Why is inequality becoming an issue among our ruling elites and policy makers? Within our ruling elites there is a major debate about the impact that rising social inequality is having on the capitalist social order. Two significant reports published in 2011 by the OECD (Divided we Stand: why income inequality keeps rising) and the World Economic Forum (Global Risks - annual report 2011) point to the issues of inequality that are concerning the ruling classes. (In an interesting aside, I read that the OECD, the premier forum of global capitalist interests, uses the databases established by Thomas Piketty, author of the best selling Capital in the Twenty-First Century) So why are ruling elites concerned about rising inequality? Since the triumph of Thatcher and Reagan in the 1980s, capitalism has been relentlessly pursuing inequality as the model for growth. In the process, vast income disparities in all sectors of society have become the norm. The accumulation of personal wealth far beyond any utilitarian justification for inequality ( eg merit, skill or effort) is accepted, even celebrated. Avarice has become a virtue. Now voices are coming from the very organisations that promoted rising inequality as a growth strategy about the dangers presented by these massive social disparities. The reason why inequality has become an issue among ruling elites is not due to some outburst of moral angst. Inequality at the levels most societies have been experiencing has now become a brake on capitalist growth and productivity. Inequalities at the levels we are experiencing is threatening competitiveness and shrinking consumer markets. There are only so many goods that the rich and the very rich can accumulate and we have clearly reached certain saturation points - how many gold Rolex watches or Lamborghinis can you buy and own? Perhaps most importantly is the threat to the political order that is reflected in the unprecedented rise of disorder and violence in so many parts of the world. In the eyes of many of capitalisms most influential policy makers in places like Europe and China a flattening out of inequality is essential to the maintenance of the long term interests of the capitalist social order. I dont have any illusions about ruling elites. My concern is not to celebrate this turn in the mindset of our rulers but to look coldly at the potential consequences such a turn may have. This emerging consensus among key policy makers is going to have some interesting political consequences. Sections of ruling elites are going to support policies that reduce inequalities in income, education, and health. Global policies could be increasingly skewered to encouraging widespread economic growth in impoverished societies (especially Africa, which has truly vast potential for growth and development . Africa is unquestionably the richest continent on earth whose economic potential in human and natural resources is just waiting to be unlocked). New alliances between among elites, interest groups and political organisations over the policies affecting inequality are going to emerge. That will change the political terrain and affect the way in which arguments and opinions are expressed.
Posted on: Mon, 18 Aug 2014 23:40:11 +0000
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