Tag: Wealth Disparity
A recent study by Oxfam provided some striking data regarding growing disparities of wealth and poverty within and between countries around the globe:
50% of the world’s wealth is now owned by 1% of the population.
This richest 1% has 65 times as much combined wealth as the bottom 50% of the population.
The world’s richest 85 people control the same amount of wealth as the bottom 50% of the population.
10% of the population controls 86% of all the assets in the world, while the poorest 70% control only 3% of assets.
The amount of wealth hidden in secret tax shelters is estimated to be $18.5 trillion, which exceeds the entire GDP of the richest country on earth (US GDP = $15.8 trillion).
In the US, the richest 1% of the population captured 95% of new wealth generated after the 2007 financial crisis, while the bottom 90% became poorer.
The combined wealth of Europe’s 10 richest people exceeds the total cost of stimulus measures implemented across the EU between 2008 and 2010.
The report goes on to show that these growing income disparities are being seen in most democratic countries today and it attributes this trend to “political capture” – or the control of political institutions by the wealthiest segments of society, who are re-writing national and international laws and policies in ways that serve only their narrow self-interests.
Which raises an important question: what can be done to reverse these trends?
The Oxfam report suggest that “popular politics” – or the political mobilization or poor and working classes in support of progressive taxation as well as investments in education, health, and other public services – will be needed to reverse such trends.
I fully agree that progressive taxation as well as investments in education, health, and other public services are essential. But achieving and sustaining these kinds of advances will require much more than “popular politics.” This is because the underlying problem is, in part, structural.
Western liberal democracies are structured according to the logic of interest-group competition. When governance is organized in this way – as a contest for power – it will always be divisive and dysfunctional at best, oppressive at worst.
For reasons I’ve outlined elsewhere, electoral contests invariably invite the corrupting influence of money; they diminish the inclusion and participation of historically marginalized individuals or groups; they reduce complex issues down to manipulative slogans; and they ignore the well-being of the masses of humanity.
Stated another way, when governance is organized as a contest for power, it will inevitably result in political capture.
Popular political mobilization will, in exceptional historical circumstances, result in temporary advances for the cause of social justice and economic equity. But the long-term trends will continue to be characterized by the concentration of wealth and power in the hands of fewer and fewer people – as the history of the 19th, 20th, and early 21st centuries abundantly demonstrates.
These trends cannot be reversed merely through popular mobilization within current political structures. They will only be truly reversed when the organizing logic of interest-group competition is replaced with a new structural logic, derived from consciousness of the oneness of humanity — or recognition of the organic unity and interdependence of the entire social body.
It is, therefore, toward the cultivation of this consciousness, and the construction of new models of governance that are coherent with it, that we need to bend our energies in the long-term, if we hope to truly reverse the deeply troubling trends identified in the Oxfam report.
Prophecy And Policy
The economic recession is linked to a recession in democracy. If we continue this way, we will be ruined by class warfare and the wrath of global warming. We must seek a different way of living that is based not on maximizing how much we can buy but on maximizing values important to life. True happiness is a transcendent experience, not inherent in material things. Groundswell in grassroots spirituality holds the solution. Countless small actions of unknown people are the foundation for those great moments that ultimately enter the historical record without mention of the people that created them. Change is made in such ways.
Before the 1970’s there was a sense that the US was a socially progressive society, albeit there were setbacks and economic downturns, but most people seemed to believe in a spirit of progress, change, and development that was inherent to the narrative of US life. The despair that characterizes society now is like a burn-out after a long and hard period of endurance after hopes have been dashed and dreams gone unfulfilled. Injustice no longer has promise of resolution in, for example, the manufacturing industry that is facing similar levels of unemployment now as it was in the great depression: back then there was an assumption that honest labor was still fundamental to productivity and so there was general confidence that the market would eventually recover. Unfortunately, policies being crafted now in the US and western Europe enable off-shoring of jobs to foreign countries that lack organized labor unions. This incentivizes the abuse of workers and makes it possible for corporate exploitation to continue indefinitely by hopping around the globe, trading investment capital with countries that agree to deregulate workers rights. Only unification of the entire globe as one nation with one government and the formation of multinational labor unions will be able to stop the assault on masses of helpless workers by globalized capital markets. Hence, unity is the chief steward of achieving justice. The term coherence encompasses the concept of prosperity that is born of justice whose surest means is increasing levels of unity.
Further death blows to US hopes came with the financialization of the economy since the 1970’s. Work is worship is a concept that encompasses the belief that true work, or labor, when performed in a spirit of service to one’s fellow humans, constitutes worship of God and possesses sacred value. With the transition away from a productive economy, in which people once manufactured things of worth to others, the rise of the financial sector and the conversion of profits based on labor to profits earned by manipulating financial systems the demise of the US economy was guaranteed, along with the spirit of service that once animated it.
Before the 1970’s banks simply stored a family’s savings and used the extra funds in the meantime to offer loans to other families to send children to college or mortgage a home. Now banks have become hegemons of the entire financial system that own 60% of the GDP, conducting millions of wire transactions per day that produce no fruit for humankind or society, and manipulating sophisticated stock exchanges and financial packages for personal profit. Concentration of wealth entails concentration of political power. Tax reduction, corporate personhood, and business deregulation ensued. Banks borrow billions from government credit at no interest and loan it to taxpayers for substantial interest rates and profits. They corrupt governments, lobby congress, and distort legislation to their own ends, in a vicious cycle that further deregulates their behaviour.
Unimaginably costly campaigns for elections have driven government politicians deep into the pockets of the corporate sector, corrupting the very structure and function of democracy. Wealth inequality has become extreme in the US with wealth concentrating mainly in the top tenth of 1% of the population: owners of corporations and health systems, elite bankers and big-oil. Extreme disparity in incomes, wealth, and lifestyles is not good for the economy, and creates social unrest. A healthy middle class fuels the consumers who drive economic stability by purchasing necessities and goods lacking negative externalities. The production of necessities in turn ensures job security for many. The real picture is that the poor increasingly are unable to meet basic survival needs and the wealthy increasingly waste the society’s resources on personal entertainment and extravagant past-times. Average wages for workers have not even kept up with inflation over the past 40 years, yet US GDP has doubled in that time, and corporate profits are at an all time high – built on the backs of those uncompensated laborers. The gap between public policy and public will has never been larger. As Abdu’l-Baha explained, wherever you find great poverty, look close and you will find extreme wealth. One cannot be eliminated without the other.
Figure: “Death’s Embrace” – Workers found in the rubble of a factory in Bangladesh after it collapsed. Signs of building collapse prior to the tragedy were sensed by many. Bankers were evacuated from the 1st floor of the building. Workers were told that if they left they would not receive wages for the day. Over one thousand workers were killed due to deregulation of the business sector and lack of worker’s rights.