The Sun Never Sets on Colonial Wealth.
Colonialism and the origins of today’s extreme wealth inequality
I remember being in Kenya in 2020 and seeing the pictures of those protestors throwing the statue of the slaver into the sea and being so excited. I had been researching a piece on the Mau Mau and the appalling actions of Britain in Kenya in the 1950’s and reflecting on the huge willful ignorance in the UK about our colonial crimes. To see those protestors and see the subsequent resurgence in interest in colonialism in the UK and other parts of the Global North has been amazing.
In our annual Davos report we have often produced statistics on the profile of billionaires; for example how many are women or how many are black. When we do this there is always a lot of skepticism from colleagues. This is based on the concern that we don’t unwittingly give the impression that if only women and men or different races were equally represented among the super-rich everything would be fine, which is certainly not the case.
I think that a stronger understanding of the colonial legacy of today’s extreme wealth inequality, together with a better analysis of feminism and racism is the key to avoiding such an interpretation of these numbers. It ensures the point we are making is not that success would look like equal numbers of male and female billionaires, more black billionaires, or more billionaires from the Global South. Instead, these statistics are a concrete reflection of how today’s shocking levels of global wealth inequality are built on foundations of sexism, racism, and colonial expropriation.
How rich people in rich countries still own most of the world
So, what does the latest data show us about these North South relationships? Despite the rise of China in the last two decades, the overwhelming majority of the world’s wealth, and of the world’s super rich people remain in the global north. Global inequality, or the inequality between nations, has fallen by about 10% from a Gini of 70 to 62, thanks in large part to China, but it still remains as high as national inequality in South Africa, the worlds most unequal nation. Worryingly it has also started to rise again for the first time in 25 years. For Europe this is very much a legacy of colonialism and empire. By one measure, the UK extracted $45 trillion from India during the colonial period as well as deriving huge benefits from the trans-Atlantic slave trade. Wealth earned through slavery or colonialism continues to be invested in stocks, shares, real estate, and to grow relentlessly through the miracle of compound interest. One thousand pounds invested in 1850 by a Victorian man who made his money in India in would be worth 1.5 million pounds to his descendants today.
 £1000 simply represented in today’s prices would be worth £171,232. The increase to 1.5 million pounds assumes a compound interest rate of 4.3% which is what Thomas Piketty calculated in Capital in the 21st Century that the average rate of compound interest over the last five centuries.
Since the formal end of colonialism, neo-colonial relationships with the Global South have continued, relationships that constantly tip the economic balance and rig the economic rules in favour of rich nations. The United States has benefited hugely from this through their incredible economic dominance, particularly in the second half of the 20th century. Rich nations use their economic power directly, and indirectly through institutions like the IMF, where the US and Europe have over 40% of the votes and the US exercises a veto on all decisions.
This power is reflected in the numbers- the rich countries based mainly in the Global North2, despite representing 17% of the world population, still own 68% of global wealth and are home to 69% of the world’s billionaires. This analysis done by my wonderful colleague Anthony of the latest data from Forbes and UBS/Credit Suisse shows this clearly.
 It is true of course that the countries of the OECD are not all majority White, or indeed in the Global North, including these days countries like Kbut we did rerun these numbers with only those countries included (Australia, New Zealand, the US, Canada and Europe, and they were very similar in most respects. For example 61% of billionaires live in those countries in contrast to 69% of billionaires living in the OECD.
How the inequality between and within countries matters and is linked
It is worth remembering of course that whilst all citizens of rich countries have benefited from the inequality between the Global North and Global South, it is the richest in those countries who have harvested the huge proportion of the benefits. Colonialism and neocolonialism have predominantly benefited the richest people. For example, for most of the period Britain ruled India, average life expectancy for the poor in the UK was 25 years, and child labour was commonplace, as the owners of capital in Britain were just as willing to exploit their countrymen as those in the colonies. And today we have over 2 million of my fellow citizens regularly using foodbanks.
Conversely, in the Global South, inequality is extremely high, and whilst most ordinary people are paying a high price for colonialism and neo-colonialism, rich elites in the Global South are almost entirely insulated and are often working with colonial and neo-colonial powers against the interest of their people. What is clearly the case it seems to me that inequality between countries and inequality within countries are both hugely relevant to understanding todays’ world. What ties them together I think is the role of the very wealthy in ensuring these inequalities persist, and in constructing an economic system where 66% of all new wealth goes to those in the top 1%, is vital to understand if we are to bring it to an end.