THE SCOURGE OF INEQUALITY

The representatives of capital descend on the luxury ski resort of Davos for the World Economic Forum and the New Zealand mainstream media suddenly discovers economic inequality.

LAST NIGHT TV3's  six o'clock news bulletin, not known for much other than its daily reaffirmation of the status quo, led with an item about global economic equality. And on TVNZ's Breakfast this morning Rawdon Christie wanted to know what  Labour leader Andrew Little's take was on the issue - although we never did quite discover what Labour would do about it (although I can guess).

'You get the feeling that people are disillusioned with the rock star economy,' commented Christie. Disillusioned? This is a country of persistently high unemployment, stagnant wages and over a quarter of a million children living under the poverty line. People have been struggling for quite some time. I think that it is a bit more than a sudden disillusionment having kicked in. Most of us can deal with a little 'disillusionment', it is quite enough matter altogether when you haven't got enough money for the rent or to put food on the table.

The catalyst for all this media talk on economic inequality has been Oxfam's warning of the widening global inequality gap. The aid agency is trying to put pressure on the wealthy and their political representatives who are gathering at the annual World Economic Forum in Davos, Switzerland. The jamboree starts today. Newsweek reports that 1700 private jets have descended on the luxury Swiss ski resort.

Earlier this month Oxfam released a report that headlined the fact that the richest 85 people in the world are worth more than the poorest 3.5 billion.

Although TV3 and TVNZ may of just realised that there just might be a problem, there is nothing new about this story. Last year I blogged about a report published  by the Credit Suisse Bank that revealed that just 8.4% of all the five billion adults in the world own 83.4% of all household wealth. Indeed Oxfam's own report is based on the Credit Suisse report.

And, in 2010, a United Nations report found virtually the same level of wealth inequality.

The level of economic inequality in New Zealand mirrors what is happening internationally. Max Rashbrooke, the editor of Inequality: A New Zealand Crisis, has pointed out that New Zealand had the developed world's biggest increase in inequality from the mid-1980s to the mid-2000s. The gap has continued to widen since then.

Rashbrooke told TV3's Firstline this morning that "unfortunately the natural tendency of capitalist economies is that you end up with a very small number of people owning  the vast proportion of all the wealth."

What is missing in the mainstream media stories is any recognition that the very economic policies that they continue to support and promote are the very same polices that have benefited the wealthy but have failed everyone else. I found it more than ironic that Radio Live's Duncan Garner took it upon himself to express concern about the level of inequality when, just a few short months ago, he was hailing John Key and his government, for the 'good job' they were doing with the economy.

OECD figures show that economic inequality increased more in the first three years of the financial crisis (2008) to the end of 2010 than in the previous decade.

As it has  been observed by economists and commentators not besotted with neoliberal dogma, it was the wealthy who were protected from the impact of the economic crisis.

The immediate crisis of the banking collapse was resolved by bailing out the bankers with workers’ taxes and welfare payments. The so-called economic ‘recovery’ is being made on the backs of workers’ jobs, real incomes and savage expenditure cuts. 

Yet, in New Zealand, none of the parliamentary parties have anything to offer other  than more market policies. We are lacking an independent and uncompromising party that will represent the interests of ordinary people and promote progressive economic policies that reject the neoliberal consensus that has had a stranglehold on this country for over three decades.

Underlying Oxfam's message, and it is the one that the corporate media are prepared to tentatively approach, is that it is the unfair distribution of wealth that is the problem. It is an argument that has been driven by economists like Thomas Piketty and Paul Krugman.

In New Zealand these arguments are regularly given an airing on Labour friendly websites like The Standard and The Daily Blog.

It is an inadequate argument because it suggests that capitalism is somehow reformable and can benefit us all. All we need to do is jiggle with  the settings a bit. In the case of Andrew Little and the Labour Party, who have already said  they have no intention of 'interfering' with the market, it will be very minor tinkering indeed.

The socialist response is that it is the capitalist mode of production that is the root cause of the vast economic inequality. It makes little sense to just try to treat the symptoms of a failed economic system.

Oxfam's appeal to the 'social conscience' of capitalism, as represented by its functionaries at Davos, has zero chance of succeeding. There will be a load of huffin' and puffin' but, in the end, nothing will happen. It will take a revolution to wrest control of the planet from the clutches of an economic system that has enriched the few, and impoverished the many.