Of Davos, Luxury Boats and Downward Spirals

By Suhaib Riaz.

At the recently concluded gathering of world elites, also known as the World Economic Forum at Davos, one issue seemed to come up more than it has in the recent past: societal inequality. Oxfam released a well-timed report on economic inequality and directly asked for world elites at Davos to turn their attention to it.

The report highlighted how the 85 richest people in the world (who could hypothetically fit into a double-decker bus) now own wealth equal to the lower 3.5 billion people (half the world’s population). Interestingly, the Oxfam site’s link to the report had the picture of a boat, or more precisely, that of a luxury yacht – presumably the kind that those elites may own or have access to. The water all around it seems stable and beautiful as ever. It is hard to resist a metaphor here, which I will expand on through this article.

On the face of it, the call by Oxfam can be puzzling. The fact that societal elites are being asked to give attention to inequality raises a fundamental question: Why should they care?

Blogging Highlights: Inequality for All!?

This week’s recommendations relate to a fundamental problem which seems to become bigger rather than smaller – inequality. The review covers the two-year anniversary of the Occupy Wall Street movement, the new documentary “Inequality for All” with Robert Reich, and a forthcoming Human Relations special issue on Inequality.

Can the Church transform the Pay-day lending market?

By André Spicer, Professor of Organizational Behaviour, Cass Business School (London, UK).

An increasingly important part of today’s banking landscape are payday lenders. These are businesses that offer short-term loans at extremely high rates of interest for small amounts to borrowers who usually earn less than the national average. For instance, one of the leading UK lenders has a top rate of over 5,000% APR. Pay-day lenders have typically located themselves in retail premises in the midst of impoverished communities which have been neglected by banks. More recently, they have taken to the web. Leading online lenders use an impressive range of indicators to calculate the riskiness of potential borrowers. These range from traditional credit scores to more unexpected measures such as the computer you are using, the locale you are logging on from, and even your likes on Facebook. One site takes into account over 8,000 data points when deciding on your rate. To big data nerds, this might sound impressive. To the social critic, it sounds like big brother meets the mob.