Home > Uncategorized > The inequality gap — five sickening facts

The inequality gap — five sickening facts

from Lars Syll

1 140120171906-davos-income-inequality-oxfam-international-winnie-byanima-intv-00011911-story-topJust eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity. Although some of them have earned their fortune through talent or hard work, over half the world’s billionaires either inherited their wealth or accumulated it through industries prone to corruption and cronyism.

2 Seven out of 10 people live in a country that has seen a rise in inequality in the last 30 years.

3 The richest are accumulating wealth at such an astonishing rate that the world could see its first trillionaire in just 25 years. So, you would need to spend $1 million every day for 2738 years to spend $1 trillion.

4 Extreme inequality across the globe is having a tremendous impact on women’s lives. Employed women, who face high levels of discrimination in the work place, and take on a disproportionate amount of unpaid care work often find themselves at the bottom of the pile. On current trends, it will take 170 years for women to be paid the same as men.

5 Corporate tax dodging costs poor countries at least $100 billion every year. This is enough money to provide an education for the 124 million children who aren’t in school and prevent the deaths of at least six million children thanks to health care services.

Oxfam

  1. Paul Davdson
    January 22, 2017 at 5:41 pm

    In the GT Keynes noted that the two major faults of the capitalist monetary system was(1) its failure to provide full employment and (2)its arbitrary and inequitable distribution of income and wealth.

    Most of the General Theory is devoted to curing fault (1)- the cure will go to reducing the inequality problem. The second fault Keynes believed could be cured — in a closed economy– bya progressive income tax.

    for an open economy the bottom of page 338 as a small comment on heling to relieve these faults — but in his essay on Self Sufficiency Keynes has a more appropriate comment regarding the problem of outsourcing of mass production factory jobs in an open economy contributing to both faults -and what we should do about it.

  2. January 23, 2017 at 2:42 am

    A hypothetical: Person wearing a mask pins you to the wall in a subway station, puts a gun in your ribs, and demands all your money. What do you do? Same response to those who rob you with rigged elections, tax policy, and un- under-employment. So how do you respond?

  3. dmf
    January 23, 2017 at 3:00 am

    no debating that things are grim, for folks in the biz
    http://felix.kinja.com/a-response-to-oxfam-on-its-wealth-statistics-1791357422

    • January 23, 2017 at 8:41 am

      This article makes some valid and important points. But the question still needs to be asked, isn’t extreme wealth and extreme poverty a direct attack on not just US democracy but also the historical moral guidelines of the US? According to 2009 numbers from the IRS on the 400 richest individual income tax returns, the real runaway growth in wealth has come from capital gains. In the last years of the bubble, the “Fortunate 400” made nearly half their income from capital gains (i.e., profit from the rising value of an investment, such as stocks or property) and less than 10% of their income from old-fashioned wages. The average income of a top-400 earner grew by 650% between 1992 and 2007 to a whopping $344 million. Over that time, the average salary barely doubled. But the average capital gains haul increased by 1,200%. How do the richest get richer? Not from their wages. From their investments. Except for investments via retirement accounts and other mutual investments most Americans simply do not have the disposable income for significant stock or property investments. This is a systemic problem that has prevented many Americans from accumulating wealth since the founding of the nation. It’s also one of the reasons the US became and continues to be a frontier society. And why speculation in land and killing off Native Americans (along with the Buffalo) is a common part of US culture. These are the things that concern me about great wealth inequality in the US.

      • robert locke
        January 23, 2017 at 10:28 am

        “How do the richest get richer? Not from their wages. From their investments”

        Not from investments, Ken, but from a casino capitalist financial system that promotes rapid increases in stock market values through IPOs.

      • dmf
        January 23, 2017 at 1:30 pm

        me too, as I said quite grim just thought the technical questions might be of interest here.

      • January 24, 2017 at 4:13 am

        Robert, casino capitalist investments are still investments. With the casino capitalism element the return is probably higher than it would be otherwise. Investments have been the key to wealth in the US since 1870.

        dmf, grim is an appropriate and accurate word here.

      • robert locke
        January 24, 2017 at 2:46 pm

        There is a lot of difference between the returns on investments I make in a firm that rewards me with a 10% profit each year, and a firm (Facebook) that makes very little money, but makes a young man in his 20ies a multibillionaire because of financial manipulation that casino capitalism provides.

      • January 25, 2017 at 5:47 am

        Robert, I agree that investment manipulation can and does have great impacts on wealth distribution. Every time a private company creates an IPO to go public, the owners of that company may become wealthy; sometimes very wealthy. Do we take away that opportunity? It’s easy enough with tax laws, copy right laws, patent laws, etc. to do just that. What is the correct balance and how do we decide. I’m in favor of limits on such quick, extensive personal wealth. But I don’t think you to penalize too heavily the process of wealth creation through long-term investments with reasonable returns.

      • robert locke
        January 25, 2017 at 11:51 am

        The problem seems to lie not in long term investments that create reasonable returns, but in raising capital on stockmakets. Germany and Japan did not rely on stockmarkets to industrialize.

      • January 26, 2017 at 6:28 am

        Robert, we’re on the same page about stock markets. The US uses them extensively. After all, in America everybody wants to own a little piece of a silver mine, a new factory, or the next big car thing.

  4. Rhonda Kovac
    January 23, 2017 at 9:44 am

    I would like to put in a word for revising our terminology. Wealth ‘Inequality’ — differences in the quantity of wealth among different people — is not the issue. Theft of wealth is — wealth going to someone that should have gone to someone else. Using a term like “Wealth Theft” instead of “Wealth Inequality”, would not only be more effective in engaging the public to solve the problem, it also more accurately represents the true issue at hand.

    • January 24, 2017 at 4:19 am

      In what sense do you use “theft” here? Obviously, in most situations investors don’t mug people on the street. It’s figuring out to whom wealth legitimately belongs that interests me. Investors have a theory on this. As do labor unions. And scientists. And so do politicians. And bringing up the tail of the list, economists certainly believe they have the best and fairest theory on this. Who’s theory are we to use?

  5. patrick newman
    January 23, 2017 at 12:09 pm

    As I sometimes have to remind myself the poverty and inequality dimension needs to include the range and quality of universality and availability of public services like health and education. It is important that to modify the effects of the operation of the free market as an engine of inequality public services free at the point of use are available.

    • January 24, 2017 at 4:25 am

      I agree. My question is why use markets at all if they lead to unfair and unequal results; sometimes extremely unfair and unequal. I’ve argued elsewhere that capitalism is not only superfluous but actually harmful where functional democracy exists. Democracy can assure that businesses can operate and earn a fair profit, that private property is protected, and that creativity and inventiveness are encouraged and protected.

  6. January 23, 2017 at 1:19 pm

    I seen it as a kind of dependence, where poor masses have got interlocked. So long as the bottom tail fail to stand on its foot collectively, things will never go on right direction. Even in presence of democracy as it is called namely, you can not witness a change. Now economies are working on a complex structure, where everyone unconsciously works for the elite class and that too joyfully.

    • January 24, 2017 at 4:43 am

      The dependence is both intentional and utilitarian. It is one means used to control the poor. In the words of “Boss” Tweed, half the poor can always be hired to kill the other half. In other words, the poor depend on the jobs given them by the wealthy to survive. That includes killing their neighbors. This is not, has never been unconscious. Talk with an actual poor person. Each knows s/he is being manipulated and taken advantage of for nefarious purposes. None of them beneficial or even useful to the poor person. These strategies have now been “brought into the 21st century.’ Now it is debt (credit card, auto loans, home loans) through which the poor are controlled by the wealthy. The other 21st century refinement is a twist on a 19th century strategy. Control over who gets housing (a place to live) and who does not. In the 19th and even early 20th century people were simply evicted till they either died or complied, whichever was the goal in each particular case. In the late 20th and 21st centuries, people receive housing assistance to keep their home or apartment, but must take on 2nd, 3rd, and 4th lowing paying part-time jobs to continue this assistance. Creating an employment sector made up more and more of low-paying part-time jobs.

      • January 24, 2017 at 2:43 pm

        ” In the words of “Boss” Tweed, half the poor can always be hired to kill the other half”.

        That sounds like Polanyi quoting Townsend in ‘The Great Transformation’ p. 117/8. about the stock put on Robinson Crusoe’s island.

        I don’t want to disagree with any of the above. May I perhaps add the thought that money acts like a mathematical variable, representing whatever value is appropriate, so it allows freedom of choice in exchange. Living, the availability of necessary resources and the stability of monetary values during transactions are not optional, which takes us back to Polanyi’s point about fictitious markets in labour, land and money, and the need to organise supply of these rationally.

      • January 25, 2017 at 6:19 am

        Dave, there was nothing “natural” about poverty or the poor of Tweed’s New York. The poor were made and kept poor by the intentions of both government and private citizens who used that poverty to serve their needs and plans. The movement out of poverty when it happened was slow and difficult. Often made more difficult intentionally. Although there were regular contacts between Tweed and influential members of the poor.

        One of the theories about how democracy is supposed to function, popular with the founders of the US is that voting and other democratic privileges should be held only by property owners. The purpose of democratic arrangements is to provide the opportunity for all to acquire property and thus democratic privileges like voting. In other words, democracy is intended to stop the rich and powerful from interfering in this process. This is a political and emotional process and certainly not a series of “rational” transactions. One of the reasons that armed conflict and combat are often required to secure the goal. Money is just one measure of the rewards of democracy and democratic participation. Its value is set, or is assumed to be set by those who are qualified to participate in the democratic process. Obviously, this version of democracy is not operating today in the US. But none of the other versions seem to be operating either.

      • January 25, 2017 at 8:25 pm

        So Tweed’s poor were made poor (and probably less populous) like Townsend’s sheep were made less populous by the Spanish setting dogs on them. That’s a very rational imitation of Nature’s way of controlling populations.

        So you wanted to drown out what I was saying about money as a mathematical variable and governing international trade by rational agreements rather than in fictitious markets? May I draw your attention again to the Guidelines for Comments here:

        • Engage with the arguments of the post and of your fellow discussants.
        • Try not to flood discussion threads with only your comments.

      • January 26, 2017 at 6:15 am

        I agree with David Attenborough on this “natural” relationship. For example, Attenborough argues famine in Ethiopia is about “too many people for too little piece of land.” There’s no nature here. Rather, it’s a relationship between number of people on a piece of land and the food that can be grown on just that piece of land. No outside help. In other words, the UN can’t show up with extra food. Extend this to all the land and all the people. My point, this natural relationship is complex.

        I wasn’t trying to drown out anything. I was simply disagreeing with you. Money is not a mathematical variable (except in adding up currency) and it doesn’t govern international trade by rational agreements. These are governed by political and emotional commitments. I admit that humans imagine all the time that they are rational. And they commit to this belief emotionally and politically. Humans have three things going for them: 1) imagination; 2) political and emotional understanding and commitment; 3) adaptability. From these humans create lots of things to survive. Rationality, mathematics, economics, markets, government, etc. Some work well. Others fail miserably.

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