The Making of a Pyramid – How the Super-Rich Make Profits Even During a Pandemic

How rich is France’s richest man, Bernard Arnault? If one earned €8,000 every single day since the French Revolution (1789), one would end up amassing 1% of his fortune. While society ought to have paused and mulled over that figure, most people chose to fall into the trap of declaring themselves as pro-capitalists. A natural consequence of this is that all over the world people have become immune to growing inequality. Arnault has the reputation of a discreet and cultured businessman, and his business cuts across an international mix of masses and classes. Be it Louis Vuitton or the Carrefour supermarket around the corner, Arnault has his hands in every other pocket, if not every pocket. Yet, he began to get nervous when President François Hollande came to power in 2012, and his brand of champagne socialism declared war on the super-rich. Arnault was amongst the first to panic and promptly applied for Belgian citizenship. But by 2014, Hollande had done a U-turn, and all of a sudden, it was advantageous to stay on in France, after all. However, in the scramble for a Belgian passport, Arnault had got himself into a tight spot with the Belgian authorities who opened an investigation into his holding company, Pilinvest. It became clear that Monsieur Arnault was looking for a possible tax dodge route just like any other billionaire. It is no secret that the super-rich of the world usually find a way to navigate their funds to offshore tax havens.

When Covid-19 hit France, the chivalrous Arnault came to the rescue and produced 12 tonnes of much-needed hand sanitising gel for 39 hospitals across Paris. While some people were grateful for his intervention, others could not help wondering why Bernard Arnault hadn’t just paid his taxes in France instead of dodging the authorities. The hospitals would have been better funded and equipped for the Covid calamity. The stylish bottles (with the Christian Dior brand) bore the LVMH mark. People could now die in style, well, at least in Paris. As for the homeless, they were left to fend for themselves in France; his LVMH group did not hand out gel in fancy flacons to the downtrodden.
Poorer countries like Portugal showed exemplary courage in taking care of even its illegal immigrants, and Spain went ahead and passed laws to ensure universal income to all its citizens – a move that is scoffed at by many. Our notion of rich or poor countries is framed by GDP and finances, but with Covid-19, we have an opportunity to rewrite the rules of economy. For those who want to go back to business as usual, it is time they realised that the constructed norm was part of the problem. In the ’50s, Japan and Germany taxed their super-rich and those funds helped their nations get back on their feet after WWII. There are those who believe that goodwill and charity will magically do the needful. However, charity has turned into a machine that buys influence and of course, it comes with a tax free benefit.

The world may be going through a pandemic, but that is certainly no reason to donate in discretion. In fact, the super-rich rarely donate in silence because they need to build on their symbolic wealth. Sociologists call this phenomena ‘Symbolic Capital’. The term ‘philanthrocapitalism’ was coined barely a decade ago and is now a reality across the world. Although the super-rich are unwilling to be part of the tax structures of their respective countries, they are more than willing to fund and finance certain projects provided they receive the full media coverage and credit for it, not to mention a tax cut. Of course, this kind of charity is a win-win for them. It helps normalise their image and also buys influence in specific parts of the world. Bill and Melinda Gates are at the forefront of the long list of celebrity charity donors, especially in the poorer parts of the world. They received widespread media coverage for their colossal kindness in India through the Gates Foundation on Immunization. Yet, the authorities in India became wary when they realised that the Gates Foundation also backed GAVI, a global vaccine alliance that is backed by pharma giants. Understandably, it raised questions of business laced with charity, which was proved right when it became known that pharma giants were charging developing nations more for the pneumococcal vaccine than, for instance, a developed country like France. Those critical of the confidentiality of these dealings are silenced and reminded that medical innovation and life-saving drugs come at a price. In the race to find a vaccine for Covid-19, teams around the world are burning the midnight oil. The Gates Foundation has also funded research into a ‘universal flu vaccine’, the mother of all vaccines. It is believed that a vaccine will be rolled out in a year to combat Covid-19. Until then, social distancing and hoping our immunity withstands the fight is what we can do for ourselves. While thousands are battling it in poorly equipped hospitals, super rich tax dodgers, who have never contributed to health systems, are getting away with murder.

Oxfam’s ‘Time to Care’ report, published in January 2020, highlights the fact that the world’s 2,153 billionaires have more wealth between them than the remaining 4.6 billion people. It might pain those who are concerned about the development of women to learn that the combined wealth of the world’s 22 richest men is more than the wealth of all the women in Africa. Lastly, the report states that ‘taxing an additional 0.5% of the wealth of the wealthiest 1% over the next 10 years would generate 117 million jobs in education, health and elderly care sectors’. During the pandemic, nurses all over the world have been asked to work round the clock, and their salary structures do not include bonuses and rewards. Covid-19 exposed another reality of the rich who were ‘confined’ within the luxury of their plush homes as opposed to those who were truly confined and crammed in rooms. While many of us can work from home, certain people have had to carry on battling the pandemic as our first line of defence. Ironically, our current economic model rewards them the least. Nurses, delivery services and refuse collectors have been underpaid almost all their lives, and bonuses or rewards are unheard of for the vast majority of them. Yet, they have been working round the clock through the pandemic. And while we applaud our health care workers all over the world, few are willing to address the uneasy reality. Why are their salary structures abysmally low? Even richer nations are not able to meet the challenge because the public sector is so poorly equipped. Of course, some of the super-rich have gone out of the way to help people through these tumultuous times. As the shutdown or lockdown threatens to bring the economy to a standstill, some companies that allied themselves with lobbies to avoid taxes for years are now queuing up for government bailouts. The long list includes cruise ship industries, airline industries and auto industries, many of which have been skirting the law for decades when it comes to coughing up their share of taxes.

It is now becoming increasingly clear that the economy is going to go pear-shaped, but certain businesses will emerge as winners. For instance, Amazon is looking to hire 100,000 people to meet its delivery services. But when they were recently subjected to a digital tax, Amazon, Facebook, Google and other tech giants were unwilling to pay a small price of their fortunes. Governments all over the world are bailing out their businesses, but the super-rich remain untouchable. The French government has pledged €5 billion to Renault and €7 billion to Air France. Last year, the CEO of Nissan Renault, Mr Ghosn, was arrested by the Japanese authorities who accused him of under-reporting his income in the region of €100 million. His influence allowed him to first evade taxes and then the Japanese legal system. Of course, one may argue that a corrupt CEO is not the French nation’s fault, but Carlos Ghosn’s rise and fall gave us insight into the corruption at the highest level where accountability was absent. In the end, the honest taxpayer has been left to bail out the tax evaders. Thus, the Pyramid stands with the super-rich at the apex and a growing base of people whose contributions to the tax structure are exploited by the ruling elite who vote to bail out the super-rich.