The Inequality Funnel
CAPITALISM, 3 Nov 2014
Roberto Sansón Mizrahi, OpinionSur – TRANSCEND Media Service
Inequality of power (economic, political, media, judiciary, repressive) operates as some kind of funnel that, permanently, extracts and concentrates wealth and incomes in the hands of a minimal fraction of the global population. It is worth analyzing how and why the inequality funnel is generated and the diversity of measures available to dismantle it.
It is irrefutable that concentration of wealth and incomes has grown unrestrainedly in the world and, in several cases, also at the local level. Uncountable documents evidence it, including articles and books published by Opinion Sur. It is sufficient to point out that, according to data gathered by OXFAM, almost half the global wealth is in the hands of merely 1% of the population. The 85 wealthiest individuals in the world have as much wealth as 3570 million people, half the planet’s population. [1]
It is impossible to accumulate such wealth with one’s own effort; it is achieved by extracting value that others have generated. The sufferings and frustrations caused have been enormous and have given way to countless social reactions that, if for some reason were to become coordinated, their nature and scale would be hard to anticipate.
How such inequality is generated
The process of value extraction is materialized though diverse mechanisms, among others, the following: (i) The unbridled financial speculation that financial entities and hedge funds exercise which is sustained by manipulating regulators and conditioning public policies in their favor, in addition to exercising an irresponsible risk and privileged information management.
(ii) Extortive conditions transnational corporations impose upon weak nations and/or corrupt governments regarding the exploitation of natural resources (mining, forests, fishing, aquifers);
(iii) Value extraction by large multinational corporations that as oligopolies control export channels and use triangulations and other artifices to evade taxes and maximize profit margins.
(iv) Extraction of value by imposing abusive prices while having a dominant position in imperfect markets (monopolies, oligopolies), whether it is in production or commercialization, through which they get extraordinary profits at the expense of those who are abused.
(v) Extraction of value by avoiding paying taxes which promotes capital flight and restricts the State’s capacity to provide social and productive infrastructure.
(vi) Extraction of value through drugs, arms and people trafficking;
(vii) Extraction of value that local speculators exercise by appropriating assets in a vulnerable situation or forcefully imposing their sale at a vile price through illegal means;
(viii) Extraction of value by capitalizing in one’s own benefit the results of public investments without taking responsibility for the corresponding improvements contribution;
(ix) Extraction of value by taking advantage of discriminatory regulation favoritism;
What is the process of value extraction and concentration based on
A process of the scale of value extraction and concentration prevailing in almost the entire world is sustained in the unequal power that certain minority groups of the global population have come to hold. Historical reasons are combined with the contemporary globalization of the economy to explain the differences in terms of power, power in whose core are large financial groups but that spreads over sectors of the political system and media seeking to manipulate public opinion in their favor. At an ideological and value level hegemonic groups finance strategic think tanks that are aligned with them and prevent the transformation of educational systems that today reinforce values and attitudes functional to their interests. Moreover, they keep as reinsurances of their preeminence legal regulations that favor them, layers of the Judiciary that are eager to defend their privileges and, ultimately, decisive influence on the State’s repressive capacity.
How to dismantle the inequality funnel
Dismantling the hegemonic power that sustains the wealth concentration process is not simple. It demands acting coordinately in several dimensions for which it is necessary to count with people-based governments capable of changing the economic system’s course and way of functioning. A decisive element is for people to have the transformational will, which implies elucidation and mobilization. This process of understanding what goes on, not just what is apparent but the entire network of interests that are not made explicit, demands unmasking intentions and maneuvers of those who have the capacity to shape public opinion against people’s interests. Since understanding is influenced by the values we practice and the ideologies we adopt, we need to take a closer look at the values guiding our behavior differentiating ethical orientations (that can be confirmed or adjusted) from the interests sustaining privileges that get to us encrypted in values and emotions.
This way, for example, there are values such as greed and selfishness that, unless they are decisively fought against, end up guiding the behavior of a large diversity of actors, causing severe social effects. Something similar would happen if neglecting others, if indifference towards vulnerable sectors prevailed within us and if our own interest were all that mattered. The passive acceptance of ill-gotten privileges, undermining common wellbeing, justice and equity, constitute ideological features that serve as support for economic concentration.
It is critical to face this ideological-cultural struggle by deploying transformational economic, social and political strategies. Strategies that would include, among many other, the following issues.
Dismantling one by one the aforementioned value extraction mechanisms reorienting towards the establishment of better societies the enormous amount of energy that is today sterilized through those means.
Replacing the mystification of ‘the markets’ that, openly or covertly, reinforce privileges of minority sectors, with explicit decisions made by full democracies capable of aligning interests, needs and emotions in favor of the common wellbeing.
Particularly, regulating the distributive struggle for which it will be necessary to exercise the democratic power of intervening in setting distributive goals, as well as in the promotion of organic growth that will serve as support to a vigorous inclusive development.
Unequivocally establishing the right to access goods and services that will allow everyone to live a decent life.
Significantly improving political representativeness and the experience of agreements enriched by a diversity of perspectives.
Ensuring the democratization of media and the Judiciary.
Building a transformational education that will strengthen one’s own understanding and promote responsible and selfless actions. It is possible to overcome the inequality funnel and it is imperative to do so. Materializing or deepening transformations has never been simple and, nevertheless, is an effort that societies have faced since ancient times. Today that challenge is renewed in a scenario that has become global and in which a single action, that before only had local impact, now affects and influences elsewhere. Transforming towards sustainability, equity, justice, generosity, solidarity, making progress in significance and meaning, is the planet’s calling. Enriched in diversities, it involves us all.
Footnote:
[1] http://opinionsur.org.ar/WORKING-FOR-THE-FEW-Political?lang=en.
______________________________________
Roberto Sansón Mizrahi, economista, planificador urbano regional, co-editor de Opinión Sur, autor de artículos, columnas periodísticas y libros, el último de los cuales se titula Un País para Todos de la Colección Opinión Sur. Es fundador de Sur Norte Inversión y Desarrollo, South North Development Initiative y Grupo Esquel. Consultor en países de América Latina y de Africa en temas de desarrollo sustentable, asistencia a pequeñas y micro empresas, movilización productiva de la base de la pirámide social, desarrollo local, estrategias para abatir desigualdad y pobreza.
Go to Original – opinionsur.org.ar
DISCLAIMER: The statements, views and opinions expressed in pieces republished here are solely those of the authors and do not necessarily represent those of TMS. In accordance with title 17 U.S.C. section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. TMS has no affiliation whatsoever with the originator of this article nor is TMS endorsed or sponsored by the originator. “GO TO ORIGINAL” links are provided as a convenience to our readers and allow for verification of authenticity. However, as originating pages are often updated by their originating host sites, the versions posted may not match the versions our readers view when clicking the “GO TO ORIGINAL” links. This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.