Monday, 30 May 2011
The Rich get Richer
Although once an avid watcher, I seldom see Newsnight these days – I find Jeremy Paxman’s style unsuited to our new circumstances under the Coalition government. As a result I missed last night’s ‘Rich Night’.
The summary of the program explains how the limited recovery in the global economy has benefitted the large banks and large corporations whereas, in Alan Greenspan’s words ‘the rest of the economy, small business, small banks, and a very significant amount of the labour force, which is in tragic unemployment, long-term unemployment - that is pulling the economy apart’.
Whereas the UK, and the West generally, has suffered from this global change, China, India and other Asian nations have benefitted lifting ‘hundreds of millions out of absolute poverty and into the middle class’.
The grossly disproportionate share of riches is demonstrated by the fact that in the US ‘between 2002 and 2007, 65% of all income growth went to the top 1% of the population’, this ‘divide has also widened in Britain, Canada, Germany and Scandinavia’. The net result being that there are now a very few super rich and the rest of us - the ‘non-rich’.
Unlike in previous times, ‘John Stuart Mill's complaint about the super-elite of his era - that, like the Duke of Bedford, they grew rich in their sleep' - does not much apply to today's nerdy, workaholic, perpetually jet-lagged plutocrats – apparently in 1916 ‘the richest 1% of Americans received only one-fifth of their income from paid work’ - whereas this has now risen to three-fifths.
The program summary goes on to explain that ‘even the WEF, the premier convener of the global super-elite, is worried that income inequality has grown too extreme’:
'Economic disparity and global governance failures both influence the evolution of many other global risks and inhibit our capacity to respond effectively to them,' the forum's Global Risks report for this year's conference notes.
'In this way, the global risk context in 2011 is defined by a 21 Century paradox: as the world grows together, it is also growing apart.'
The program, presented by Chrystia Freeland, concludes:
'So, here lies the dilemma. In today's hyper competitive global economy we need our super rich and the innovative companies they create more than ever. But they need us too - as consumers, as employees, as fellow citizens.
But here is the lesson of history. In the long run super elites can only survive in one of two ways - by suppressing dissent, or by sharing the wealth.
I know which one I prefer.'
My own view is that the powerful seldom give up this heady drug willingly - it usually has to be prised from their grip by force, as we are seeing in Egypt and other north African nations today - we are lucky to live in a democracy where this can be achieved through the ballot box.