Katherine Trebeck, Global Research Policy Advisor, Oxfam GB
Oxfam and many others have identified inequality as one of the defining challenges of our time.
In January 2014, just in time for Davos, we published a report which highlighted the extent to which a few people have amassed extraordinary wealth – 85 people own as much as the bottom half of the world’s population.
Then in March 2014 we showed that the gap between the rich and poor in the UK has grown in the last 20 years so that now the 5 richest families are wealthier than the poorest 20% of people combined.
And of course these inequalities are mirrored in the labour market. Here we’ve had a rise in in-work poverty and the rise of zero-hour contracts. All at a time bonuses are increasing and corporate surpluses have grown to the extent that big businesses in the UK are sitting on £165 billion – 10% of GDP – in their coffers.
This inequality is a function of cumulative choices over the last few decades that have created an economic model in which:
- Only 12p in every pound of GDP goes to wages in the bottom half of the income distribution
- Business incentives push firms into low wage, low quality, and price competitive services
- The status of financial capital has increased to the extent that the UK is more reliant on financial services than the US, France, Germany or Japan
- There is ever more atomisation of the labour market, paralleled by a decline in collective labour power
- Job quality has polarised
- People have been offered what Roberto Unger calls ‘fake redistribution’ as they maintain consumption levels through personal debt
And the picture in terms of what we’re doing to the planet isn’t much better. For example, globally we’ve transgressed three of the 9 planetary boundaries identified by the Stockholm Resilience Centre. This means we have gone over what earth system scientists specify as a tipping point, beyond which the risk of irreversible environmental change increases dramatically.
The link between the sort of growth we’re pursuing (that is, largely measured by GDP) and what is really important and useful for society is broken.
For example, have a look at GDP in the US compared to the Genuine Progress Indicator (is, income adjusted for ‘bads’ like inequality, environmental damage, unemployment, the cost of commuting; and increased to recognise the value of ‘goods’ such as volunteering and higher education). Since the 1970s the gap between the two widened considerably, yet we were told that these were the good times; the bountiful years; the end of history even.
The Social Progress Index shows a similar severing in any notion of a natural connection between GDP growth and what the Social Progress Indicator team identify as ‘foundations of well-being’. As GDP per capita increases we see a plateauing in attainment of the foundations of well-being.
And in the face of all of this, our communities are encouraged to be more ‘resilient’. But the clue is in the word – in Scots Gaelic, the word for ‘resilience’ is also the same word for long suffering. In other words, resilience is not about trying to focus on and change the pernicious forces that batter us. But instead resilience is about learning to hold our breath longer. ‘Resilience’ demands more of the poorest and most powerless, but does little to change the system which undermines people’s livelihoods.
To Oxfam poverty is about powerlessness. Justice would reconfigure our social institutions in a way that puts power back in the hands of people and communities.
So to challenge the inequality and the political capture that perpetuates it we need to reclaim power in all spaces and in as many ways as we can.
For example, community ownership and collective models of business (such as cooperatives) can help claim some power in market transactions. The power to choose the nature of employment; the power to choose how to share profit; how to invest; who to recruit and what to produce and where.
By joining, up we can exercise power over otherwise impenetrable, remote and monolithic entities. Look at the success of Living Wage campaigns, or the recent disinvestment in fossil fuels by large institutions after lobbying by the public, or the tenacious campaigning on a variety of issues by peasants’ movement La Via Campesina.
This is the sort of re-growth for a new economy that we need after the recession. It shouldn’t be about recovering the old, business as usual model, but instead Building Back Better for an economy that serves the people and planet first and foremost.