Politics of Inequality: Are we ready for 2035?
Who should do what to make sure we mitigate the negative developments that the world will be facing in 2035?
We live in a world with finite resources and infinite needs. The 20th century saw an unprecedented economic expansion in the western hemisphere fuelled by technological innovation and capitalist mode of production. This was followed by mass-scale consumerism which could be sustained via supply-side economics and growth of full-time employment. The end of the last century also witnessed the emergence of major growth and consumption centers in resource-rich middle east and China. The world of 2035 will bear the weight of this past economic growth. My biggest concern for 2035 is a world from South Asia to Africa striving to become middle-income economies (rightly so) and try to reach the consumption levels in current day developed economies. Can our planet afford every earthling consuming like a European citizen? The economist in me disagrees. And it only gets worse. Finance led capitalism and its underlying fragility has made economies more exposed to the crisis. The massive expansion in working poverty and hollowing out of the middle class is no more a trend limited to the developing world.
Since the 1980s, wealth is concentrated in the hands of the better off, while the middle classes see their situation stagnate or deteriorate. Even the advanced economies like the US and Germany too are facing the threats of social exclusion and precarious work. The economic growth achieved in various emerging markets from Indonesia to Brazil has failed to trickle down due to rising income and wealth inequality. The threat of global warming is rising across the planet in the form of natural disasters and a negative impact on agriculture production. The unequal distribution of assets means that people are more worried about their family and country’s ability to deal with upcoming climate emergency. The fear has taken over hope for our future generations. The politics of hate and xenophobia threatens our society and global solidarity. Our objective should be to make strategies in order to combat the expansion of inequality in education, employment, gender, and political rights. This is a global issue that requires transnational solidarity between the government and the local population.
There is no single strategy to deal with this challenge. But, we can bracket the set of strategies into a twofold approach: individual and socio-political. For the individual, self-reliance and moderation are the keywords. Consumerism is unsustainable. Moderation alone can ensure our peaceful and equitable existence. This requires an active role on the part of parents and teachers so that our future generations learn the importance of sustainable development at an early age. It gets trickier when we come to the dynamics of the socio-political approach. Since countries belong to different levels of socio-economic development and social justice, there can be no single “model” or “one size fits all” approach. Since politics is permeated with power relations, the multidimensionality of inequality has a central role in the stability and instability of political regimes.
Thus, fighting inequality is also beneficial for the economy, social cohesion, the health of the population, and for democratic life. The necessary condition to do is revisiting our political choices and revising our public policies. There is a need to strengthen the social state so that it considers risks (like environment) beyond the risks traditionally covered by social security. To reduce inequalities, whether social or environmental, it is essential to improve tax progressivity. Economic research has theoretically and empirically demonstrated that progressive taxation is an effective tool to fight against social and environmental inequalities. The toolkit should also include the elimination of fossil fuel subsidies, whose financial surplus would be reallocated to social protection and increase public investment in priority sectors. Here, the role of civil society and trade unions is very crucial. The initiatives aimed at reducing social and environmental inequalities must develop at the local level, driven by solidarity movements. These efforts should utilize international frameworks like Sustainable Development Goals (SDGs) to promote the Social-ecological state.
The message is clear: less inequality for more sustainable growth. A core risk to these efforts comes from the large multinational corporations, particularly GAFAM (Google, Apple, Facebook, Amazon, Microsoft) that have acquired considerable monopoly powers. The decline in inequality that occurred until the 1980s attests to the vitality with which societies are able to question existing power relations. Many paths remain to be explored to combat inequality. The rise in inequality is not inevitable if equality of opportunity could be reinstated.
