I see in the news that Phoenix Energy has been sold to a Hong Kong billionaire. From the BBC:
Phoenix Energy is being sold to a consortium associated with one of Hong Kong’s wealthiest businessmen.
Phoenix owns and operates the largest natural gas distribution network in Northern Ireland, covering Greater Belfast, Larne and East Down.
It is currently owned by the NatWest pension fund and an Australian infrastructure investor.
They have agreed to sell it to three firms in the CK Group, which is owned by billionaire Li Ka-Shing.
‘We are very happy to acquire another quality asset characterised by stable returns,” Victor Li Tzar-kuoi, Li’s elder son and chairman of CK Infrastructure said in a statement.
The consortium is paying about £760m with the deal expected to complete shortly.
Mr Li is one of Asia’s wealthiest people having built a business empire in involved in property, retail, telecoms and power.
The billionaire, who is also a Canadian citizen, was knighted in 2000.
His other UK investments include the Superdrug retail business.
A few interesting things. The current owners of Phoenix Energy were the NatWest pension fund and an Australian infrastructure investor. You can’t help but conclude that global capitalism is just a huge game of monopoly with assets being bought and sold by extremely wealthy individuals or asset funds. The quote ‘We are very happy to acquire another quality asset characterised by stable returns,” is very telling. It does not matter if it is a gas company, hotel, railway, etc; it is all just ‘assets’ to collect as part of the game.
Why does it matter? I am as capitalist as the next running dog, I have worked for myself my whole life, but it is clear to me the system is utterly broken. In its purest form, capitalism is freedom. It has given me the freedom to be my own boss, to earn a living on my terms, and not to be beholden to anyone. But now the game is rigged. Going back to our monopoly analogy, all the properties have been hovered up by the mega-rich, and we poor sods keep landing on them and having to fork over our ever-dwindling pile of cash to the ‘rent seekers’.
The concentration of wealth among the mega-wealthy has been a concerning trend in recent decades. Here are some statistics that highlight the wealth inequality between the ultra-rich and the general population:
1. Share of global wealth: According to the Credit Suisse Global Wealth Report 2022, the richest 1% of the global population owned 45.6% of the world’s wealth in 2022, while the bottom 50% owned only 1.3% of global wealth.
2. Billionaire wealth: As of December 2022, there were 2,668 billionaires worldwide, with a combined net worth of $12.7 trillion, according to Forbes. This wealth is concentrated among a very small group of individuals.
3. Wealth of the top 10: According to Oxfam’s “Survival of the Richest” report in 2023, the world’s 10 richest men own more wealth than the bottom 40% of humanity, which accounts for around 3.1 billion people.
4. Wealth growth: Between 1995 and 2021, the wealth of the richest 1% increased by $26 trillion, while the wealth of the bottom 50% increased by only $3 trillion, according to the World Inequality Report 2022.
5. Income inequality: In many countries, the share of national income going to the top 1% has been increasing, while the share going to the bottom 50% has been declining. For example, in the United States, the top 1% captured 20.3% of national income in 2021, compared to 12.3% in 1980, while the bottom 50% share fell from 20.3% to 14.1% over the same period.
These statistics illustrate the vast concentration of wealth and resources among a small number of ultra-wealthy individuals and families, while the majority of the world’s population holds a relatively small portion of global wealth. This inequality has raised concerns about economic fairness, social stability, and the potential for wealth-driven political influence.
It is a situation that only seems to be getting worse. The next big AI trends look to further concentrate wealth to a few mega companies.
The more the mega-rich hoard cash, the less there is for normal people to spend. This will affect the real economy, as people just can’t afford to buy goods and services. Governments have tried to cover up this problem by encouraging massive rates of debt by themselves and their citizens, but even this trick is not working as well as it used to, as the recent cost-of-living crisis shows.
What to do? Well, there needs to be more taxes on the super-rich. This week, the ministers of Germany, Brazil, South Africa, and Spain proposed that billionaires should pay a minimum of 2% of a wealth tax.
This issue will require a coordinated global approach, or the rich will continue to send their money from one offshore tax haven to another.
Like the rest of us, the rich don’t like paying taxes, but ultimately, even they know the system is broken and change is coming. Many rich people, such as Warren Buffet, have pointed out for years that the system needs to be changed. At the most basic level, if you don’t give normal people money, they will not be able to afford goods and services, and the value of the various companies the rich own will decline.
No one says capitalism is fair, but something is wrong when I start the game with £1, and you start it with £10,000.
I help to manage Slugger by taking care of the site as well as running our live events. My background is in business, marketing and IT. My politics tend towards middle-of-the-road pragmatism, I am not a member of any political party. Oddly for a member of the Slugger team, I am not that interested in daily politics, preferring to write about big ideas in society. When not stuck in front of a screen, I am a parkrun Run Director.
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