452. REDUCING INEQUALITY CANNOT BE ACHIEVED WITHOUT REDISTRIBUTING CURRENTLY AVAILABLE RESOURCES MORE FAIRLY.

[This is why the Readers keep insisting, not on poverty alleviation, but on disparity reduction].

1. Unite States citizens tend to assume that history marches forward and that their children will do better than they did. This is a fundamental tenet of the American Dream. Sometimes though, there are detours… The US path to natural progression towards greater equality has been detoured for decades now. (Heather Boushey) Actually, the distribution of household income in the US is as unequal as in Bangladesh or India. Anywhere, inequalities worsen along racial lines.

2. Add to this: The existence of vast US offshore wealth reserves hides the true extremes of wealth inequality. Even on the official measures, wealth concentration is proceeding rapidly. The ratio of Bill Gates’s wealth pile to that of the average US citizen is roughly the same as that of the richest Roman aristocrats in AD400. Left to their own devices, most societies –including ancient Rome– seem to reach a demographic and technological limit of inequality. What reverses this is violence –and not just ordinary violence… (Walter Scheidel)

Growth of the GDP should not be interpreted as implying that inequality is good for growth*

3. As regards inequality and growth, the negative impacts of the latter on equality are best identified by analyzing how inequality changes both over time and across countries. (Kristin Forbes) This is why, as human rights activists, we are all for ‘equity in growth’ rather than supporting ‘growth for equity’; growth first and fair shares afterwards is not acceptable to us.
*: The GDP is an imperfect measure of economic welfare with well-known drawbacks. It records largely monetary transactions and does not include environmental externalities since nobody pays the price for them. It also does not consider the depletion of natural resources or the loss of biodiversity. There is definitely a gap between GDP and economic welfare. Its shortcomings have become especially obvious in its failure to account for inequalities. Equating GDP growth with an improvement in economic welfare deviously assumes there is no reason for anything other than keeping the status-quo as relates to distribution. Nobody can ignore distributional questions anymore! Simmering discontent with economic policy that follows business-as-usual is hard to fathom given the evidence of environmental and human costs of past and present economic growth. (Diane Coyle)

Are we not thus enslaved by finely integrated political, economic and cultural powers?**

-Keep in mind that to achieve substantial equality is not how to treat people in the same way, but what is required is for people, in fundamentally different circumstances, to actually have equal enjoyment of their human rights (HR).
-Not being facetious, these days, a majority of people are increasingly equal, but equally miserable. (Yanis Varoufakis)

4. The ideals of modern democracy, encompassing equality of social conditions and individual empowerment, have never been more popular. But they have become more and more difficult, if not impossible, to actually be realized in the grotesquely unequal societies we are currently living under the brand of globalized capitalism. Issues of social justice, HR and equality have receded (along with conceptions of what a free society or community means) to be replaced by the freely-choosing-individual in the marketplace. According to the prevailing view, the injustices entrenched by history or by social circumstances cease to matter. The argument goes as follows: “The slum-dog, too, can be a millionaire, and the individual’s failure to escape the underclass is self-evident proof of his poor choices”. Think about the opaque workings of finance capital, the harsh machinery of social security, the failing judicial and penal systems and the unrelenting ideological influence of the media and the internet. In any mass society like ours, life chances are simply unevenly distributed; there are permanent winners and losers; both national and globally, a minority dominates the majority; and the elites are used to manipulate and deceive.*** Everywhere a majority that was promised growing equality sees social power monopolized by people with money, property, connections and, yes, sometimes talent. No surprise the majority feels shut out from both higher culture and decision-making. In Robert Musil’s words: The “liberal scraps of an unfounded faith in reason and progress have, over and over, failed modern human beings”. For many decades, the religion of technology and GDP and the crude 19th-century tenet of self-interest have dominated our politics and intellectual life. (Pankaj Mishra)
**: Culture is also something imposed on a reluctant majority by a minority that managed to gain possession of the instruments of power and coercion. (Siegmund Freud)
***: Let us not be fooled: The fact that poor countries have made their presence felt on the international scene by a kind of juridico-political insurrection and may now comprise a numerical majority, in no way has solved the problems of inequality in global negotiations.

Downstream consequences

5. We are here talking about a veritable inequality trap: Growing economic inequality heightens political inequality, which then increases the ability of corporations and rich elites to manipulate policy-making to protect their wealth and privilege, while the power of labor and women’s unions and opposition parties, among other, is increasingly eroded. (Kate Donald)

6. Ironically, the decision-makers that are most vociferous about inequality also seem to be those who ultimately refuse to take any measures to deal with it, even when such measures are obvious and available. It is almost as if allowing these people to vent their anger and discontent, and then echoing some of their concerns in carefully phrased empathy statements, is enough to deal with the problem. The disconnect between professed concern of policy makers and actual policy actions has contributed to some remarkable contradictions.

7. Most countries do not tax wealth per-se, so there is little by way of official data to go on. This, while those rendered poor typically hold net debt. For obvious reasons, the absolute increase in incomes for the poorest income deciles is what is relevant for the elimination of poverty –and there has hardly been any increase over this period for the bottom four deciles. So, in terms of absolute incomes, the past three decades have not generated convergence, rather there was divergence instead. This stagnation of incomes at the bottom is driven by increased inequality within countries, much of which is encompassed within wage incomes, because the top end of wage and salary earners, the managers, are essentially capitalists getting some shares of profits. In recent years, incomes of managers and top executives have exploded relative to wages of ordinary workers. Taxation to reduce extreme wealth and prevention of possibilities of tax evasion and tax avoidance has been practically absent.

8. Beyond token efforts, the use of public revenues to improve basic conditions of citizens and to provide social protection has been absent as well. But also absent are: A regulation of labor markets to provide worker protection and enable workers to organize and mobilize for better wages and working conditions; policies to reduce social and economic discrimination (by gender, as well as other social categories) …and so on. These policies are well known and are available to most governments, so that lack of knowledge cannot be the reason why they are not put into place and implemented. These policies are simply not being considered, however much lip service is being paid to the problem of inequality. (Jayati Ghosh)

Bottom line

9. Changing the unequal economic, social and cultural tendencies addressed above, therefore, necessarily requires changing the politics –not only to make governments ‘more accountable’ to the people, but also making people realize the extent to which they are being fooled. (J. Ghosh) What this means, is that we need to mitigate power asymmetries to allow HR to flourish leading to conditions of at least a rough equality. (Alicia Yamin)

Claudio Schuftan, Ho Chi Minh City
Your comments are welcome at schuftan@gmail.com
www.claudioschuftan.com

Postscript/Marginalia
In a recent article in The Guardian (‘The science of inequality: why people prefer unequal societies’), to my surprise and utter skepticism, authors Starmans, Sheskinn and Bloom argue that progress in the real world will be facilitated by centering the discussion on exactly what people do care about, i.e., fairness, and not on what people do not care about: equality.

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