, Collor-Cardoso in Brazil, Yeltsin in Russia) and consolidated and expanded under the rule of supposedly ‘reformist’ regimes (Putin in Russia, Lula in Brazil and Fox in Mexico).  In the rest of Latin America (Chile, Colombia and Argentina) the making of the billionaires resulted from the bloody military coups and regimes, which destroyed the socio-political movements and started the privatization process…

The Chavez Insurgency

The billionaires’ and the White House’s anger and hostility toward President Hugo Chavez of Venezuela is precisely because he is reversing the policies which create billionaires and mass poverty: He is re-nationalizing energy resources, public utilities and expropriating some large landed estates.  Chavez is not only challenging US hegemony in Latin America but also the entire PDD edifice that built the economic empires of the billionaires in Latin America, Russia, China and elsewhere.