Increasing inequality of income and assets led to heightened debate in 2014 about structural problems. Recognition that the global economy is not yet in a state of secure recovery since the financial crisis of 2008 raised questions about the type of solutions. While some call for yet another quick fix – “more fiscal stimulation right now”, as Joseph Stiglitz advises1 – others are starting to question the system. Thomas Piketty argued that extreme inequality of wealth is an inevitable consequence of unfettered capitalism, a view hotly contested by some. Standard & Poor’s called extreme income inequality “a drag on long-run economic growth”. Rather, is it time to see the long run of growth as an extreme drag on equality? In this chapter, Jonathon Porritt calls for an end to the “conspiracy of silence” on the matter (see ‘We need to talk about economic growth').
Meanwhile, across the world, the feeling of ‘being left behind’ contributed to the rise of nationalist parties, violence led by fundamentalist factions, and peaceful civil protests calling for democracy, notably Hong Kong’s Umbrella Movement. In the US, there was widespread condemnation of the abuse of power and institutional racism, following the deaths of Michael Brown and Eric Garner at the hands of police officers, and the release of the CIA torture report, which investigated the Bush Administration's human rights violations.
Robert Reich’s film Inequality for All calls for a better understanding of how drivers of inequality fit together and reinforce each other, and invites US citizens to choose manageable actions “towards the structural change our economy needs”. The areas are: raise the minimum wage; strengthen workers’ voices; invest in education; reform Wall Street; fix the tax system; and get big money out of politics.
Another factor driving income inequality in the US is that workers are being left behind by technological change – Standard and Poor’s observes, and points towards education as “an effective way to bring income inequality back to healthy levels”. (The question begs: healthy for whom?) “Over the next five years, if the American workforce completed just one more year of school, the resulting productivity gains could add about $525 billion, or 2.4%, to the level of GDP, relative to the baseline.”2
Is increased productivity the right metric for progress? Or are there more pressing issues to address? To tackle the urgent problems of access to food, safe water, sanitation and energy, we will have to move beyond the siloed thinking of single-country economies and government departments. In 2015, UN negotiators aim to agree and embark on a new set of Sustainable Development Goals. But Dominic White, Head of International Development at WWF-UK, fears global leaders aren’t ready to see the larger context: “We’re talking about a universal development agenda now, getting away from the north–south paradigm ... That’s really uncomfortable for some people because they have to change the way they work and shift their current status and power relations.”
Like Porritt, he is keen to see a more radical shift in the conversation: fewer quick fixes and more focus on shared fundamental ambitions. “There are some basics that governments can’t get beyond, [including] that discourse around economic growth. People struggle to consider that dignity is first and foremost what they’re trying to develop economies towards.”
And what about business in all of this? In the short term, established businesses will likely engage with this issue in a defensive way: to avoid being attacked as a driver of inequality. New legislation means companies now have the option of setting up as benefit corporations, with the purpose of benefiting society as well as their shareholders. The long-term question is whether business could become an instrument of equality, and what civic, social and economic measures could support this.
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Anna Simpsonis Curator of the Futures Centre at Forum for the Future, and Editor of Green Futures: The Long View
Image credit: Flickr / pasuay @ incendo