August 29, 2023
I discovered an interesting article today in the National Post. It’s by billionaire Frank Stronach, founder of Magna International (NYSE:MGA $16.3 Billion market cap).
“Frank Stronach: Ensuring the modern-day ‘kings’ don’t hoard all the gold
The extreme concentration of wealth in the hands of a few inevitably leads to economic domination. We need to break those chains of domination.”
The 2022 World Inequality Report starkly exposes the urgent need to address the dangerous concentration of global wealth. With the top 10% of the world’s richest owning 76% of total wealth and the bottom 50% holding only 2%, immediate action is essential to prevent further consolidation of power and inequality.
This issue isn’t confined to developing nations; Americans and Canadians also struggle with grossly widening income disparities. Notably, Canada’s richest 1% earned 15 times more than the average citizen by 2010, up from nine times in 1980. Oxfam Canada’s recent report highlights that for every $100 generated in the last decade, the top 1% amassed $34, while the bottom 50% received just $5.
Numerous factors contribute to this inequality, chiefly favoring the rich and powerful due to lopsided rules. Government policies often prioritize the financial sector’s interests, leaving the working class vulnerable. This absence of economic democracy necessitates a fresh approach, such as Frank Stronach’s proposal.
The concept of an “economic charter of rights” suggests enhancing existing rights charters with economic provisions to counteract wealth inequality. A practical example is requiring companies with over 300 employees to share 20% of annual profits with their workforce, promoting a fairer wealth distribution.
At its core, an economic charter recognizes the right of wealth creators to a fair share. While political rights are enshrined in charters, economic disparities persist, hindering marginalized groups from escaping poverty. Stronach’s proposal aims to shift our thinking about wealth generation and distribution, hopefully creating transformative change.
The negative impact of wealth concentration extends beyond economics. Stronach suggests a nonviolent “mind revolution” rather than a violent upheaval. By extending wealth benefits to more than a privileged few, economic charters could anchor economic democracy, which is fundamental to the health of political democracy.
To sum up, this is a subject the financial sector must consider. The alarming statistics from the 2022 World Inequality Report emphasize the pressing need to address wealth inequality on a global scale. To counteract this trend and foster economic democracy, the concept of economic charters of rights could pave the way for a more just and inclusive society. It’s time, say many billionaires, to embark on a transformative journey toward social equity, the notion I have promoted for twenty years.