What can be done to fight inequality?


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The explosion in information available about the extent of inequality in the world naturally raises the next question – what can be done to combat it.

The right wing appears to have given up the argument that this is simply the natural order of things that we all will benefit from eventually. The ‘trickle-down’ theories have simply been demolished by life.

Major economic institutions like the IMF that defended the policies that accentuated the growth in inequality over recent decades have shifted course. They now issue reports arguing that too much inequality hinders economic growth.

IMF Managing Director Christine Lagarde summarised their conclusions in a speech last year: “You do not have to be an altruist to support policies that lift the incomes of the poor and the middle class. Everybody will benefit from these policies, because they are essential to generate higher, more inclusive, and more sustainable growth,” Lagarde declared. “In other words, if you want to see more durable growth, you need to generate more equitable growth.”

The IMF policies haven’t actually changed very much at all. But they claim they will lead to more equitable outcomes for some reason that is not clear to me.

More traditional social-democratic ideas for modest wealth redistribution are now being resurrected as a necessary step to “save capitalism from itself” to use the words of one prominent advocate Robert Reich in the US.

Essentially this involves ending tax havens, increasing some taxes on the very rich, breaking up the big banks and expanding social protections. The more radical of them argue for nationalisation of the big banks and a Universal Basic Income (UBI) to protect the poor.

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The current leader of the UK Labour party was elected on an anti-austerity programme by arguing for many of these ideas. Similarly the candidacy of Bernie Sanders for the Democratic party nomination in the US presidential election has received huge support by arguing for a radical redistribution of wealth and power in US society.

I think we need to support any measure that seeks to put taxes on the wealthy few and remove them from labour which (along with nature) is the source of all wealth creation in society.

But so long as we have have a competitive, dog-eat-dog capitalist system then the tendency to centralise and concentrate wealth will continue with irresistible force that ultimately will overcome all barriers that governments try and establish.

Capitalism is also a system of commodity production for sale at a profit. There are simply too many linkages in that process that can go wrong for the system to escape its tendency towards crisis. And the longer the system survives the greater those threats become. Today the global economy remains at risk of a renewed global recession/depression without really recovering from the worst crisis to hit the system since the 1930s. The system of production for profit also threatens the ultimate source of life itself – mother earth.

Because the system is based on production of commodities for sale the capitalists do not actually care who buys their product. The worker can buy food to eat, the professional can buy a house, the capitalist can buy a private jet. The capitalist can also buy buildings and raw materials for expanded production. That is why I don’t buy into the “Left Keynesian” arguments that it is simply not enough demand from workers that creates problems for capitalism. Expanding workers wages to purchase the products of capitalists is not a “solution” if it reduces middle class purchases or capitalist investments. Higher wages also ultimately impact on the rate of profit which is a key barometer of capitalist health.

There is also a conservative argument in favour of the Universal Basic Income that is essentially along these lines. The pro-capitalist supporters like Reich see it as necessary to maintain incomes of the working class poor who have lost higher paying industrial jobs that and have been thrust into a more precarious existence juggling several minimum wage, part time service jobs to survive. They essentially accept that there is nothing much that can be done to prevent that. But we can minimise its impact by having the State pay a UBI that can maintain a consumer market for capitalism among the poor. In this world view the capitalists are free to eliminate as many jobs as they like with the new technologies that are becoming available so long as we have a UBI to prevent complete destitution. Some like New Zealand’s own Gareth Morgan argue that you don’t need a minimum wage with a UBI.

I support a UBI for different reasons. I agree that it is important to protect people from the ravages of capitalism as much as possible. This includes socialised health care and education as a right. Welfare is needed for people who are sick or invalided in some way. Living allowances are needed while in tertiary study. Pensions are needed for the elderly. A UBI is a simple and effective way to do all of that with the least cost and without punitive barriers or stigma associated with access.

In addition I believe a UBI will strengthen workers bargaining power with their bosses – both at an individual level and collectively. An individual is more able tell an abusive boss to just stick it if they have access to means of support till they find another job. Collectively workers can more readily afford to strike for improvements as well if they have this available as of right.

This will also strengthen workers position to challenge the precarious existence being imposed on us rather than accepting it as somehow an inevitable consequence of technological development.

Capitalism will continue to produce a world of instability for working people so long as it exists. It can only be replaced by the collective action of the big majority of the population acting together to create a new society.

That new society will take democratic ownership control of the finance system and the major monopolies and use that control to lead investments according to a democratic plan.

Before that day arrives there will be a contest of power within capitalism.

Working people need to fight for demands that can expands their power and make it easier to resist what capitalism wants to impose.

Demands to reduce inequality that are simply abstract appeals to the rich and powerful to wake up and do the right thing are simply a waste of time. The ruling elite does not care that they are destroying humanity and the planet.

The left needs to popularise a programme for political, economic and social changes that empower people as much as possible. That begins with strengthening unions and their bargaining power.

It means forcing business to pay a living wage. The minimum wage should be set at two-thirds of the average wage as it once was in this country. Zero hour contracts should be outlawed. Overtime rates should be mandatory after six hours a day or 30 hours a week. Unions should have the right to enter workplaces for recruitment in paid time. Annual leave should be extended to six weeks. These measure would radically “pre-distribute” income and wealth in a progressive manner rather than wait for a government to redistribute later. Workers should have the absolute right to strike to get a contract, to enforce a contract, and in solidarity with other workers in struggle.

We should also be looking at ways to empower people in their own communities. The examples of real “peoples power” seen in recent upheavals in Egypt, Spain, Greece, the Occupy Movement, Wisconsin, and many others show that people want forms of more direct democracy rather than simply voting every three of four years for someone to misrepresent them.

We should be looking to create our own media, culture and sport rather than leave everything in the hands of big business.

We should be learning the positive and negative lessons from heroic attempts being made in Latin America (especially Bolivia and Venezuela) to use governmental power to confront imperialism and empower workers, farmers and indigenous communities in a new and creative way for what they call a 21st Century socialism.

Any measure to break up the monopoly powers of big business should be supported. Any measure to socialise control of finance and investment should be supported. Any measure to tax wealth not labour should be supported. Any measure to democratise access to the media should be supported. All measures to expand access health and education as of right free of charge must be supported.

But at all times we must explain that these are only transitional measures.

They are designed to protect the big majority by progressively taking power our of the hands of a small minority of super rich parasites.

They are not designed to make the system work in our interests. That is a naive and utopian dream. Many of the measure proposed will in fact undermine one of the key elements of the capitalist system which is production for profit. If the capitalists fear they may not be able to make as big a profit as they desire they will use their economic power to resist. The government of Venezuela has been victim to precisely this type of sabotage with hoarding of goods, investment strikes and so on.

Only a government willing to mobilise the power of working people to take economic power out of the hands of the capitalists can actually succeed.

That is the lesson of the Syriza government in Greece. Despite being elected on a radical anti-capitalist programme to transform Greece the central leaders were unwilling to take power out of the hands of the Greek capitalists and their European backers.

Only when we have a government with the courage and understanding to do what is needed by any means necessary will have the beginnings of a socialist society. Only then will we be able to guarantee work, education, health care and creative pursuits as of right to become a fully developed human being able to live at peace with nature.


  1. ” What can be done to fight inequality? ”

    Go in strike.

    If your labour is filling their coffers unreasonably then stop working for them. What, about that, is rocket science?

    Why do you think ‘they’ deregulated the trade unions? Do you think that by them selling off our services and assets they not only made billions but they also made us significantly more insecure, therefore more easy to control. Why do you think the Dark Siders have psychologically programmed our farmers into thinking they’re free and independent to live as miserable and as insecure lives as our particular Dark Siders require?

    I dare, I double dare, any politician to court farmers over and into a work-force Union in conjunction with their agricultural, down – stream service providers.

    Andrew Little would rather eagerly hack his left foot off, barbecue it, then eat it without Dodgy Watties tomato sauce than moot that particular scenario.
    A united workforce welded to our primary industry secured by peer to peer lending when times get tough. There. Done. I’ve just fixed all of NZ’s social and economic woes and tribulations. And who am I ? A dummy, just like you. Imagine what clever bastards are getting away with?

  2. Delaying the inevitable is exactly what we need. In 60-100 years technology will hopefully be sufficiently advanced that we will be able to solve demographic crisis.

    • I put a rider on this stage2omega posting as more in-depth research has shown that Iceland debt forgiveness was on the table in January 2012 and mortgages were thereafter written down but not off. A full debt write-off would require firstly currency revaluation and thereafter the announcement of NESARA.

    • There is a rider attached to the first comment above (not yet up) and this comment was posted again by mistake. Sorry.

  3. Thank you Mike, your formula for a path to a workers’ paradise sounds absolutely ghastly. Good luck with finding followers.

    Compulsion is a very blunt weapon which should be kept in the cupboard until all else fails.

    Think more about what a worthwhile society looks like before you devise ways to settle old scores.

    Old “Socialist” Bernie is all about attacking the undue effects of privilege
    and making the trappings of an adequate income: good education, housing, health, freely available. This is how you improve lifestyles, not just by forcing some wage hikes on employers who will simply pass on the increases to their customers without improving the situation for more than a few months.

    Free education, health care etc should be universal (this is way more efficient than means testing) counterbalanced by a return to a more progressive tax on incomes, but also taxes on transnational corporations at income point, wealth, inheritance and capital gains.

    An over emphasis on what is provided (in income or even material benefit) at the expense of how it is provided (ie who pays) is entirely to get the cart in front of the horse.

    I doubt that Gareth Morgan plans to shoulder the main burden of his UBI “generosity”. (UBI, by the way is little different from a minimum wage, extended to beneficiaries: in the hands of a Ruth Richardson or even John Key it would inevitably end up as the latest bench mark for penury). Nor are the dream a “the-workers-are the-only-source-of-wealth” atavist going to provide more than a distraction. Let’s try to keep it real, people.

  4. Gustavo Caldas · 1 hour ago
    ” There are several ways to solve the economic nightmare the West and New Zealand is in ,but they must be applied TOGETHER ,and enforced permanently :
    1) A debt forgiveness Jubilee for people in the bottom 75% (in income)
    2)An upper limit to the assets an individual can own. No more than one house, end property speculation. Don’t enrich Australian banks lending money to finance an insane property bubble that robs everyone blind except the speculators! And robs the economy of disposable income turning families into mortgage serfs for life.
    3) Money must be issued by a government controlled kiwi bank, not by private banks,and the issuance must be regulated with the goal of achieving a steady state economy. No property bubbles or inflation.
    4) Disgorgement by the top 10% of the assets that exceed the upper limit of wealth allowed to individuals.Can you hear the howls of outrage?
    These changes would mean the end of Capitalism,a system that is NOT WORKING anymore ,except for the top 1%. ”

    Also the end of inequality! Can you see that happening here with the likes of Shonkey and Dunny running the show? In your dreams mate! Also Labour who are doing nicely thanks with the current setup.

  5. ‘We should be looking to create our own media..rather than leave everything in the hands of big business. ‘

    gee..!..wouldn’t it be cool if there was someone curating/collating/linking to ‘progressive’ (for want of a better word) local and international stories/viewpoints/arguments..?..each and every day..?

    ..that would be guaranteed of lots of support from the left/progressive ‘community/’gatekeepers”..(for want of better words..)

    ..wouldn’t it..?

  6. Underneath it all is a finite planet.

    Once upon a time exploitation was ‘cheap’; ‘other people’ paid the various costs, both immediate and long term.

    Now the familiar ingredients are not so readily available and our technologies haven’t kept up with our collective greeds and yearnings. We still find ways to do the same old – fracking, not drilling. Gouging out more soil and creating weird ecologies. No one Important is conserving topsoil and water resources – yet.

    For decades we’ve created a noxious little mythology around ‘baby bumps’ and ‘breeder’ payments of various kinds.
    Could our successive governments hurry up and work out we are neither filling factories nor platoons and battallions? Fewer people, dummies. Fewer!

    And basing ‘pensions’ on the consumptive habits of the pre-pension cohorts is downright silly because many scarcity-minded folk get twitchy about paying any sort of living allowance to ‘unproductive’ people. The least possible to eke out an existence while prices rise based on what the median can pay.

    What game/s will we play when this final round of Monopoly is finished? People made it. People allowed it. People can change it. And start recognising WHEN to change it (before the same people keep on winning and sour all the other players).

    And don’t count on any permutation of ‘government’ to stand as protectors: ask the folk in Flint, Michigan how well their local government protected them from hazardous levels of lead in their municipal water supply…

    Time for a different game.

  7. Good stuff Mike! I fully support you with your suggestions.
    We are living through the collapse of the capitalist system and they are fighting as hard as they can to maintain the structure that creates their wealth. TPPA is one example of the ways they are trying to prevent the people from being able to make the changes that are needed if we want to prevent runaway climate change and social inequality. The ones that currently have it all don’t want to think about the consequences of what they are doing to the world, they just want to hang on to their wealth at any cost.
    All of us that have a vision of a better world for everyone must join together to fight back. They are powerful and we are at the start of a huge change for the world but we all have our part to play.
    Thanks for putting it out there Mike!!

  8. Good stuff Mike! I fully support you with your suggestions.
    We are living through the collapse of the capitalist system and they are fighting as hard as they can to maintain the structure that creates their wealth. TPPA is one example of the ways they are trying to prevent the people from being able to make the changes that are needed if we want to prevent runaway climate change and social inequality. The ones that currently have it all don’t want to think about the consequences of what they are doing to the world, they just want to hang on to their wealth at any cost.
    All of us that have a vision of a better world for everyone must join together to fight back. They are powerful and we are at the start of a huge change for the world but we all have our part to play.
    Thanks for putting it out there Mike!!

  9. My recipe for fighting poverty and inequality is for the children of those less well off to work hard at school, get good results then take out a student loan to obtain a qualification which will gain entry into a valued trade or profession. Along the way take no drugs nor commit criminal offences.

    It certainly worked for me!

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