Reducing the (Riches) Gap

[DesDownunder]

Chris Hurford is of the old school Australian Labor party. In other words, a bit left of centre. Not a lot, just a little.

He has published an article of interest that addresses, "the problems which result from the widening of the income gap between the ?haves? and ?those who have a lot less?. I will skip past his report of "the debilitating problems caused by the large gaps," to the rather interesting summary of ideas he has to lessen the social problems caused by the disparity between the poor and those who have, everything else. To my thinking this is relevant to more nations than just Australia.

From his longer article in the Adelaide review, I quote the following excerpts, or if you like read the whole article here

He writes:

[...] In summary, the research shows that the larger the gaps between rich and poor, the more painfully dysfunctional are the lives of the people in those nations. If a country scores badly on health, you can be sure it imprisons a larger proportion of its population, it will have more teenage pregnancies, its literacy scores will be lower, it will have more obesity, poorer mental health and so on. Reducing these ills improves all lives in that nation, including the lives of ?those who have more?.

How do we go about reducing these afflictions? What are our options for closing the income gaps, the cause of the worsening of so many of these social problems? I?m not in favour of the first option that comes to mind, namely using taxes and benefits to redistribute the unequal incomes. Punitive higher taxes not only lessen the incentives for more effort but also fail to bring in a greater income from the taxes. For instance, the UK Government halved the top rate of tax from 80 percent to 40 percent in their 1988 budget. In 1979, when the old punitive top rate applied, the rich contributed just 11 percent of the income tax collected. By 1999 this had doubled to 22 percent. Also the fewer welfare recipients there are, the better it is for that society; we have become more aware recently of the ills of welfare dependency.

The far better way to lessen inequality is to take every possible step to ensure a reduction in the vast differences in gross incomes, reducing the obscene disparities in the pay of the upper echelons and those on the lower rungs. You do not need big taxes or big government to achieve a better society for all if you provide more fairness in the pay packet. The differences in the rewards for work are far too great at present.

My starting point to improve this situation is to achieve a larger proportion of ownership by employees of the organisations for which they work. There is, for example, a growing movement for such employee ownership in workplaces in the UK. The turnover of the companies which belong to the UK Employee Ownership Association has reached 20 billion pounds per year. There are many different models but, for me, the least complicated one is for legislation to ensure that we move towards each organisation making arrangements for 15 percent of the rewards being declared from profits going to the employees. In other words, of the dividend declared, 85 percent goes to those who have provided the risk capital and 15 percent, in addition to their wages, to the employees.

It is necessary, also, to include in the corporations and tax acts a requirement that the CEO, the top earner in his/her organisation, be obliged to draw a salary no more than, say, ten times greater than that of the lowest paid employee. (It might be necessary to work out an adjustment upwards for CEOs of the larger companies). Similar thought must be given to the rewards of those in the public sector.

These part ownership ideas would revolutionise industrial relations in this country. A number of the older Trades Union leaders might resist initially, but industrial relations will always be a problem for us until there is a breakthrough of this sort ? no longer ?us? and ?them?, we are all in this together for a fairer nation. Have you noted the growing unrest in Australia?s booming resources sector? Workers have walked off the job because, for presumably cost-cutting reasons, they will not be able to return to their same room after they have had their two weeks R&R ?down south?. Do you think these workers would be striking if they had an entitlement to a share of the profits?

How do we get such changes through our present political system? ?With difficulty? is the easy answer! From my eighteen years? experience in our federal parliament, I found that our system is such that members cannot even agree on the necessary reforms to the parliamentary standing orders to avoid those appalling standards which degrade the parliamentary chambers in Canberra, much less carry forward the sort of reforms I am talking about here. To achieve such reforms we shall probably have to rely on a people?s movement for change such as happened after the Corowa Constitutional Convention in the 1890s, leading to the attainment of the federation of those separate colonies into our new nation with its first constitution.

My thoughts:

Whatever the answers, I think we have to acknowledge the present system(s) cannot be sustained without creating two extremes in the (world) population, which will become divisive (probably with violence) to the point of extinguishing any kind of solution other than revolt or draconian controls. Neither of these are acceptable. One, because it ends up with the rich and the poor merely changing places, and the other because the poor become incarcerated slaves.

Hurford's vision seems to permit at least, an interim measure of closing the gap, without abandoning the free market, or adopting big brother government.

[Trab]

The one big concern I have with this is that it still encompasses the concept of growth. Profit is effectively growth, and usually by reducing something else. That something else is often other workers or industries, but in virtually all cases it is achieved at the expense of Mother Earth. Whatever it is that is being done, energy is being expended, resources are being used, and waste, usually pollution, is being created. Reducing the gap will help people in the interim, but the long term effect may be to even more effectively destroy what is left of our planet. What is really needed is a reduction of human population.

[DesDownunder]

I don't think Chris is unaware of the threat to the planet, but rather his concern seems to be to not reduce the population via increasing the poverty stricken to the point of death because a small number of people want to, or do, have enough money to fund an outrageously extravagant lifestyle.

If we are going to look at the system itself then, we have to find a new economic model other than capitalism on the one hand, or communism on the other. feudalism seems, for the most part, to have died out.

However the socialist model has also fallen into disrepute, mainly through its humanist ideals having been undermined by the corporate profit mentality.

Chris does not address this in his article, but I am sure he is aware of it. Indeed I think his proposals, are a direct result of his lateral thinking trying to find a way to accommodate the current dominant economic models while reducing the hardship of those who have next to nothing.

It is important to realise that socialism is not communism, any more than capitalism is feudalism.

No answer is going to be immediate or satisfactory for everyone. The trick is to see that anything we do is towards an improvement for all factors, the planet included.

(Personally I wonder about the Star Trek model, but not sufficient is explained about that, for anyone to know if it is acceptable.)

[Cole Parker]

The one big concern I have with this is that it still encompasses the concept of growth. Profit is effectively growth, and usually by reducing something else. That something else is often other workers or industries, but in virtually all cases it is achieved at the expense of Mother Earth. Whatever it is that is being done, energy is being expended, resources are being used, and waste, usually pollution, is being created. Reducing the gap will help people in the interim, but the long term effect may be to even more effectively destroy what is left of our planet. What is really needed is a reduction of human population.

That's a rather sour view. I certainly agree that population growth is a major problem for this planet. But thinking the only solution is the elimination of great numbers of that population seems rather extreme, doesn't it?

Our history as a people is that we find solutions to problems. Extrapolating from that history tells us we'll continue to do that. Problems appear insoluble until someone or someones find an answer, and then we simply put that behind us and move on to other things.

Look at a few of the things we've managed to find solutions to: various and sundry pernicious diseases, political catastrophes, religious interference with societies (does the word Inquisition ring a bell?), Nazi extremism, threat of nuclear holocaust--and this only scratches the surface. In every case, the problem looked intractable at the time. And then it was solved.

I believe in people, their resourcefulness, their spirit, their will to survive. China has already taken on the population growth problem in their country, the one having the world's largest population. I don't like their solution much, but they did something at least. Other countries will when they see it's to their advantage to. And right now, it appears the great gods of earthquakes and icecaps are pitching in.

Does anyone really doubt we'll find a way?

C

[DesDownunder]

I agree with your optimism Cole, but I have to say I do not think that we have found a solution to the religious interference which influences our societies as yet. Indeed, as much as I like to think that religious organisations are screaming at the death knell of their existences, I also see those organisations as gaining influence over people in a most deleterious manner to individuals realising the fulfilment of their living potential.

It is always easy to find something to worry about, and not always easy to realise that behind the clouds, the sun keeps shining. We just don't want the clouds to get any thicker, become permanent, or even non-existent.

The truth is, I think, we need the worriers, the optimists and the problem solvers if we are to continue being the appropriate form of sentience in our corner of the Universe.

[Trab]

Look at a few of the things we've managed to find solutions to: various and sundry pernicious diseases, political catastrophes, religious interference with societies (does the word Inquisition ring a bell?), Nazi extremism, threat of nuclear holocaust--and this only scratches the surface. In every case, the problem looked intractable at the time. And then it was solved.

Unlike Des, I think you are looking through rose colored glasses, Cole. One really bad aspect of seeing through a red filter is that you cannot see blood, or maybe that's a good thing.

If I remember correctly, only polio has been eradicated. Instead, we have nice new diseases cropping up all over the place. Political catastrophes are happening all over the place, although I admit the USA is a bit more stable right now. Religious interference is reaching new heights of fervor, and China is only too happy to continue with its increasing human rights extremes. Nuclear holocaust, while not imminent, remains an ever increasing concern with Pakistan and India trading threats, Iran building up their own capabilities, and North Korea playing 'chicken' with us all.

My problem (besides an obvious slant to the negative right now) is that I don't think people are actively INTERESTED in solving the problems. I think there is a core of manipulators who are actively seeking to continue and even increase the troubles, all for their own gains. In the past, many of our problems were with misguided people, or unfortunate natural challenges, but currently I think we are dealing with soulless institutions, which we've allowed to gain the upper hand. We bow down to systems and organizations and follow them, without thinking about the long term at all, and those organizations don't care about us in the short term, but only about their own survival in the long term. To ensure that survival they are actively working to dumb down humanity.

All our improvements in technology have not educated us, but rather have made us fact mongers. We have at our fingertips (literally, via computer keyboards) all the facts and more, but we have no UNDERSTANDING. While youth may be able to recite facts about just about anything, finding one who actually understands how it all fits together and what it means is next to impossible.

I am not optimistic.

[DesDownunder]

Trab, I share your despair at all the very same things that you see.

It is because I see them that I won't give into the pessimism, it is because I see the pessimism that I have to constantly make the effort to be optimistic, that I have to take the rose coloured glasses off, and dare to see the bloodied horrors and inequities, and allow them to inspire me to do as much as I can to not contribute to more of the same horrors, and whatever I can, to alleviate the suffering they cause.

Some days I succeed, some days, not.

But every time I bring a smile to someone else's face, every time I laugh at my own stupidity, every time I dare to say "No, I will not feed the horrors," then I realise I am really saying Yes to life with all the goodness I can muster.

None of this is as important as pointing out to you that your concern for all these things, your telling us of your dismay, is in fact an act of optimism in itself, it is a matter of your concern, your compassion, and your love of life, and all that is good in it that you have found and think is being wasted. And with each of those you give me hope, make me optimistic because you dared to let us know how much they affect you. Why do you do that? Because you care. As long as someone, even if just one of us cares, all is not lost.

You are more optimistic than you think.