Posts Tagged ‘inequality’

Thomas Piketty on Capital in the Twenty-first Century

June 9, 2015

French economist Thomas Piketty, author of Capital in the Twenty-First Century, is of the view that in the long run the return on capital is greater than economic growth. If that be true then we have a mass transfer of wealth from the poor to the rich.

In Sacred EconomicsCharles Eisenstein  is of the view that the owners of capital in a system of usury, capital must accumulate to the owners of capital. With the implication we must have endless growth.

Read any classic literature, Charles Dickens Jane Austen, people invested their capital and lived off the interest, they did not need to work for a living, they could do as they wished all they needed was an allowance. Only those without any capital, without an allowance, were forced to work, for example as a governess.

Wealth inequality is always a lot worse than income inequality.

Neither situation is good, inequality and a wrecked planet.

During periods of growth, the poor see their wages increase, and do not notice the accumulation of wealth by the rich. During periods of zero growth, as we see now, the poor see their wages stagnate if not decrease, they then notice the level of inequality,and if the level of inequality is large and growing, have social unrest if not insurrection.

In a sharing society, gift economy, there is not an accumulation of wealth because the emphasis is on giving, sharing, not accumulating.

Russell Brand on Democracy Now

November 16, 2014

The full interview can be found at Democracy Now.

Wealth of America’s top 0.1% is about to exceed that of bottom 90%

November 12, 2014

We are facing the top 0.1% having as much as the bottom 90%.

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Every generation needs a new Revolution. — Thomas Jefferson

The top 10% having as much as the bottom 90% would be bad enough. The top 1% having as much as as the bottom 90% even worse. We are facing the top 0.1% having as much as the bottom 90%.

The wealth distribution is even more shocking if we compare the top 1% with the bottom 90% (look at the bars at the top of each graph).

Click on each graph to pull it up for closer scrutiny.

If monkeys are treated unfairly, one getting a greater reward than another they get very angry.

If children in a playground, one grabs all the toys, do we stand idly by? No, we intervene, we reprimand the greedy child, we redistribute the toys.

Why then do we stand idly by when the rich are so greedy? Why are there not riots in the streets?

The rich fear riots. More security guards employed in USA than High School teachers. London Mayor Boris has bought German water canon, but not (yet) got the authorisation to deploy.

Can we crowd fund a People’s Water Canon and use to defend the People’s Revolution?

With most things, we are satiated, we know when we have had enough. We eat a meal, we push the plate to one side when we have eaten our fill.

Money is the exception, we are never satiated, the more we have, the more we want.

When the Rachman Benyon Brothers bought the New Era Estate in Hoxton, an estate built in the 1930s to provide affordable housing, their first act was to jack up the rents. Ninety two families are facing eviction, as they will not be able to afford to pay the new rents, more in some cases than their salary.

Austerity is not working, but then it was never intended to work. It was an excuse for Shock Doctrine, slash and burn of public services, cuts to benefits, closure of public libraries, privatisation of the health service, bedroom tax. It is all part of the transfer of wealth from the poor to the rich.

Speaking to the CBI, David Cameron has promised more austerity, more cuts. His clones, Nick Clegg and Ed Miliband have promised more of the same, whatever the Tories cut, they can cut better.

Only the Green Party are offering a genuine alternative, which is why they are barred from any discussion. Austerity is not inevitable, there are alternatives, but is is edited out of existence by the mainstream political-media establishment.

Where was Ed Miliband when activists occupied Parliament Square in solidarity with activists on the streets of Hong Kong?

The fastest growing party in Spain is Podemos, they have grown out of Occupy, they are grass roots, anti-austerity, unlike the main parties, they are not owned by Big Businesses.

In the US, whoever wins an election, is whoever spends the most money.

Why bother with an election, why not let accountants declare the winner?

And yet, if we look at USA, beyond the midterm elections, at what other measures people voted for, they voted for anti-austerity measures, measures to benefit the environment, measures to benefit people.

When Barack Obama rode into town on a wave of popularity, it was followed by six wasted years. The banks were broke, the car companies were broke. Instead of bailing them out with public money, they should have been broken up, public-controlled companies put in their place, companies that were fulfilling a useful purpose. Instead public money was thrown at them and it was business as usual.

Growth has flat lined for years, real wages have flat lined for years. A magnifying glass is taken out to magnify statistical noise and claim, we have growth. Statistical noise on wages, claimed to be a growth in wages. But who does it include, exclude the bankers, greedy property developers, and average wages are not increasing.

Jobs are increasing, but not well paid, skilled jobs, jobs you can take a pride in. The jobs that are increasing are the part-time, temporary, de-skilled, zero-hours McJobs. Jobs that rob the soul.

We are told we are all in it together.

Are we all in it together when Environment Secretary Eric Pickles spends (or to be correct we spend on his behalf) £500,000 on new limousines in three years?

Eighty five people, the richest on the planet, who could easily fit in a double-decker bus, have as much wealth as the poorest half of humanity.

Public intervention is heretical, the free market must reign, unless it is transferring public money to the banks, then the dogma, public bad private good, the arbitary, set in stone, there is no alternative, can be broken.

And yet we do have rules, we do have public intervention. We have international trade rules, international trade treaties, for example NAFTA, overseen by WTO, which transfers power from the public sector to the private sector, from sovereign governments to global corporations.

Currently TTIP, which will result in a massive transfer of power from sovereign governments to global corporations is being negotiated in secret.

Apart from it being unfair, transference of wealth from the poor to the rich, it is also trashing the planet rendering it uninhabitable.

Which brings me back to my original question, why do we tolerate it, why is there not revolution?

Also posted on Medium.

Trickle down does not work

September 1, 2014
Greed is the religion of the billionaire  class

Greed is the religion of the billionaire class

No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. — Franklin D Roosevelt (1933, Statement on National Industrial Recovery Act)

The first TED talk by venture capitalist and entrepreneur Nick Hanauer was banned by TED. It was claimed to be mediocre. Could it be because he told the truth? It also raises a big question mark against TED.

Forbes published a garbage piece, which I will not even lower myself to address, in which it was claimed, not mediocre, but a display of ignorance.

A couple of weeks ago, the French Economics Minister told the truth on failed French economics policy, austerity, tax breaks for the rich, cuts for the poor. The reaction of the unpopular French President (20% approval rating) was to fire the entire government. Should it not be the President who resigned?

Across southern Europe, austerity is not working.

Pay the rich more and they work harder. Pay the poor less and they work harder. Strange that.

We have seen wages flat line for nearly a decade, ever since the economic crisis hit, wages were not much better before. If we take account of inflation, then wages have gone down.

When productivity goes up, we either need fewer people or we need to consume more.

If we increase productivity year on year, such that after ten years, productivity had doubled, we are either producing twice as much stuff with the same number of people or half the number of people are required to produce the same amount of stuff.

Stuff in general we do not want or need, stuff that has environmental costs of extraction, manufacture, shipping and distribution, stuff that we possess for six months, stuff that then has to be disposed of, incurring yet further environmental costs. These externalised costs, which are not reflected in purchase price, we all pay for.

The rich do not create jobs for the simple reason there is a limit to the amount of money they can spend, how many yachts, mansions, luxury cars.

Quantitative easing has been a massive failure, for the simple reason it has gone to the bankers and the rich.

We need wealth redistribution, but the reason why we do not have wealth redistribution, is because we would be redistributing the wealth of the rich, and they being rich and powerful own the politicians.

Had money been given to the poor, they would have, if only because they are living on the breadline, spent that money in the economy.

We need higher minimum wage, better welfare payments, free health care, free higher education. All of which benefit everyone, but disproportionately benefit the poor.

We also need progressive taxation where the rich pay a higher rate of tax, not as we have at present a regressive taxation system, where the rich pay less tax than the poor, where a banker in the City of London pays less tax than the cleaner who cleans his office.

We need to hit hard, the tax-dodgers.

We need to move away from a tax on personal income, to a tax on corporations, a tax on resource depletion, a tax on waste generation, a tax on pollution.

Too many are currently getting a free ride. When the rich dodge tax, they are getting a free ride. When corporations externalise their costs, pollute our air water, destroy our natural resources, exploit the poor, they are getting a free ride

At a recent meeting at Davos, Bill Gates, one of the richest men on the planet, argued vociferously for not increasing minimum wage.

The prevailing theory is trickle down. The poor sit below the rich man’s table, and if they are lucky, a few crumbs fall off the table.

At times of growth, everyone sees an increase, the rich a lot, the poor a little, but that little, is enough to keep the poor oppressed.

When there is zero growth the rich still get fatter, leaving less of the pie for the rest of us.

During the recession, there has not been the mass layoffs we have seen in the past. That is because productivity has gone down, there is a lowering of demand, the workers still employed are put on short shifts, reduced hours, paid less. One reason why wages are shrinking.

There has been a increase in jobs, but these have been McJobs, mind-numbing de-skilled, low-wages, part time, temporary, zero hours jobs.

The wealth creators, the job creators, are the small companies, the ones who do not have the political clout.

The big companies destroy jobs. Each time they destroy jobs, their share price rises, more for me, less for you.

Wages at Walmart, McDonald’s are so low, they have to be subsidised by the state. Yet another mechanism to transfer wealth from the poor to the rich. Companies that argue they cannot remain in businesses without paying low wages, do not deserve to remain in businesses.

There is though a flaw in the argument put forward by Nick Hanauer, that of continued growth.

The society Nick Hanauer describes has been true for some time, certainly the post war period when we saw real growth, car manufactures for example, would pride themselves that they paid their workers a decent wage, such that they could afford the cars they made. This is no longer true.

The reason it is no longer true, is that we have hit the limits of growth. Banks have been criticised for not lending to businesses, but when banks are looking for a return of 10% or more, they are not going to lend when the economy is not growing.

We have exhausted what we can loot from the commons then sell back.

Nick Hanauer hints but no more, at the gift economy. He dismisses the rationale actor, out to maximise self interest, more for me is less for you, and says we are irrational, emotional, that we reciprocate.

An economy where we reciprocate is the gift economy, the sharing economy, where we all contribute to the commons, more for me becomes more for you.

He is also compares the economy with an ecosystem, where we have closed loops, feedback. On a finite planet, an economic system, has to be embedded within the planetary ecosystem, a part of Gaia, not apart from Gaia.

We cannot have unlimited growth, unlimited growth is where a cell becomes cancerous.

We are moving increasingly towards a Police State, in a crude attempt to maintain inequality.

Why has the Mayor of London decided he needs water cannon on the streets of London? You do not need water cannon for happy people?

Nick Hanauer was one of the first private investors in Amazon, he co-founded a company which was sold to MicroSoft for $6.4 billions, he together with his friends owns a bank. He has his own yacht, a private plane. He was co-author of The Gardens of Democracy. He was also instrumental in pushing for an increase in the minimum wage in Seattle.

Income inequality in the UK

June 26, 2014

The UK is one of the most unequal countries in the developed world. The gap between pay at the top and bottom is huge. Living standards for everyone – apart from those at the very top – remain squeezed. But it does not have to be.

Cup for the rich, scraps for the poor

May 27, 2014
Cup for the rich, scraps for the poor

Cup for the rich, scraps for the poor

The money Brazil has squandered on the Word Cup could have gone on infrastructure to benefit everyone, especially the poor.

Painting by Paul Ito.

The rich get richer

May 19, 2014
Sunday Times Rich List

Sunday Times Rich List

We are all in it together.

Er, not quite.

Whilst the majority of people have seen income shrink over the last five years, the richest individuals and families have seen their wealth double over the last five years. The richest now account for one third of GDP.

Levels of inequality, not seen since Victorian times.


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