Global Concerns - 3 - Inequality & Powerlessness

“What kind of economy grows for decades on end but doesn’t allow most of the population to share in the gains from that growth ?” – Mark Weisbrot

“We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” – Former US Supreme Court Justice Louis Brandeis

1. The main 'engine' of the biggest global concerns is the extreme and undemocratic concentration of global political and economic power in the hands of a few. The misuse of this extremely unequal power is having a very bad effect on the whole world. This is getting much worse, and more quickly than you may realise.

2. KEY POINT : The real political and economic power in the world is held by a tiny irresponsible elite - around 1% of 1% (i.e. one ten thousandth) of the global population. These are the leaders of 'Neoliberal Capitalism', also known as 'Casino Capitalism' or 'Disaster Capitalism' : the extremely wealthy, those at the top of the financial markets, the leaders of corporations, and their friends in politics and the media. The USA is the 'Holy Land' of neoliberal capitalism. The systemic global inequality in money and power is vast. It drives all other inequalities and many of the global concerns outlined here on this website.

Some Indicators of Inequality

3. Here are some of the many figures showing the extreme state of economic inequality in the world. Oxfam published (in December 2016) shocking new evidence of an inequality crisis that is out of control. This is a lengthy quote from their Briefing Paper : "Oxfam has calculated that :

(a) In 2015, just 62 individuals had the same wealth as 3.6 billion people – the bottom half of humanity. This figure is down from 388 individuals as recently as 2010.

(b) The wealth of the richest 62 people has risen by 44% in the five years since 2010 – that's an increase of more than half a trillion dollars ($542bn), to $1.76trillion.

(c) Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same period – a drop of 41%.

(d) Since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth, while half of that increase has gone to the top 1%.

(e) The average annual income of the poorest 10% of people in the world has risen by less than $3 each year in almost a quarter of a century. Their daily income has risen by less than a single cent every year.

To give this a sense of perspective : Just 3% of U.S. military spending could eliminate starvation on earth.

Growing economic inequality is bad for us all – it undermines development, growth, social cohesion and peace. The consequences for the world’s poorest people are particularly severe.

Apologists for the status quo claim that concern about inequality is driven by ‘politics of envy’. They often cite the reduction in the number of people living in extreme poverty as proof that inequality is not a major problem. But this is to miss the point. As an organization that exists to tackle poverty, Oxfam is unequivocal in welcoming the fantastic progress that has helped to halve the number of people living below the extreme poverty line between 1990 and 2010. Yet had inequality within countries not grown during that period, an extra 200 million people would have escaped poverty. That could have risen to 700 million had poor people benefited more than the rich from economic growth." (Oxfam, Briefing Paper : 'An Economy for the 1% - How Privilege and Power in the Economy Can Drive Extreme Inequality and How This Can Be Stopped'. January 2017)

4. Continuing with our list of Indicators of Inequality, the next are mostly about the USA, the world's leading exporter of 'Casino Capitalism' and 'Disaster Capitalism' and the home of 'market fundamentalism :

(f) Five American men own almost as much wealth as half the world's nearly 7 billion population.

(g) The world's richest 1% now have more wealth than the rest of the world combined.

(h) In the eight years since the last global recession the Wilshire Total Market valuation (widely accepted as the definitive benchmark of the value of the US equity market) has more than tripled, rising from a little over $8 trillion to nearly $25 trillion. The great majority of it has gone to the very richest Americans.

(i) In 2016 alone, the richest 1% of Americans effectively shifted nearly $4 trillion in wealth away from the rest of the nation to themselves, with nearly half of the wealth transfer ($1.94 trillion) coming from the USA's poorest 90% - the middle and lower classes. That's over $17,000 in housing and savings per lower-to-middle-class household lost to the super-rich.

(j) In late 2017 the three richest Americans own more wealth than the bottom 50 percent of the population (158 million people). Meanwhile Trump's administration has announced it intends to slash taxes on the wealthy and corporations while cutting programs that help low-income and middle class Americans.

In 2017, while most Americans and much of the world's press and media, were fixating on Trump, America's super-rich continued to abscond with their nation's wealth, and - as shown by Oxfam - the plague of extreme inequality continued to grow across the world.

Neoliberal Economics is Not Just Damaging Democracies...

5. The centuries-long 'progress' of democracy is being undone by this economic and political elite who, over recent decades, have taken over whole economies under the guise of 'neoliberalism' and 'free trade'. With the help of international bodies (see paragraph 8 below), this means that the global economy is now based upon a totally ungovernable international finance system, at the centre of which is a global free market in capital, assets and resources. This system is also known as 'Casino Capitalism' or 'Disaster Capitalism'. In 2007/8 this highly unstable global financial system collapsed - basically because major financial institutions (Banks, financial traders, ratings agencies, etc) were deceiving their customers, financial regulators, and each other on a colossal scale. That has severely damaged many societies and seriously increased inequality.

6. In response to this global recession (instead of tackling the banks, the financial sector, corporates and tax avoiders who are causing all these massive problems) their friends in politics have forced citizens at large to pay hundreds of $billions to bail out banks across the world. This neoliberal elite have also worked with their friends in governments around the world to arrange vast tax avoidance schemes and thousands of legal loopholes to benefit themselves. As a result, inequality has been increasing rapidly since the Reagan and Thatcher governments came to power in the U.S.A (1978) and the U.K (1979). Since the global financial crisis in 2007-8 inequality has increased far more quickly than ever before.

7. Citizens in numerous countries are also suffering the reduction or loss of hard-won public services
under the false ideology of 'Austerity', introduced by neoliberal politicians to avoid tackling the real causes and culprits. So, the neoliberals in politics and corporations have thereby halted social progress and forced economies into reverse. This has damaged society-wide assets such as health, education and welfare for the poor and the disadvantaged. The damage continues.

...Its Now Dismantling Democracy Altogether...

8. This global elite have for many years been going far beyond this - and they are actively supported by their friends in politics. This is all being actively supported, enabled and facilitated by the United Nations, World Trade Organisation, International Monetary Fund, the European Union and ASEAN (for Asia) all of whose policies promote extreme capitalism in its various forms. For example, they are facilitating international Trade Deals which enable corporations to sue governments of countries which have laws or regulations that might inhibit corporate profit-making in any way. They can sue governments for any loss of profits or even for the loss of 'expected' future profits.

9. So, laws, regulations and policies that have taken centuries and decades of struggle to achieve (e.g. in occupational health and safety, food safety laws, farm pesticide controls, controls on genetically modified (GM) ingredients, employment laws, the environment, pharmaceuticals, banking and financial regulations, etc) - all of these measures can be overridden by special Courts. Governments (i.e. we the citizens) will have to pay $billions to the corporates each time its claimed that any of these measures might cause them 'losses'.

10. The development of these trade deals are so secret that even legislators (in the U.S. and the Europe Union for instance) cannot find out what is in these Deals, and governments are not publicising their content to citizens. Using this deliberate secrecy, the corporates have enough support among politicians to ensure that these Trade Deals will almost certainly pass into law in the U.S. and the European Union, and many other parts of the world.

11. This forces whole populations into completely new levels of powerlessness. Not only will citizens be powerless to change this in future but so will their elected politicians, especially in the world's foremost neoliberal countries : the U.S.A. and U.K, who are both pushing these Trade deals through using as much secrecy as possible.

12. We also lose our hard-won public services, because these Trade Deals force them to be opened up to private corporations to run - according to their own LOW STANDARDS, for their own HIGH PROFITS. Numerous legal actions by corporates against governments are already taking place in regions of the world where these Trade deals have already been introduced. These legal cases are heard in special international Courts packed with corporate lawyers and judges, completely outside of any country's normal Justice system. So, they are outside of any country's democratic or government controls.

...Its Dog-eat-dog In a Global Race to the Bottom

13. These Trade deals are designed to not just undermine democratic government, but to dismantle and destroy it. They are placing key economic and political decisions outside of democratic controls. They are removing workers and citizens rights, dismantling laws vital to the welfare of societies, and sidelining our own Courts systems. So, they are accelerating the global 'race to the bottom' among nations, in order to boost the profits of large corporations and the finance sector.

14. These Trade deals are moving the whole of the world's population (except for the extremely wealthy) towards acute powerlessness. Those governments around the world who have never given workers rights, never accepted human rights standards, never established protective laws, never raised the quality of life of their populations, who have the cheapest labour available on the world market are the 'models' towards which we are all being moved. The corporations and financial institutions love these weak governments.

15. Such weak countries are already receiving many contracts from corporations and jobs are being lost in developed countries to economies with cheap labour, where workers have few rights and live in extreme poverty. Of course, corporations love these economies. Welcome to the global 'free' market ! Free for corporations - but at great cost to all the rest of us, the other 99.99% of the global population.

16. As far as inequality is concerned, in the U.S.A. (the world's richest country and along with the U.K., the main proponent of 'Casino Capitalism' and these secret global Trade deals), inequality is colossal. As we saw above, in one year alone (2016) the richest 1% of Americans effectively shifted nearly $4 trillion in wealth away from the rest of the nation to themselves, with nearly half of the wealth transfer ($1.94 trillion) coming from the USA's poorest 90% - the middle and lower classes. That was in just one year ! Outside of the few richest countries extreme inequality is getting worse. The poor are the vast majority of the world's population, so extreme poverty and powerlessness are already their norms. Most societies around the world - even if they do not know it - are racing to join them at the bottom of the poverty ladder. Poverty is a result of political actions, choices and policies. Poverty is definitely political !

17. The majority of the world's ordinary citizens (especially women, poor people and other marginalised groups, such as the unemployed and the homeless) are largely
excluded from political and economic decisions that directly affect their lives. Their human rights do not matter at all to the wealthy and powerful elites who already control whole economies undemocratically through corporate power. In many parts of the world these wealthy elites also fund, control and direct the political parties, politicians, political processes, press and media. The new global Trade deals are spreading and embedding this as the global model for all our societies.

NOTE : Between communist and capitalist countries the patterns of poverty, powerlessness and lack of human rights may be different, but the problems caused by both systems are profound.

Powerlessness in Action - Example : Nigeria

18. To show how this already works in a practical way (even before these Trade deals) to make millions of people powerless, here is one example from Africa. This shows how
a western corporation (Shell Oil), in concert with corruption and bad governance, has made life hell for millions of people over several decades in the Niger Delta of Nigeria. This example of how people are made powerless by state-corporate collaboration can be multiplied many times in many forms around the world.