JUST EIGHT men own the same amount of wealth as the poorest half of the world. That’s the shameful finding of the recently released Oxfam Report January 2017, 'An Economy for the 99%'.
The evidence of mounting global economic inequality within and between nations is stark and convincing:
- Since 2015, the richest 1% has owned more wealth than the rest of the planet.
- A FTSE-100 CEO earns as much in a year as 10,000 people in working in garment factories in Bangladesh.
- In the U.S., new research by economist Thomas Piketty shows that, over the last 30 years, the growth in the incomes of the bottom 50% has been zero, whereas incomes of the top 1% have grown 300%.
- In Vietnam, the country’s richest man earns more in a day than the poorest person earns in 10 years.
"The Oxfam report directly sheets home
blame for what has occurred since
the early 1980s to the dominant
economic influence of neoliberalism."
How did we get to this point? The Oxfam report directly sheets home blame for what has occurred since the early 1980s to the dominant economic influence of neoliberalism. According to Oxfam’s analysis, the cause of so much inequality lies with large corporations and the super-rich.
‘Far from trickling down, income and wealth are being sucked upwards at an alarming rate.'
President Obama told the UN General Assembly in his departing speech in September 2016:
"A world where 1% of humanity controls as much wealth as the bottom 99% will never be stable."
Some very unpalatable assumptions
Neoliberalism is an extreme economic ideology.
A rapacious form of capitalism, for the few and not the many, it operates on some very unpalatable assumptions:
- Shareholders profits are to be maximised at the expense of other legitimate stakeholders.
- Workers’ wages and conditions are to be relentlessly suppressed.
- The financial interests of suppliers and consumers are to be minimised when market dominance permits.
- Societal need is to be ignored through aggressive avoidance of government taxation.
- The resources and benefits of the common wealth are to be grasped wherever possible, especially the resources of the natural environment.
- Government is viewed as a target for continual lobby to enact those market rules that benefit wealthy owners and investors.
The most offensive assumption of all
Yet perhaps the most demeaning assumption in the neoliberal worldview is that individual people deserve and merit, in both a moral and economic sense, exactly what they are able to make from the market. Moral worth and social standing are equated with a person’s income or net value.
The corollary of this assumption is that poorer people who struggle to sustain themselves and their dependents are “undeserving”, “losers” or “leaners”. Such descriptions are not only offensive. They are used to justify existing inequalities on the grounds that the market is always “right”.
Of course, the assumption that prosperity equals inherent worth is nonsense when you consider that:
- Pay levels and relativities can be a lottery, totally unsupported by reliable or objective methodology. A multiplicity of factors besides productivity or value creation determines the recompense any individual happens to receive. Such extraneous factors include gender, class, ethnicity, age, work sector profitably, country of birth, postcode, respective bargaining power and even chance. And then there is the example of the payment ratio of U.S. CEOs to average workers. It was 303:1 in 2014 (Washington Economic Policy Institute).
- Few people would argue that unearned income generated from inherited wealth is as meritorious as that from the labour of poorer citizens. Yet neoliberal advocates consistently support tax-preferential treatment of income from capital over income from labour.
- The fallacy of equating income and prosperity with personal worth and merit is most dramatically illustrated at the lower levels of the economic spectrum. People with disabilities can easily find themselves excluded from paid work. Are these individuals to be judged for random life events and circumstances well beyond their control? Similarly, job-excluded informal carers toil long and hard in an unpaid capacity to support highly dependent family members or friends, who are frail aged or have serious illnesses or disabilities. In doing this unpaid duty, they saved the Australia public purse an estimated $60.3 billion in replacement costs in 2015 (Deloitte Access Economics). Even the often vilified unemployed on “below poverty-line” Newstart and Youth Allowances are usually facing circumstances beyond their immediate control or choice. The punitive Liberal-National Party Government is fully aware of the baseline ABS statistics of the job market, namely, that the number of job vacancies available is vastly exceeded by the number of the unemployed and underemployed (such as those seeking more paid hours).
There is no place for hasty moral judgments on the “worthiness” of those in such difficult economic circumstances.
Over the last three and more decades, neoliberalism has delivered for the privileged few. The Oxfam report calls for an economy that will also benefit the 99%, not just the 1%.
Human worth and merit must not be defined by the market, but by the universal dignity of all men and women and their right to a just share of opportunities and basic material well-being.
The economy ultimately serves humanity, not the reverse.
Michael Clanchy is a management and policy development consultant and has authored books including Good Bosses, Bad Bosses: Surviving at Work. Publishers of his feature articles include the BRW, The Age, The Brisbane Courier Mail and The West Australian.
Mike Kelly (BSW, BA, Melb.) is a former manager of social policy and CEO within the not-for-profit sector community services sector, with extensive experience as a manager and regional planner in the Victorian public sector.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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