Inequality And Imperialism
By Farooque Chowdhury
19 October, 2014
Capitalism can't surmount inequality as the system itself creates the curse that humanity struggles to defeat. And, inequality, with imperial power and incapacities, affects societies in far flung areas distorting their economic-social-cultural-political development. Moreover, inequality with its political manifestations and ramifications threaten the system. But the system nourishes inequality. A seemingly strange, but inherent contradiction within the system!
Advanced capitalist economies, the economies that have fattened themselves by bleeding the poor in every corner of the planet, are bearing inequality in spheres of income, well-being, health care and education. It's not possible for the system to break down barriers to equality, the dream humanity nourishes in its heart. This takes away all logic for the existence of capitalism while connections of capitalist crisis are exposed.
The sharp rise in income inequality across the world is one of the most worrying developments of the past 200 years, said the Organisation for Economic Co-operation and Development (OECD) in a recent report. “It is hard not to notice the sharp increase in income inequality experienced by the vast majority of countries from the 1980s. There are very few exceptions to this”, said the report How Was Life? Global well-being since 1820 (van Zanden, J. L., et al. (eds.) (2014) OECD Publishing, doi: 10.1787/9789264214262-en)
“The enormous increase of income inequality”, the report said, “on a global scale is one of the most significant – and worrying – features of the development of the world economy in the past 200 years.” The report tracked wellbeing in eight world regions over two centuries.
About three years ago OECD Secretary-General informed: “Income inequality in OECD countries is at its highest level for the past half century. The average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25 years ago.” He was presenting Divided We Stand: Why Inequality Keeps Rising , an OECD study report, in December 2011. The Secretary-General said: Inequality increased further in the US , Germany , Denmark , Sweden , Israel . It has “fallen in Chile and Mexico , but in these two countries the incomes of the richest are still more than 25 times those of the poorest.”
The world capital blesses the rich: from seven times to nine times within 25 years, and more than 25 times of the poor!
Despite many countries' recovery from the Global Economic Crisis, the OECD finds, “the distribution of “market income” (gross earnings and capital income) kept widening … Measured by the Gini coefficient (which is 0 when everybody has the same income and 1 when one person has all the income), market income inequality rose by 1 percentage point or more in 20 OECD countries between 2007 and 2011/12.” (OECD (2014), " Income Inequality Update - June 2014 ”)
Inequality is behaving in an “amazing” way: Hardest the hit largest the increase. “The largest increases”, according to the OECD, “occurred in those countries hit hardest by the crisis: Spain , Ireland , Greece , Estonia and Iceland ”. France and Slovenia have the same experience. “In Spain and Greece , inequality of market income widened considerably in the aftermath of the crisis, and kept increasing more recently as the crisis persisted: compared to 2010, it increased by another 1.5 and 3 percentage points, respectively, in 2011. Market income inequality also increased by more than 1 percentage point in 2011 in Germany , Luxembourg and Portugal , compared to 2010.” (ibid.)
In Australia , poverty is on the rise. More than one million Australians are in severe poverty, with access to less than 30 percent of national median income. More than 2.5 million people, and one in six children, are struggling to fulfill their daily basic needs. More than 600,000 children, and one-third of children in single parent families, lived below the poverty line. A significant number of Australians remained in “deep and persistent” poverty for extended periods, often for more than five years. More than 40 percent of all people on social security benefits fell below the poverty line. More than 100,000 persons are homeless. Adult working-age Australians are more likely to be homeless than any other age group, constituting 44% of all homeless persons nationally. Children have the second largest representation among those classified as homeless, with more than 1 in 4 homeless, children. (Cassells, R., Dockery, M., and Duncan , A (2014), Falling through the cracks: Poverty and Disadvantage in Australia , Bankwest Curtin Economics Centre and Poverty in Australia 2014 , the Australian Council of Social Services)
The ACSS report cited the Australian Bureau of Statistics Household Income and Expenditure Survey that asked people about their actions because of a shortage of money. Actions taken by the respondents over the last year due to a shortage of money included “Pawned or sold something”, “Sought financial help from friends/family”, “Unable to heat home”, “Went without meals”, “Could not pay gas/electricity/telephone bill on time”. Do these sound “actions” by the poor in Third and Fourth Worlds (TFW)?
Australia , it was claimed during the Great Financial Crisis (GFC), was not facing the crisis. The economy was happily cashing on coal export. But the coal power, along with casino and prostitution, has powered poverty also.
Crisis not only generates inequality and poverty in capitalism. Crisis also aggravates inequality-situation although the system fattens with profit.
During the last 200 years, as the OECD compares, the world found capitalism gaining strength to strength, conquering heights after heights, plundering land after land, waging wars for loot, abusing science and technology for maximizing profit. Over the last 200 years capitalism has gradually and forcefully entrenched its world system. Two world wars ravaged the world during the last 200 years. The last World War and its aftermath put extra wealth and power in pocket of capitalism. The Korea and Vietnam Wars brought more money to capitalism. Multinational corporations made huge investments and made huge profit during the period. Capitalism's “golden age” was during the last 200 years.
Capitalism has ensured its control not only with its economic dictatorship, but has also imposed its political, information, cultural and ideological order, dictatorship, over the entire planet. It's imperialism. Post-revolutionary societies' efforts to reduce inequality set a few examples as the societies tried to break the chain of the imperialist world order. But those efforts faced disasters. A number of new examples are now emerging in a part of the planet. But still capitalism, the system owning enormous wealth, is the order of the day, and inequality dominates the capitalist system. Condition of the poor around the world is the evidence.
Poor: lost more gained less
Gains the poor made in the capitalist world disclose capitalism's capacity and incapacity, capacity to deprive many and benefit a few, and incapacity to initiate a fair distribution among many. “Lower income households”, the OECD finds, “either lost more during the crisis or benefited less from the recovery. Across the OECD countries, real household disposable income stagnated, and the income of the bottom 10% of the population declined from 2007 to 2011 by 1.6% per year (Figure 1). Focusing on the top and bottom 10% of the population in 2007 and in the latest year available shows that, on average across the OECD, the drop in income was twice as large for the bottom 10% compared with the top 10%. Out of the 33 countries where data are available, the top 10% has done better than the poorest 10% in 19 countries.” (ibid.)
Figure 1: Poorer households tended to lose more or gain less Annual percentage changes
in household disposable incomebetween 2007 and 2011, by income group
Source: OECD (2014), "Income Inequality Update - June 2014”. © OECD 2014
1. Data for 2007 refer to 2006 for Chile and Japan ; and 2008 for Australia , France , Germany , Israel , Mexico , Norway , New Zealand , Sweden , and the US . Data for 2011 refer to 2009 for Japan ; 2010 for Austria and Belgium ; and 2012 for Australia , Finland , Hungary , Korea , Mexico , the Netherlands and the US . For Hungary , Mexico and Turkey data on market income inequality are not available. There is a break in the series in 2011 for the UK , and results are not strictly comparable. 2011 data for Ireland and the UK are provisional.
2. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
3. ( ? ) in the legend relates to the variable for which countries are ranked from left to right in increasing order.
Disposable income also experienced inequality. Spain , France , Hungary , Slovak Republic had larger increases in disposable income inequality. Following a few years of stable inequality in disposable income Germany and the US , the two significant economies in the world capitalist system, found a significant increase in 2011 and 2012. In Finland , Korea , the Netherlands , Poland and Portugal , the slight decrease in disposable income inequality continued in 2011. (ibid.)
Most of the OECD-countries (Oc) are in the First and Second Worlds. What happens to the poor in non-OECD-countries, most of which are in the poor TFW? In most of the Oc, transparency and accountability in the ruling mechanism is better than the countries in the TFW. What the poor in the TFW face everyday in the present world order if the poor in the Oc benefited less and lost more?
The TFW-countries are not only home to backward economies; these countries are also (1) victims of the world capitalism that mercilessly exploits all the resources of these countries; (2) home to crude ruling elites that openly plunder the people and the nature in respective countries, ruthlessly dominate entire societies, and lumpenize political process; and (3) victims of imperialist intervention, which is carried out not only with armed forces, but also with other forces that include aid, finance, science and technology, and diplomacy and politics. This reality of invasion increases inequality in the TFW-countries.
Lumpenizing political process is a single example of many acts and processes that increase inequality. Functions lumpenized political process carries out include snatching away minimum rights based on which people can get mobilized, voice issues related to inequalities, infrastructure and essential services, demand wage rise, protest wage cut and destruction of nature, environment and ecology.
“With the tightening of class lines and the increasing severity of social conflict”, Sweezy writes, “parliament becomes more and more a battle ground for contending parties representing divergent class and group interests. … [P]arliament's capacity for positive action declines…” ( The Theory of Capitalist Development , MR Press, 1964) Sweezy's observation was on parliaments in capitalist economies.
In the periphery, the parliament-reality is different from those in the center. Moreover, the reality in the periphery is not only related to parliament. Its distortion/perversion is wider. “In the periphery … efforts to copy the bourgeois institutions of the center … either produced empty façades or were discarded by dominant classes … who saw in any concessions to the underlying population a dangerous threat to their continued rule.” ( Four Lectures on Marxism , MR Press, 1981) This reality of empty façade hurts people's efforts and struggles against inequality.
Now, it's an accepted fact that destruction of nature, environment and ecology hurts people, and the poor is hurt most. The world capitalism makes money by demolishing nature, environment and ecology while people get hurt – deprived – because of the demolition. And, today, imperialism is the army of the world capitalism that makes the onslaught on environment, etc.
Today's Iraq , Afghanistan , Libya , Syria are burning examples of increased inequality due to imperialist intervention. People in countries that turn into victim of imperialist intervention not only stand helpless in front of destruction and disruption of all arrangements and services essential for their survival; they also find institutions critical for survival either vanished or vacant or pseudo. In lands invaded by imperialists, mere daily survival with barest provisions turns out the only fact of life as the first and only concern of the peoples there in those lands is insecurity/security of life. Uncertainty compounds insecurity in the life of the people. All essential and basic provisions for sustaining life are hoarded in an imperial depot named dearth. Organizations required for voicing needs and waging struggle to attain essential provisions and services turn dysfunctional during and after invasion. The atmosphere that overwhelms an invaded land is hostile to people's organizations capable of organizing people's democratic struggle as only “good wishes” of victor, represented by an administrator or a commander or an ambassador, prevails there. The entire situation increases inequality.
Imposition of neo-liberal measures in countries is an example of imperialist intervention in the form of economy. The countries intervened are now not only the TFC, but countries in the Second World also. The regime change episode in Greece and Italy are examples.
The neo-liberal measures – selling out of public properties, utility services and infrastructure are only a few of those measures – increase inequality. Neo-liberal measures are imposed by imperialism. Its power and organizations impose it.
The recent bombardment with austerity measures in Greece and other countries is another example of imperialist intervention. These countries are examples of rising inequality that the measures generated.
Imperialism, thus, emerges as one of the main actors behind inequality and its rise. Mainstream's discussions on inequality don't take into account the issues of imperialism and the world order that the imperialist powers run. It's mainstream's altum silentium , profound silence.
[ It's part I of an essay on inequality. ]
Farooque Chowdhury is Dhaka-based freelancer.
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