November 10th, 2009 § 0 comments

In a recent debate at Kings College on the future of capitalism, Martin Wolf, one of the main proponents of global capitalism, and principal economic spokesperson for the City, argued that we can not easily change the nature of global wealth inequality, as people in the developed world would not be prepared to give up what they already have. In a defence of capitalism, and in response to one of the questions from the floor, he challenged the audience as to whether they would all be prepared to give up half of everything they owned for redistribution to poorer countries.

The argument that in order to achieve any kind of large structural change to the economy there must be a trade off against current standards of living is one that is very popular in capitalist circles, and often repeated, yet it hides the real structural factors that prevent any meaningful change. This type of argument is even used by those who see capitalism as merely a least worst system, but who cannot envisage any other way of challenging the status quo than ‘sharing’ the costs.

In the example of global poverty, we  (the general population) are asked to give up our current (modest) living standards to help others. However, this hides the real causes of global inequalities, such as  the production of goods based on profit rather than human need, the resources wasted on illegal and immoral wars and the reification of the financial sector over the productive sector.

Within developed countries like the US and UK, income inequality is already increasing, so the cuts are already happening to some extent:

Although not everywhere:

The cuts that need to be made are not in the living standards of the population and public services (which compromise the social wage), but in the income of the wealthy, the bonuses of the bankers, nuclear weapons and war, and corporate profits. We need production to be realigned to meet human needs, and we need to stop pretending that gambling on stocks and shares contributes anything to society as a whole. We have the greatest productive capacity in the history of mankind, yet we are still unable to feed, clothe and shelter the world. We don’t need cuts in wages, jobs and production to help the capitalists cope with the financial crisis, we need them to accept cuts in their profits and their wages.

The same argument is seen with regards to climate change. We are told that we need to ‘reduce or energy consumption’, or pay higher prices if we don’t in order to cut global emissions.  We need to fly less, drive our cars less, use less power at home.

These mechanisms barely touch the tip of the iceberg, but are an ideological drip to prepare us for the higher prices and ‘trade-offs’ we will be forced to make in the future. Of course, when they say ‘we’ need to fly less , they don’t mean everyone. As fuel prices rise in the future, the poorest will suffer first.

But this trade-off, the acceptance that we must expect lower standards of living if we are to save the environment also hides the real structural factors that need to be tackled. Firstly, we need huge investment in green energy. We have the technology, but this would cut the profits of the current global energy companies, who will only invest in clean alternatives once they have squeezed every ounce of profit out of coal, gas and oil reserves.  As somebody once said, we need to make sure the shit doesn’t get into the pipe, not try and sieve it out once it has got into the water. We need to produce energy clean, not focus on just using less of it.

Secondly, we need cuts in the amount of SUV’s and oil guzzling over sized cars, in the number of cars in city centres, and of  government subsidies for car manufacturing industries. We need investment in public transport systems designed to fulfill the needs of the people, not the profits of the transport companies.  We need cuts in rail and bus fares,  not increases. We need to get rid of intellectual property rights and patents that prevent the spread and sharing of beneficial technology, and to renew commitments to global climate change agreements, and not worry if these cut into the profits of the minority.

We need cuts, but not the sort the City and Government have in mind!

Leave a Reply

Your email address will not be published. Required fields are marked *

What's this?

You are currently reading Cuts? at Sim-O.