Something I often hear as a rebuttal to socialism is the idea that socialism seeks to steal from the rich to give to the poor- Robin Hood reincarnated as a political and economic system. Even some socialists themselves see this as their intent and proudly declare so- seeing nothing morally questionable about it. A progressive tax system along with a healthy dose of inheritance tax- signs of a thieving left wing state. Now, if (as my Conservative friend believes is the case) people can earn ludicrous amounts of money without harming anyone else or the environment- if they truly “deserve” this money- then I say go for it and of course such tax policies should be condemned. However. THIS IS ABSOLUTELY NOT TRUE. For starters- there is only so much wealth to go around- so is it really a surprise when we have crippling poverty in African countries, and a diamond encrusted jet flying around billionaires to their next set of champagne and caviar in the U.S? Secondly, logic needs to be deployed- how do we think corporations make gigantic profits year on year and yet the wealth gap widens? Where’s the trickle down theory and where’s the better standard of life for all that capitalism promises? The dreams of continual economic growth fuelled by a totally free market with the wealthiest as the “heroes” and “wealth creators” that is advocated by neo-liberalism is a hollow facade designed to make anyone questioning the excessive wealth and power of corporations look economically illiterate. The narrative of a hard-working individual being able to “earn” unlimited amounts of money is exactly the kind of thinking that results in CEO’s and bankers earn millions in bonus’ whilst the tax payers are bailing them out and it’s exactly the kind of thinking that results in 85 individuals earning the same as half the worlds population.
(Note the year the line starts to go upwards again- who came to power then, and which economic system did they advocate?)
The main justification that tends to drown out attacks on inequality is the idea that insane amounts of money are needed to attract and keep the best talent. Even if it were true that large sums of money were needed for this purpose, if we had never gotten ourselves into the situation where people could expect millions in bonus’ then it wouldn’t be an issue. If the most you could earn for a job anywhere was £100,000, then £100,000 would soon become an attractive sum of money for the best talent and commitment. But apart from that, it’s been shown time and again that money is not the be all and end all when it comes to motivation. For simple, hard, physical or repetitive labour (you know, the kind of jobs that are the most poorly paid) money can be a great motivator, but beyond that money can actually produce worse results, as this video explains: http://www.youtube.com/watch?v=u6XAPnuFjJc. So there goes one of the most commonly used justifications for income inequality- gigantic sums of money do not motivate CEO’s and bankers into doing a better job- a highly replicated study by economists has destroyed this myth once and for all.
Not only is the excessive wealth being thrown at CEO’s and bankers counter-productive and thus bad for the company- it’s also bad for society. The Equality Trust have done some great work on highlighting with numerous studies how a more unequal society suffers in a multitude of ways- from general health to education, to crime rates. The question also needs to be asked about the message being sent out when CEO’s earn more than large swathes of their work forces- that even with their combined utility they are still not as useful as the boss. This is ridiculous- who gives more to this world- the 85 or the 3.5 billion? The disappearance of which would throw the world into social and economic catastrophe?
What makes this situation worse is that when it inevitably fails as a result of not being a sustainable and viable economic system, we’re told that it’s the fault of the poor and they must foot the bill to save the
casinos banks. Over the past 4 years I’ve been outraged by the Tory policies of austerity, bewildered at the audacity and hypocrisy in which their justifications are mired in. But as my political knowledge grows, I realise that this is by no means a special case- progression of neo-liberalistic policies are almost always coupled with cuts to welfare and services for the poorest, world over. These cuts in spending that send the poorest into a spiral of despair and destitution are demanded by the IMF and enforced by right-wing governments in the name of free markets. They are justified as a way of creating a level playing field for all in a global free market. The problem with an open market for a poor country is that it wont be a level playing field- there are other countries that have been in the game much longer and have a constrictive control on the rules- meaning you’re going to be the one that loses out. It is this push towards a global economic system that gives large corporations an unfair advantage, pursued by pushing the poor further into poverty, that is another source of wealth for the richest.
Globalisation also opens the door for the most unscrupulous practices of transnational corporations- externalising costs. When a business externalises a cost, it essentially unloads the cost of an activity to an external source, usually the poor, with a result of increased profit. So what might this look like in reality? It looks like rivers, lakes, and our very air polluted by the worlds biggest corporations not wishing to incur the additional cost of disposing of waste correctly or switching to more eco-friendly practices. It looks like corporations like Wal- Mart running sweat shops in 3rd world countries, and paying its U.S workers such a low wage that the workers have to rely on state subsidies just to get by, all to keep down labour costs and keep up the profit margins. It looks like taking land from small rural farmers in poorer countries to be used for mass production of crops or to build sweat shops on- displacing the poorest and severing their link to their own autonomy and independence, forcing them to turn to work for the corporation for a pittance. These examples are not extreme cases of exploitation of the poor by the rich in the name of profit- they are the norm.
Globalisation also forces countries to have to continually compete to be more attractive for corporations to do business in- in the form of lower taxes and minimum wages- either that or they fund political parties directly to gain influence over party policy. This results in keeping the wages of the poor low and their taxes relatively higher to continue to pay for state spending now the corporations aren’t paying their share. This is a vicious cycle as the lower wages will also force the state more in supporting the poor, thus putting taxes up for the population. All of this serves to create more poverty in poor, and yield higher profits for the rich.
The classic joke goes that a capitalist walks past a mansion and thinks to himself “wow, I want everyone to be able to have one of those”, whereas a socialist walks past and thinks “no-one should be allowed to have one of those” (and maybe ousts the residents and hands the keys over to the state). As a left winger, my response isn’t either of those. My initial thoughts when passing a mansion would be- “how did they get that?”. My actions would be to help pull the workers out from underneath the mansion and give them a room inside it, in place of the homes they lost to the construction of the mansion. A capitalist that truly believes the economic system he advocates can result in everyone having a mansion really doesn’t understand how our world works. We live in a world of finite resources and wealth- not everyone can have the life of those at the top. As soon as you realise that you see a neo-liberalistic capitalist system for what it really is- survival of the fittest. Earning and deserving your money doesn’t come into it, despite what the Tories like to tell us about making work pay. All that matters in our current economic climate is who can grab what.