Every January, the elite gather in Davos, Switzerland to
do business deals and listen to boring lectures by people who don't have either
money or power. It's called the World Economic Forum.
Every year, the Left-wing foundation, Oxfam,
simultaneously publishes its latest finding, which never changes much, that 1%
of the world's population owns half of the wealth.
These are public relations operations. The WEF's message:
"We've got it, and you don't." Oxfam's message: "They've got it,
and we don't." They are made for each other. They are joined at the hip.
DAVOS
The World Economic Forum is Duffy's
Tavern for the rich and powerful: "Where the elite meet to
eat."
Why do they go to the expense of gathering at Davos every
year? Because no one wants to be left out. As they said on radio ads for rock
and roll performances in my teenage years, "Be there, or be square."
Showing up means that you were invited. If you were not invited, you are not
regarded as being in the elite . . . at least not this year.
In 2011, Ross Sorkin reported on what it cost to attend. First, there was the annual
membership fee: 50,000 Swiss francs. In 2011, that was $52,000. But this was
for commoners. If you wanted to get access to the private meetings, which the
deal-doers presumably attend, you had to ante up $137,000 a year. Then there
was the cost of a ticket into the Davos meeting: $19,000. Added up, the annual
fee for insiders was $156,000.
Then there was the cost of a room. The budget rate was
$500 a night.
You had to get there. First-class fare to Zurich was
$11,000 in 2011.
You needed a chauffeur and expensive car. Add another
$10,000.
Then there are the other meetings throughout the year.
They get no publicity. But insiders feel the peer pressure to attend. "Be
there, or be square."
That is a lot of money to get bored listening to speeches
by upper-middle-class college professors.
The economic reality is this: the value of lost time for
deal-doers is far greater than the out-of-pocket, tax-deductible business
expenses. These people really are the elite. Either an attendee must get a deal
over the year, or else his membership and attendance are for show. "I've
got it. You don't."
OXFAM
Oxfam's marketers figured out years ago that the WEF's
Davos meeting is an ideal way to get free publicity for Oxfam in the world
press. It also gives the fund-raisers an opportunity to feature these stories
in their attempts to raise more money. "See? We're getting worldwide
attention." This is true. They are. So, every year, Oxfam publishes a
report intended to shock the economically uninformed. I have reported on
Oxfam's marketing strategy for several years.
The economically uninformed are unaware of Pareto's 20/80
law. Pareto was a Swiss economist who, in 1897, published a book summarizing
his discovery that wealth in European countries was distributed on a 20/80
basis. About 20% of the population owned about 80% of the wealth. Subsequent
studies have reported a similar distribution. This is so widely known among
economic historians that distributions that vary greatly from 20/80 are
regarded as suspect.
The Pareto distribution is a power law. This produces the
following:
20% of the population owns 80% of the wealth.
4% (20% of 20%) of the population owns 64% (80% of 80%) of the wealth.
0.8% (20% of 4%) of the population owns 51% (80% of 64%) of the wealth
4% (20% of 20%) of the population owns 64% (80% of 80%) of the wealth.
0.8% (20% of 4%) of the population owns 51% (80% of 64%) of the wealth
Thus, 1% of the population will own more than 51% of the
wealth.
This law seems to apply across national borders.
Every year, Oxfam reports breathlessly that 1% of the
population owns 50% of the world's wealth.
I think the statistics are flawed. Pareto's law indicates
that this should be greater than 50%. I reported on this in 2016: Pareto's
Law vs. Power-Seeking Reformers.
I also reported on this in 2014: Envy
Never Sleeps: Attacking the Rich.
I await Oxfam's latest report. Let's see if the richest
1% have increased their wealth above 50%.
Oxfam never supplies a detailed program to persuade
national governments to surrender their sovereignty over taxation to the United
Nations, so that the UN can impose steeply graduated taxes on the rich in order
to attain greater economic equality. This assumes that civil government can
significantly alter Pareto's distribution. This much is clear: if there is no
world government, then nothing is going to change.
My prediction: this 20/80 wealth distribution is not
going to change.
CONCLUSIONS
The WEF exists so that those with real money and real
power can display this to each other, and also a way for the WEF to extract big
money from well-heeled wanna-be's who are trying to buy their way in.
Basically, it's a grown-ups' version of the Little Orphan Annie Secret Decoder Ring. The
marketing concept is the same, but the price is higher than a label from a jar
of Ovaltine.
My hat is off to Klaus
Schwab, a German economist who dreamed up this high-income, legally
nonprofit Duffy's Tavern operation in 1971. This was serious entrepreneurship.
My hat is also off to the faceless marketer at Oxfam who
figured out a way to cash in annually on Schwab's operation.
As George Washington Plunkitt announced over a century ago,
"I seen my opportunities, and I took 'em."
