Not just redistributing income: eliminating concentration and securing decisional sovereignty.

Non-central countries emerge from a hard past that molds the present and projects onto the possible future. Are we doomed to proceed in the path we are running or would it be possible to choose other courses that may allow us to reach more equity and decisional sovereignty? Is it enough to concentrate in redistributing income without addressing how to remove what sustains the concentration process of wealth and decisions?

 

Since the colonial past, while going through different phases of decisional sovereignty, burdensome social and territorial inequalities were established. A curtailed sovereignty faced with the power of economic groups more and more concentrated. This power is expressed within our countries through a double economic dynamic: some ruinous and speculative financial operations that unceasingly suction huge segments of domestic savings, together with an influential web of a few large national enterprises and multinational subsidiaries that are among the largest corporations of each country. Even though the subsidiaries generate jobs and mobilize local suppliers of some inputs and natural resources, they stock up through their own global web of inputs, capital goods, and strategic services; their investment, technological and commercial decisions are subordinated to those of the global network, decisions that are largely adopted by their headquarters.

In this context, different strata of local consumption are served by a heterogeneous productive web of corporations of different sizes and productivities: large enterprises live side by side with medium, small, and very small (micro ventures) that face importer competition from a disadvantaged position.

In this manner, the way in which the processes of value generation are structured in these countries and, afterwards, the retention of value by those who produce it or its appropriation by more powerful actors, has a pyramidal structure with clear tendencies to favor the concentration in financial groups, larger local enterprises, and headquarters of multinationals. The interests of those who have taken the wheel steer of the local and global functioning prevail while the interests and needs of populations are subordinated to the unwavering logic of the concentration process of wealth and decisions.

Thus, different economic dynamics coexist within countries: some integrated to the prevailing global order extracting value generated by local actors and transferring it to concentrated power centers; and other subordinated economic dynamics that also extract value capitalizing national strata of economic power. These two types of dynamics are related and mutually reinforced but should not be confused.

A country’s insertion in the international order is a decisive aspect that exerts great influence in its future course: the cross-linking of variables and powers leaves non-central countries with residual reproduction spaces, though, of course, some improvements could be achieved. Instead, the economic dynamic geared towards satisfying local interests and needs, also with a pyramidal structure, presents spaces to grow more vigorously and with stability if they were transformed by political coalitions orientated towards achieving equity and more decisional sovereignty.

Options to choose from

Options for non-central countries go from submitting to the imposed order (concentrated, full of inequalities, destructor of the environment, authoritarian, alienator and colonizer of subjectivities) at one extreme, up to leaning over to voluntarisms that ignore or underestimate the weight of subduing dynamics embedded in the ever more distant limits of territories and individuals.

Of course, there is a variety of other options (singular to each situation) that do not surrender the will of addressing different courses. These options look for ways of transforming prevailing (covert or open) dynamics that sustain the concentration that today overwhelms the world. The ordering criteria of these options aim at achieving social equity, environmental protection, and more decisional sovereignty.

Futility of just distributing income

When popular-base governments electorally access the State (always disputing power spaces with economic groups that have the support of opposing parties, media, and sectors of the judiciary), they try to finance dammed social vindications through different redistributive modalities. That is, they hardly touch the productive structure and the economic functioning they received, but rather they redirect what they can of the National Income the way it is produced to satisfy needs, new rights, and aspirations of middle and popular sectors. This effort in redistributing income is legitimate and valuable and we would not dare to discourage it. What we will point out in these lines that follow is that a social transformation geared towards achieving more equity and national sovereignty will also need to transform what sustains the concentration process of wealth, income, and decisions. If the redistributive route just mitigated the suffering and punishment that large majorities suffer, if the environment were not to be cared for vigorously, then we will not be dismantling the concentrating dynamic; we will allow it to continue reproducing itself.

In those cases, eventual improvements in the general wellbeing and higher levels of decisional sovereignty that might have been achieved could revert themselves with the ascension to political power of neoliberal groups and movements. Therefore, popular-base governments would do well to orientate their administration towards achieving the transformation of the mechanisms that sustain economic and decisional concentration and not just its effects. If they were to do it, they would strengthen the today seriously threatened course towards full democracies leaving behind the phase of captured democracies that is still prevailing.

Fundamental transformations

Profound transformations in economics, culture, media, and judiciary as well as other areas of a country’s functioning can be addressed if we can count on a social and political organization capable of acting as a counter-power to the traditionally hegemonic forces. For that, it is indispensable to organize and unite the different spaces of the popular field and support the never-finished work of clarifying others and ourselves about why, how, when, and were facts and mechanisms we need to revert happen the way they do.

In the economy, there is a variety of mechanisms for accumulating wealth that are projected onto the decisional power. One of the most burdensome is the appropriation by groups specialized in financial speculation of large part of the value generated by the entire population. This appropriation sterilizes significant resources that make for the national development potential, which, in a different scenario, could be dedicated to invest in the real economy and integrate onto new bases large sectors that are unemployed or underemployed in residual economic spaces. Thus, we point out the need for transferring vast resources that are today concentrated in financial speculation to new productive spaces of the real economy to generate more equity and decisional sovereignty. We are linking two challenges that complement each other: elimination of value appropriation done by concentrated groups dedicated to financial speculation, so as, at the same time, to finance with these, and other resources that are detailed further on, the managerial, commercial, and technological assistance and backing of large segments of the active population which were historically undervalued and unjustly marginalized.

No larger resources are needed to eliminate value appropriation done by financial speculators but profound changes in the rules of the game, such as taxes on financial returns to completely eliminate the extraordinary profits that they obtain today. Investments in the stimulated and transformed real economy should be more profitable than others parasitic that just suck on value and recycle it into old and new modalities of financial speculation. It is outrageous to ascertain that certain public policies promote, instead of eliminating, the speculative bias. This dynamic is social and economically unsustainable.

Together with the passage of resources from financial speculation to the real economy, it is also necessary to transform certain dimensions of the real economy that contribute to the concentrating process. Large corporations have such power in comparison to that of the State, workers, middle-size enterprises and small ventures that they manage to accumulate extraordinary results through evading or eluting taxes, flying capitals, imposing prices and conditions onto suppliers, consumers, and workers. They unload over the rest their own responsibilities and they curtail genuine income from the State, what frequently induces to take up more sovereign debt, one of the most effective factors in subduing countries and subordinating the interests of their peoples.

The economic system is neither internally structured nor inserted in the world with the perspective of securing the best reachable results for its population and environment; nothing is further from the truth. Rather, it is structured and adopts a way of functioning that is, in essence, defined by the decisions adopted by the most powerful economic groups. These decisions are made in terms of their own interests and, in many cases, of their distant headquarters: They are also considered a priority by public policies, thus, the interests related to the general wellbeing and the protection of the environment are subordinated to them.

The structure thus imposed to the national productive matrix and the way how main value chains operate make non-central countries prone to inequalities and recurrent phases of systemic instability.

We refer the reader to other texts published by Opinion Sur for some necessary specificities when addressing transforming the productive matrix, value chains, and international economic relations to integrate the entire active population to the economic system with equality, to overcome vulnerabilities of scale, and to sustain organic growths.

An ideological falsehood that we need to clear up

It is false that non-central countries do not have resources and talent at their disposal to successfully address paths of sustainable development. There are, but they are extracted and flight away from our countries. If this is not understood, if concealed mechanisms of value appropriation are not uncovered, if we do not support the self-esteem of our population and of those who are capable of organizing onto different bases the production of goods and services (not greed, endless profit, selfishness, but rather satisfying everybody’s needs and care for the environment), then, our minds will remain colonized and our wills submitted.

There start most of the challenges. Instead of surrender, clarify and organize; instead of believing that only by collapsing what exists we will reach the other shore, we will need to make explicit the desired society and how to sustain it; built the new, preserve the valuable old; perceive the other; reach out. With these and much more that we will need to unwind, we can move forward, now yes, to full democracies.

 

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