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2018 – a year for confronting looming threats.

Climate Change (Con?). Crowcombe Al. flickr cc.

Astonishing the scientific world, human remains have been found in Israel, dating back some 200,000 years, far older than any other human remains found outside Africa. It appears our human ancestry is more complex than we believed.

But what of our human future? Where will human beings be in 200,000 years? Will we have survived at all? And what will the world look like? Will there be forests, animals, and wildlife, or will our earth be as barren and bare as the moon?

These are not idle thoughts, since critical for our future are decisions we make now about addressing climate change, developing sustainable economies and planetary systems, eliminating war, and ensuring peaceful networks of governance, not just in thousands of years, but for the children and grandchildren of our generation.

Alarm bells about threats to human wellbeing have been ringing furiously for some decades, though many are deaf to them, or refuse to hear them. But a growing chorus of voices around the world is demanding these warnings be taken very seriously.

Pope Francis has been one of these voices, and in Peru and Chile in January, he reiterated his pleas of his 2015 letter, Laudato Si’, to take urgent action to avoid catastrophic climate change, to improve the quality of life for everyone in programs around the UN Sustainable Development Goals, to protect human rights, particularly for indigenous peoples, and to reshape our economies to increase fairness and equity.

Growing inequality is proving to be a serious threat to social order and political stability, even in western democracies. Austerity policies in Europe and elsewhere are provoking nationalist and populist movements, while President Trump is damaging the framework of international relations by withdrawing from the Paris Agreement on climate change, UNESCO, and the Trans Pacific Partnership, and by his erratic leadership.

Sharp increase in inequality in Australia

These are also burning issues for Australia as well, but one of the great impediments to renewal of our social policies comes from the mindset deriving from the philosophy of neoliberalism that the market provides the best mechanism to solve these issues, and that the state need only play a minimal regulatory role, leaving individuals to act ‘rationally’ to maximise their self-interest.

Under the influence of this mindset, in Australia, we are witnessing the results in growing inequality between the rich and poor. According to a new report from Oxfam Australia, Growing Gulf between Work & Wealth, the top 1% of Australians owns more wealth than the bottom 70%. Credit Suisse data indicates that the wealth of the top 1% grew to 23% of total wealth in 2017. The number of billionaires in Australia has grown from 14 in 2008 to 33 in 2017, with their combined wealth increasing by 140% to $115.4 billion.

Over the same period, despite strong growth in productivity, the wages of most Australians are barely keeping pace with inflation, while average household wealth grew by just 12%. Far from our national mythology of being an egalitarian society, recent OECD data ranked Australia at 22nd out of 35 OECD countries in terms of economic equality.

Neoliberalism as the driver of inequality

Driving increasing inequality is the economic philosophy of neoliberalism. As the Irish President Michael D Higgins said in a major address in Ireland on 21 November 2017, Restoring Social Cohesion: a Project for 2018 and beyond, the polarisation in western societies and economies is not “the result of the inevitable laws of history or economics”, but of a fundamentalist economic ideology termed neoliberalism that concentrates wealth and power in the hands of a few.

Higgins said that the new system “was refounded upon the principles of international capital mobility and financial deregulation, based on the assumption and assertion that private financial institutions would ensure the most efficient distribution of resources internationally” and discipline wayward governments. The extraordinary growth of the finance sector effectively transferred “accountability and power from the democratic state to the market, and specifically the new financial conglomerates”.

Higgins argues that economics must serve society and the wellbeing of everyone, not just of an elite. He insists that the foundation thinkers of modern economics like Adam Smith conceived of markets as founded on justice and ethics, whereby self-interest of individuals did not replace sympathy for others and commitment to the common wellbeing of society. He quoted the late economist, Kenneth Arrow: “We can take it for granted that for society to operate at all, and to function successfully in any sense, we must have an ethical code, that is, some sense of justice”, including concern for others.

Power of special interests

Joesph Stiglitz on Inequality. citizens4taxjustice. flickr cc.

President Trump appears closely allied with certain corporate interests in the United States, and his tax policies pander to them. As Joseph Stiglitz wrote in Project Syndicate on 2 January, Trump’s tax legislation will give individuals temporary tax cuts, while corporations will gain permanent cuts. Most of the tax cuts will go to corporations and the very rich. The fiscal deficit will grow much larger than the current estimate of $1-1.5 trillion, and protectionist trade policies will damage manufacturing. “Once again (as he has done with health care and the tax cuts), Trump is betraying his core supporters”. Growing economic inequality continues to corrode US democracy, as the rich have captured almost all the GDP gains of the past quarter-century. (See also Stiglitz’s address, How to Rewrite the Rules of Globalization).

James K Galbraith considers Trump’s tax cuts could have a one-time effect of raising US annual GDP by almost one percent, but increasing taxes on the middle classes would cause consumer demand to fall, resulting in a “vast upward redistribution of income and wealth”. The US auguries are not at all good.

Time is short if the world is to reduce inequality significantly, revive social cohesion, and renew commitment to develop economic policies which genuinely serve societies and universal human wellbeing. Each year of inaction now may cost us dearly in the future.

Fortunately, in many parts of the world, people are finding new ways ahead. Geoff Lacey describes in this newsletter the scope of a new cooperative in the Catalan region of Spain.

Professor Paul Smyth in his address at the SPC public forum on 5 December 2017 gave an incisive analysis of our current predicament in Australia and what needs to change to develop inclusiveness and sustainability in society. You can view his talk on YouTube.

 

 

Posted by on Jan 29 2018. Filed under Church and Social Justice, Economic issues, Feature, Recent articles by SPC members. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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