In Mexico, there is an old man who owns telephone companies, tobacco companies, mining companies, financial companies, hotels, paper mills, entire neighborhoods, a good chunk of the country. He owns a museum, is 82 years old, has some gold teeth, 300,000 people work for him, and he has a net worth of over $100 billion. And right there, there’s another, slightly smaller one, who has mines, oil, trains, cinemas, construction companies, buildings, shopping centers, lots of hair, a collection of ties, is 70 years old, and has around $30 billion. They are called Carlos Slim and German Larrea. They are certainly two very nice gentlemen, their suits impeccable. They are also the two wealthiest people in Latin America, and between them they have regarding $130 billion: the same amount owned by the poorest half of Latin Americans, 334 million people. Equality, as we were taught in school, is simple: 1=1, 2=2… Inequality can be more complicated: 334,000,000=2. If someone wanted to summarise what the famous Latin American inequality means, they might use this direct formula: 334,000,000=2.
But perhaps we should reconsider: we are often comforted by imagining inequality in terms of numbers, diagrams, drawings. But inequality is, in reality, many millions of people – many people – who, day following day, cannot cure their illnesses, educate their children, feed them: who do not live the lives they deserve. This Oxfam report tells us, for example, that an average person in the region would have to work 90 years to earn the same as a billionaire earns in a single day.
We know it, we forget it: Latin America is the most unequal region in the world. The numbers are conclusive: the richest one percent in Latin America concentrates almost 55 times more wealth than its poorest half; in the European Union, the richest one percent concentrates seven times more than its poorest half. This means that Latin America is eight times more unequal than Europe; the question that remains is why.
One answer is that, in these idiotic days, it seems normal to many that two people have the same assets as 334 million: it is an extraordinary cultural achievement, just what the joker billionaire Warren Buffet pointed out when he said that there had been a class struggle and that his class had won it.
But the basic answer is, as so often, given by Dr. Pero Grullo: Latin America is the most unequal because it can. Or, better yet: because the rich Latin Americans can. These gentlemen have always lived off the extraction and export of raw materials – gold, silver, bananas, meat, soy, coffee, coca, copper, wheat, oil, sugar, lithium, and many more. These exploitations do not require a large or highly qualified workforce: the rich Latin Americans do not need their poor to work. And, since their products are exported, their internal market matters little to them: the rich Latin Americans do not need their poor to consume. If they do not need them to work or consume, they can afford to keep them in poverty and marginality. They can afford so much inequality.
For this, they need, above all, the states. The rich Latin Americans often complain that they pay a lot of taxes and that their states do not provide them – as they do in Europe – with health, education, security. They say – and it is true – that they buy these services from private companies and why should they pay taxes to a State that is of no use to them. It is blindness or cynicism: what they buy when they pay taxes is their security. They pay so that their states contain these poor people, prevent them from destroying everything: if possible, with subsidies and handouts; if necessary, with force.
But they believe that a little is enough for that. That is why their personal income taxes are – on average – the lowest in the world, and have been halved in the last four decades. And yet they avoid them with ease. Oxfam’s report shows that throughout the region the poorest half give 45% of their scarce money in taxes; the richest one percent pay less than 20%.
So that the poorest ensure that the rich receive the attention they deserve – to reduce inequality – Oxfam proposes, among other things, a tax on large fortunes. Its numbers are clear: 2% per year on net worth for those with more than $5 million, 3% for those with more than $50 million, and 5% for those with more than $1,000 million. This is what people like Javier Milei call the “aberration of social justice”, an “armed robbery”. In the most brutal robbery, if someone has $1,000 million and hands over $50 million, they still have $950 million left: enough to eat almost every day – and preserve inequality.
But these taxes, without seriously harming anyone, would raise more than $60 billion a year, which would be enough to end hunger in the region – and so many other achievements. If these rich people were smart, they would do it: it would be better for them to give up a small slice to keep the cake for themselves and continue enjoying it in peace. Because this extreme inequality is causing many millions of Latin Americans to despise democracy: how can we expect them to defend it when it is an endless series of privileges and differences, when it is nothing more than the system in which they live unhappy lives?
Inequality is not just an ethical problem: it produces more hunger, more suffering, more violence, and that anger that millions feel. For now, those rich people manage to channel it: they have been able to invent and impose characters who criticize the political system while deepening economic differences, but the trick will not last forever – and, then, they will miss those times when they might have given up something to keep almost everything.
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The Stark Reality of Latin American Inequality: Two Billionaires, 334 Million in Poverty
Imagine a world where two individuals possess the same wealth as the poorest half of an entire continent. This is the harsh reality of Latin America, where the gap between the rich and the poor is more pronounced than anywhere else on the globe. Carlos Slim and German Larrea, two prominent figures in the Mexican business world, epitomize this extreme disparity. Slim, with his vast holdings in telecommunications, tobacco, mining, and even a museum, boasts a fortune exceeding 100 billion dollars, while Larrea, with interests in mining, oil, transportation, and real estate, holds a staggering 30 billion dollars.
The Numbers Tell a Grim Tale
The inequality in Latin America is not just a matter of statistics; it’s a stark reality that impacts the lives of millions. The poorest half of the population in this region struggles to access basic necessities like healthcare, education, and adequate nutrition. A recent Oxfam report highlights this stark contrast: an average person in Latin America would have to work for an astonishing 90 years to earn what a billionaire makes in a single day.
The statistics are undeniable: the richest 1% in Latin America controls 55 times more wealth than the poorest half of the population. This figure dwarfs the European Union, where the richest 1% controls a mere seven times more wealth than its poorest half. Latin America’s inequality is eight times greater than that of Europe, raising a critical question: why?
A Legacy of Exploitation and State Complicity
The answer lies in the deeply ingrained systems of exploitation and a state that often acts as an enabler of wealth inequality. The wealthy elite in Latin America have historically profited from the extraction and export of raw materials, leaving the vast majority of the population to contend with poverty and marginalization. From gold and silver to bananas, meat, soy, coffee, coca, copper, wheat, oil, sugar, and lithium, the region’s resources have been plundered for profit.
This unchecked accumulation of wealth is facilitated by a political system that caters to the interests of the wealthy. While the rich complain regarding excessive taxes and inadequate public services, it’s often their own tax avoidance strategies and underinvestment in social programs that are at play. It’s a self-serving narrative to justify their wealth while deflecting responsibility for the systemic issues that perpetuate poverty.
A Call for Systemic Change
The solution to this crisis requires a fundamental shift in both policies and attitudes. Oxfam proposes a progressive tax on large fortunes as a viable strategy to address the widening gap. This would involve a levy of 2% per year on net worth for those earning over 5 million dollars, 3% for those with over 50 million, and 5% for those with over 1 billion dollars. While some decry this as “social injustice” or “robbery,” it’s important to remember that even with such a tax, the ultra-wealthy would still retain vast fortunes, capable of living comfortably.
The potential benefits of such a tax are undeniable. It might generate more than 60 billion dollars annually, enough to drastically reduce hunger in the region, improve access to healthcare and education, and make significant investments in social infrastructure. This might be a crucial step towards a more equitable and just society. Let’s not forget, radical inequality doesn’t just hinder development; it also undermines democracy and fuels social unrest.
It’s time to acknowledge that extreme wealth disparity is not just an ethical problem; it’s a societal scourge that breeds injustice, suffering, and instability. The Latin American elite should recognize that their continued accumulation of wealth while millions struggle is not sustainable. Addressing inequality, through progressive tax policies and investments in social programs, is not just an act of fairness; it’s a path towards a brighter and more sustainable future for the entire region.
