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	Corporate profiteering is driving inflation, cost of living pressures by EU Observer, Oxfam, EPI, PBS, agencies   19 Jan. 2023   Corporations that dominate food and fuel markets have been using the war and pandemic as a smokescreen to bump up their prices much more than their costs. Oxfam’s Alex Maitland explains how increased corporate profits have driven at least half of inflation.   Open an economics textbook and it will tell you something that intuitively makes sense: when there’s a shortage of something (supply falls) or everyone wants something more (demand rises), prices go up.   And in the past two years, we have indeed had inflationary pressure from both supply and demand. First there was pandemic-related supply chain disruption, then the supply shocks caused by the war in Ukraine (think food blockades or sanctions on Russian oil and gas).   Meanwhile, on the demand side, higher-income households used pandemic savings to spend more when economies re-opened, boosting demand and prices.   However, there’s another huge factor driving inflation that you won’t find in the basic, textbook economics model – one that has driven at least half of price increases in developed nations: excess corporate profit, or what some have dubbed ’greedflation’.   In the US, the UK and Australia, studies found that excess corporate profits drove 54%, 59% and 60% of inflation, respectively.   The idea is simple – as global prices rose due to the supply and demand drivers, corporations increased their prices. But they didn’t just increase them to cover higher costs. They used the war and pandemic as a smokescreen to bump up their profits and margins. You may remember when oil prices and fuel pump prices rocketed. Yet, a few months later as wholesale oil prices began to decline, they didn’t drop much.   Economist Lyndsay Owens, who has been tracking these earnings, put it best though, saying recent price rises could be viewed as a moment when “profit maximisation and opportunity collides”.   Around the world, corporate profits in some sectors are soaring. In the US, profit margins are at their highest in 70 years. In the UK, the margins of the 350 biggest listed corporations were 74% higher than before the pandemic and in Spain 2022 profit margins were 60% higher than in 2019.   Conventional economic models will say that, because free markets are competitive, companies will be forced to lower their prices – or their competitors will, and take their business. However, some sectors have become so concentrated that there isn’t much competition. Anyone who’s played the board game Monopoly knows how that ends.   Nowhere is market concentration more apparent than in the food and energy sectors. In the US, for example, four corporations control 55% to 85% of meat sales. Four food traders control 70% of global grain. Six oil giants dominate global energy production.   These sectors are driving the lion’s share of inflation – the increasing cost of food is a major driver of inflation, as is energy – both directly but also when including transport. The inflation from food alone is more than overall inflation from 2016-2020.   Given the evidence that corporate profits are fuelling inflation and that food and energy prices are the most significant part of inflation, we teamed up with the data analytics agency Exerica, to investigate the corporate profits in these sectors.   We found that the corporations in these sectors made eye-watering windfall profits in 2022. Just 95 corporations made $306 billion in windfall profits. Overall, profits of food and energy corporations increased by 256%, of which 84% was paid to rich shareholders in the form of dividends and buybacks.   Most striking of all, though, was the profit margins. Some argue that windfall profits are just the product of companies passing on increased costs to consumers. However increased margins suggests that they are taking advantage of the crises to boost their profits. Our research found that 76% of the companies increased their net profit margins.   Breaking it down further – who did the $306 billion in windfall profits go to. Of the 46 food companies in the sample, which made a combined $70 billion in windfall profits – 39 (85%) had increased their margin. They also paid $82 billion to rich shareholders in 2022.   Some sub-sectors have had particularly notable increases in profits: synthetic fertiliser companies increased their profits 10 times on average, meat companies by five times, while farm equipment and agriculture commodity traders almost two times.   Unsurprisingly, some of these industries have been under the spotlight: the meat industry in the US, for example, following revelations of massively increased profits, has been targeted by the Biden administration plans to boost competition in the industry. Fertiliser companies are reaping the benefit of increasing gas prices making life impossibly expensive for farmers.   Friends in Kenya have told me about the terrible decision families are now having to make between feeding their crops with fertiliser and putting food on the table.   As oil and gas prices shot up in 2022, energy companies cashed in. Combined, these 49 corporations made $237 billion in windfall profits in 2022 and paid $157 billion to rich shareholders – 35 of these 49 companies (71%) increased their profit margins.   Governments across Europe and Latin America have introduced windfall taxes in response to these excess profits but despite record profits large companies have yet to pay anything. One oil company is even suing the EU over these taxes.   At the national level, government statistics can shed a light on ‘greedflation’. An Economic Policy Institute study in the US calculated that 53.9% of price growth could be attributed to increased profit margins, while labour costs were less than 8%. It makes clear that it wasn’t just that corporations were benefiting from inflation, but their excess profits are fuelling it.   This cost-of-living crisis is driving poverty and exacerbating hunger – the world’s poorest pay a far greater share of their income on food and energy and so any price increases hit them hardest.   Yusuf a taxi driver in India told us: “Gas cylinders used to cost Rs 450, but now they cost slightly more than a thousand rupees [$12]. Now we have to choose between feeding our children or educating them.”   There are two parts to addressing this corporate profiteering. The first is perhaps obvious, introducing a windfall profits tax across all sectors to re-distribute the ill-gotten gains into social good, helping people around the world suffering from the cost-of-living crisis.   A 90% tax on the windfall profits of the 1,000 largest companies in the world could generate over $1 trillion. It would also help reduce inequality. Most company profits go directly to shareholders who overwhelmingly sit in the richest 1%, for example the richest 1% own 54% of the shares held by US households.   The second priority is to limit companies’ market power. Proposals such as introducing and enforcing competition laws as well as re-framing the way companies are run so employees have a stronger voice. Oxfam’s ‘Power, Profits and the Pandemic’ published in mid-2020 warned of the risks of unbridled corporate power and sets out how to tackle it.   Inflation isn’t just happening because of our global crises. It is happening because we are failing to limit corporate power. Our governments have a choice: curb this power and tax windfall gains to ease the cost-of-living pain, or continue to allow price gouging to run rampant, bringing untold misery to hundreds of millions of people across the world.   http://views-voices.oxfam.org.uk/2023/01/greedflation/ http://euobserver.com/green-economy/156781 http://rooseveltinstitute.org/2023/01/30/how-not-to-fight-inflation/ http://rooseveltinstitute.org/publications/the-causes-of-and-responses-to-todays-inflation/ http://australiainstitute.org.au/post/profit-price-spiral-excess-profits-fuelling-inflation-interest-rates-not-wages/ http://centreforfuturework.ca/2023/01/20/profits-not-wages-have-driven-canadian-inflation/ http://cupe.ca/record-high-corporate-profits-behind-inflation http://www.unitetheunion.org/news-events/news/2022/june/new-unite-investigation-exposes-how-corporate-profiteering-is-driving-inflation-not-workers-wages/ http://www.theguardian.com/commentisfree/2023/feb/21/banks-record-profits-windfall-tax   http://oversightdemocrats.house.gov/news/press-releases/subcommittee-analysis-reveals-excessive-corporate-price-hikes-have-hurt http://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/ http://rooseveltinstitute.org/publications/why-market-power-matters-for-inflation/ http://www.theguardian.com/commentisfree/2022/sep/25/inflation-price-controls-robert-reich http://www.sanders.senate.gov/op-eds/our-economic-crisis-isnt-inflation-its-corporate-greed-and-the-gop-will-only-make-that-worse/ http://bit.ly/3SUOnum http://www.commondreams.org/news/2022/11/03/powell-wasnt-asked-single-question-about-corporate-profits-driving-inflation http://www.americanprogress.org/article/wages-and-employment-do-not-have-to-decline-to-bring-down-inflation/ http://inequality.org/research/raise-corporate-taxes-not-interest-rates/ http://www.pbs.org/newshour/show/why-corporations-are-reaping-record-profits-with-inflation-on-the-rise   http://www.greenpeace.org/international/story/58437/hunger-profiteers-food-security/ http://ipes-food.org/pages/foodpricecrisis http://ipes-food.org/topics/Agribusiness http://www.lighthousereports.nl/investigation/the-hunger-profiteers/ http://undocs.org/A/HRC/52/40 http://policy-practice.oxfam.org/resources/fixing-our-food-debunking-10-myths-about-the-global-food-system-and-what-drives-621411/ http://www.fian.org/en/press-release/article/global-response-to-food-crisis-should-not-line-corporate-pockets-3029
	States obligated to safeguard equitable access to and use of land by UN Committee on Economic, Social & Cultural Rights   Jan. 2023   The UN Committee on Economic, Social and Cultural Rights has issued a guidance note to clarify States’ obligations regarding the access to, use of and control over land, particularly about pressing issues affecting human rights such as eviction of land users, international investment, land-related conflicts, and climate change.   “In many parts of the world, land is not only a resource for producing food, generating income, and developing housing; it also constitutes the basis for social, cultural and religious practices and the enjoyment of the right to take part in cultural life,” the Committee states in its guidance note, formally known as a general comment.   The high demand for land and rapid urbanisation in most parts of the world has significantly impacted the rights under the International Covenant on Economic, Social and Cultural Rights. In cities, the financialisation of housing markets has fuelled speculation and inflation, affecting the rights to an adequate standard of living and adequate housing of those left behind.   In rural areas, the competition for arable land from large-scale development projects and tourism has significantly affected the livelihoods and rights of rural populations.   “Land degradation owing to overuse, poor management and unsustainable agricultural practices had caused food insecurity and water degradation and is directly linked to climate change,” the Committee states.   The general comment provides specific advice on legitimate tenure rights. States parties should refrain from evicting users from land on which they depend for their livelihoods and from using forced evictions and demolition of property as punitive measures.   The Committee calls on States parties to “introduce and implement national legislation that explicitly prohibits forced evictions and sets out a framework for eviction and resettlement processes to be carried out in line with international human rights law and standards.”   Noting the growing negative impact on individual groups, peasants and indigenous peoples’ access to productive resources as a result of international investments, the general comment urges States parties to “take specific measures to prevent their domestic and international policies and actions, such as trade, investment, energy, agricultural, development and climate change mitigation policies, from interfering, directly or indirectly, with the enjoyment of human rights.”   Structural unequal distribution of land can also be a major root cause of conflicts, which in turn also lead to forced displacements and land dispossession, impacting the most vulnerable.   “States should make every effort to prevent land dispossession during internal armed conflicts. If dispossessions do nevertheless occur, States are obliged to establish restitution programmes to guarantee to all internally displaced persons the right to have restored to them any land of which they were arbitrarily or unlawfully deprived,” the Committee underlines.   The General Comment reflects the Committee’s concerns about the impact of climate change on access to land. “Rising temperatures, changing patterns of precipitation, and the increasing frequency of extreme weather events such as droughts and floods are increasingly affecting access to land,” the Committee explains, adding, “States have an obligation to design climate change adaptation policies at the national level that take into consideration all forms of land use change induced by climate change.”   The full text of the general comment on Land and Economic, Social and Cultural Rights is now available online.   http://www.ohchr.org/en/press-releases/2023/01/states-obligated-safeguard-equitable-access-and-use-land-un-committee http://www.ohchr.org/en/treaty-bodies/cescr Visit the related web page
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