Inflation: The Pandemic, Big Oil and Billionaires

There was an interesting interview on inflation on the CBC morning show out of Halifax on March 18.  A number of the ‘drivers’ of our current and perhaps future inflation were discussed:  Wage demands; Supply chain disruptions due to the pandemic; The surge in the price of petroleum products as a result of Putin’s brutal war.

Two massive sources of inflation were missed, perhaps because the economic analysis that supports our current economic system does not see them as problems or sees them as givens.  They are aspects of our economy that like oceans or mountains are simply elements of the economy beyond question. 

During the pandemic, between March 2020 and December 31 2021, Canada’s billionaires increased their wealth by over $110 billion dollars.  A 50+% increase in wealth.  In 2016, 20% of Canadians owned 73.5% of all Canada’s wealth (Parliamentary Budget Officer). The poorest 40% owned 1.2%.  If that bottom 40% got a 50+% raise, economists would issue dire warnings.  Shared among 14,800,000 poorer Canadians, the $110 billion would raise the wealth of each and every one of them by $7,432.  During the pandemic, while the billionaires were already enjoying a superlative comfortable leap forward, almost 15 million Canadians lived in fear for their homes, unsure where the next month’s meals might come from.  Then the billionaire’s companies began buying the homes rented by the Canadians hit hardest by the pandemic.

ImageThe Russian President, perhaps the world’s richest billionaire, decided to invade Ukraine.  One result was a skyrocketing price for oil.  Did the cost of extracting the oil from the ground increase dramatically?  No, it remained generally the same.  But the price for that oil delivered huge windfall profits to the oil companies and the billionaires who own and control them.  Did the oil companies deliberately moderate prices to prevent inflation?  No, they wallowed in it and cheered Jason Kenny and their other puppets calling for a massive government support to increase production.  As the graph at the left shows, even after the price per barrel fell they hung on to their windfall at the pumps in the US[1].  How will they use that windfall profit?  The benefits will almost assuredly go to shareholders and senior executives.  Yes indeed, to the 20%.  It reminds one of the famous words of the Prime Minister:  “We are all in this together.”  Perhaps he is together with the 20%.

The underlying problem with economic analysis and the media is less and less the “F WORD” word.  The much bigger problem is the “C WORD”, ‘Capitalism’.  At the very heart of ‘capitalism’ is the idea that human society, all life on the planet, the planet itself and even outer space must be harnessed in the service of capital.  The shareholders, who create and control publicly traded corporations, hire managers for the purpose of maximizing the return to them in dividends and share price increases.  They reward them very handsomely indeed when they succeed and dismiss them when they are not successful enough at achieving that purpose.  The purpose of an oil company is not to supply people with energy but to maximize the return to investors. 

The explosion of billionaire wealth has other inflationary impacts.  Billionaires cannot eat an unlimited amount of food – besides, their food choices differ from the choices of the bottom 80% of the population.  But they can invest in ‘food commodity futures’ which, in a time of rapidly increasing climate disasters impacting the food supply, should be a good investment for them.  It will also drive inflation. 

Then, as alluded to above, there is housing.  In the words of one savvy investment advisor, “Many Canadians no longer consider real estate as only something they can live in. For the past few decades, Canada’s real estate market has become a booming industry exhibiting immense returns.  Real estate investment is an ideal way to park your capital to watch your investment grow. It’s also a fantastic way to create an income-generating source.”[2]   Billionaires are not short of investment advisors, lawyers and accountants.  Another investment professional advises, “If you’re investing in real estate primarily for profit, you should look at multiple-unit rental housing or commercial properties, especially those with big parking lots or extra land. Investments like these can give you current income, plus long-term development possibilities.”[3]

This raises the whole question of the role of markets and how they operate and impact inflation.  Our current national equity, commodity and other financial markets bear little resemblance to Adam Smith’s ideas about markets in towns dotting the English countryside.  Those were markets where everyone knew each other’s families.  They were imbedded in communities.  Today’s national, globally linked markets respond to purchasing power.  Wealth conveys purchasing power.  Understanding today’s markets requires an understanding of the distribution of income and wealth.

Globally the top 1/100th of 1 percent, (520,000 adults in the world) now own 11 percent of all wealth, up from 7 percent in 1995.  The richest 10% of the global population currently takes 52% of global income, whereas the poorest half of the population earns 8.5% of it.  The poorest half of the global population barely owns any wealth at all, possessing just 2% of the total. In contrast, the richest 10% of the global population own 76% of all wealth. The world’s 2,153 billionaires have more wealth than the 4.6 billion people who make up 60 percent of the planet’s population.[4] 

Globally, billionaires value the same tax avoidance, wealth hiding financial rules as the Russian oligarchs used to park their ill-gotten gains around the world.  Their investments, guided by computerized investing, accountants and lawyers are the largest market drivers simply by the volume of their holdings.  In fact our financial industry has made Canada a haven for global billionaire wealth.[5]  But does not all that foreign wealth make life better for ordinary Canadians?  The answer is no.  But it does make it better for the richest 20% especially those involved in the financial industry – bankers, accountants, lawyers and lobbyists.  We have a capitalist economy designed to work for the super wealthy.  Let’s remember, functioned so well for them that during the pandemic they increased their wealth by more than $110 billion. 

Back to our current national equity, commodity, real estate and currency markets.  Their dynamics are not influenced by the 80% of the population who have little wealth and barely enough income to survive the month.  Inflation in these markets is driven by the top 20% and mostly by the top 10%.  They drive housing markets and are positioned to reap windfall profits from pandemics, wars and the catastrophic impacts of climate change.  The huge windfall gains funneled to the 20% become fuel for sophisticated computer and accountant speculation.  What else would they do with all that wealth besides get their ‘wealth managers’ to find tax havens and high return investments?  The pandemics, wars and climate catastrophes are a major threat only to the 80%.  For those with wildly inflating incomes and wealth, inflation is not really a problem.  If your wealth increases by 50% 10% inflation is not a problem.  Nor is housing, food, clothing or income security.

The bottom line on inflation:  We need an alternative to billionaires.  It is possible!




[4] World Inequality Lab (2022) World Inequality Report 2022, Coordinated by

Lucas Chancel (Lead author), Thomas Piketty, Emmanuel Saez, Gabriel Zucman,


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