The “Parties” Are Enjoyed by the Wealthy, Not by Popular Sectors
ECONOMICS, 4 Mar 2019
21 Feb 2019 – Many countries apply adjustment policies arguing that the State generated a “party” spending income it did not have, which produced serious imbalances. This proposition conceals perverse situations: the “party,” if there was one, was enjoyed by large corporations and wealthy families. Popular sectors obtained rights that are now being lost with the adjustment; if they did receive something, there were breadcrumbs compared with the enormous increases in wealth, the usufruct of those who generated such “parties.” Let us be clear: if there were parties, they were just for some; the rest has been submitted to an unbridle process of concentration of wealth and, with that, decisional power as well.
Fiscal deficit was presented as the contemporary evil factor. It seems that all the plagues that overwhelm humanity emerged from there: that is why the neoliberal crusade points its spears towards abating such deficit. What is whisked away from popular knowledge is the nature of the deficit, for which it is critical to understand why it exists, how it is produced, and in which way it is addressed. It is not useful just to point out the magnitude of the fiscal deficit but rather it is necessary also to analyze the composition of public income and spending and, particularly important, who are being squeezed out to finance it.
When analyzing public spending, it is possible to ascertain that part of it favors wealthy groups and people who do not need to be subsidized by the State because they can finance those works or services with their own resources. Simply, they grab that part of public spending imposing their profit over the needs of popular sectors and they succeed in that using their political power.
Another important part of public spending is destined to cancel off interests and amortizations on debts whose legitimacy is dubious. Sovereign debt contracted to enable wealthy sectors to sustain concentration while maximizing their profit.
If we review the magnitude of income that should have been collected but was not, it becomes explicit the large fiscal evasion and capital flight towards other jurisdictions, especially, fiscal havens. It is not about lack of resources but rather that, the wealthy elude their tax responsibility. To make matters worse, there are not a few or minor cases of large debts contracted by powerful economic groups with the State that were graciously condoned instead of collected.
With expenses captured by economic power that could have been reoriented to cover popular needs and revitalize the base of the productive apparatus, with condoned debts from those same groups, with income not materialized due to evasion and capital flight, with onerous amortizations of sovereign debt, some of it illegitimate, we should not be surprised by serious fiscal deficits. In addition, there are other complementary reasons, in terms of inefficiency or negligence by those who manage public resources that must be corrected firmly.
The largest ignominy and fragrant inequality is that instead of addressing what generates fiscal deficit, economic and political forces that control countries impose policies against medium and popular sectors, the large majority of our societies. On the one side, they maintain and deepen the regressive tax system that implies unloading the tax burden onto those who have the least instead of increasing corporations and wealthy families’ taxes. Moreover, prices of essential utilities (electricity, gas, water, and transportation) increase up to extortive levels, at the same time that prices of consumer goods and rents overshoot. The dynamic thus generated brutally punishes medium and popular sectors, what results in an impious and relentless transfer of income to concentrated sectors erected as steering wheels of the economic order and societies’ course which they help fracture.
Therefore, tremendous spirals of economic, social, judicial and environmental destruction appear. Faced with such debacle, governments affine with dominant groups ever more resort to sovereign indebtedness, trying to expand without significant changes the onerous status quo. Cycle over cycle the repayment capacity is surpassed progressively. The creditor mafia first imposes usury rates and then definitely closes the faucet on new loans. Countries surrender their decisional sovereignty, auction valuable assets, and deepen adjustment policies while drainage and transfer of resources continue from those who have the least to those who have the most and from a country towards international financial centers.
To maintain the privilege of the few, a suicidal course has been imposed on us, where no exit is on sight. We will have to see if they always manage to restrain social reaction by colonizing minds, formatting subjectivities to act alienated against their own interests, or if the only choice left is repression, first selectively and then over large majorities.
Economic power could not impose the heist that sustains their privileges without counting on the complicity of some sectors of the judiciary and politics, hegemonic media, large part of the educational system and some strategic think tanks. With such coalitions, they managed to block the search for clarification, to instill hate and values against solidarity, general wellbeing, and the protection of the environment. Once again, the old adagio where the slave justifies the master prevails. Make them ignore what is happening; that the rotten and appropriators are kept safe; that concentration costs be paid by the people, the poor, and the indigent.
Neoliberalism generates a sense of resignation in the face of this imprecise fog that mixes the honest with the exploiter. It continuously calls on social sacrifice for a better future that never arrives. What it does not concede is concentration of wealth and decisional power. Humanity in need and a planet under attack do not matter.
A compass and guiding criteria
Those who maintain their determination to put a stop to this madness and the firm hope of being able to rectify the course, will need criteria to guide where to apply the efforts. One of the many possible strategies is to identify the engines that sustain concentration and address them all together, although, if this was not possible, following the hazardous trajectory of solving one by one. In a previous article, dismantle the concentration engines, we have analyzed some of the mechanisms that it will be necessary to dismantle:
- Mechanisms for accumulating economic power
- Media and judicial trenches, resilient to transformations
- Mechanisms for cultural submission
- Electoral mechanisms that allow for manipulating popular will
- Post-electoral subduing mechanisms
The challenge is to establish another global and local course and other non-alienated ways of functioning that can protect the planet and favor the whole humanity. We need completely different steering wheels with a clarified popular support and that submit their acts and decisions to public scrutiny.
It is a longstanding yearning to improve the world in which we live. We firmly believe that we will know how to liberate our captured democracies rising above hopelessness and fears. Other realities can be constructed, far away from impoverishing, making humanity groggy or stupefy.
Opinion Sur is a non-governmental, nonprofit group from Argentina dedicated to promoting sustainable economic and social growth in developing countries. Opinion Sur creates original ideas and strategic action plans to share with policy makers, entrepreneurs, academics, NGOs, and the public through advisory services, and a series of products: two monthly online publications – Opinion Sur and Opinion Sur Joven. Through Opinion Sur Journal, a free and non-partisan online publication, it circulates ideas that contribute to the sustainable development of countries in the Southern Hemisphere. This publication, which is also available in Portuguese and Spanish, focuses on three complimentary areas: Development; Geopolitics; and Transformations. Currently, there are more than 70,000 subscribers spanning across the five continents. More…
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