Opinion Sur
Extreme inequality is the flipside of the concentrating process imposed on the world. It mercilessly punishes large majorities and makes it impossible to establish social, environmental, and economically sustainable development. Dismantling the mechanisms that generate such destructive processes is one of the main challenges facing humanity.
Inequality does not explain by itself the course of events, but it is the result, which has become a constitutive part, of a network concentrating wealth and power. Hence, once installed, inequality becomes a critical component of domination: it plunges majorities into scarcity and forces them to concentrate on survival, an artful mechanism for essential needs without coverage to weaken hopes and popular determination.
The impact of inequality
Among the impacts of inequality, we highlight that the process of concentration-inequality fragment societies, destroys the environment and destabilizes economies.
Concentration-inequality fragments each country’s society between minorities who appropriate surpluses and live in outrageous opulence, and majorities of middle and popular sectors left behind, punished, or excluded from the welfare they deserve. It is inevitable that such opprobrious contrasts augment social frustration generating alienated reactions of hatreds, fears, accusations to other victims used as scapegoats for calamities that they did not generate. Tremendous deficiencies in health, food, education, housing, drinking water, security, political participation, cultural development, recreation, among others, sicken and kill people. This harshly challenges democracies that are not able to ensure the satisfaction of basic fundamental needs; they thus fall easy prey to those who generated the disaster, those who hold economic and decision-making power with their accomplices in politics, the media, and judiciary.
The desire to accumulate at any costs, the basis of concentration-inequality, seriously compromises the environment of the planet. Processes essential to the life of humanity and other beings are swept away by those who produce whatever and however in order to maximize their rate of return. The evidence of the destructive impact they commit do not move them, even if they exceed the limits of environmental sustainability.
Extreme contemporary inequality dynamites the sustainability of virtually every economy. On the one hand, there is a very serious decoupling at the level of the real economy between a demand that fails to accompany the productive supply needed by buyers for their products. That is, the income of middle and popular sectors does not grow at the same rate as the supply of goods and services that seek to be placed in the markets. As economic power does not give up its eagerness to concentrate and, therefore, the possibility of feeding demand with genuine income, the economy turns to substitute solutions. One of the most serious is the continuous indebtedness of families and countries that, over time, slide into drastic situations of over-indebtedness impossible to repay. Debtors are at the mercy of creditors only interested in preserving privileges and huge rates of profit. At the same time, capital that sees lucrative opportunities restricted in the real economy, turns to speculative financial markets with high risks and returns. These markets make it possible to reproduce profits… until a segment of investors decides to withdraw, generating bursts of fearsome speculative bubbles. These outbreaks occur in specific sectors but can spread violently and deepen crises of systemic magnitude. When they happen, dominators force the state to use public resources to finance bailouts at the expense of their victims, the middle and popular sectors.
The neoliberal imposition
There is a lot of deception, lies, misinformation and repression in neoliberal regimes. Thus, for example, they point out that countries subjected to the process of concentrating tremendous inequalities and destroying the environment do not know how to get out of the quagmire. It is not so; leaderships and transformative militancy know what new course and way of functioning to adopt. It is not only about knowing how to act but it is a struggle for predominance between dominators and dominated.
They also point out that a good part of the population is submerged in a kind of nebula that obstructs the understanding of what is happening and the choice of the right exits. What is not explicit is that the nebula does not come from heaven but from the deliberate action of neoliberalism that cannot defend its interests openly or make explicit those who favor its policies and those who harm it. They need to cover up what is happening, to conceal the consequences of their policies, to cover up their responsibility for the disasters they commit. This cover-up is achieved with the complicity of the media that are integrated into the concentrated power. They also seek and manage to obtain ideological cover that protects their looting of strategic think tanks that they finance and promote. To ensure impunity, they co-opt sectors of the judiciary system that misuse legal procedures to give the appearance of legality to the persecution of opponents.
Unlike coups and military repression, neoliberalism now captures decision-making nodules of democratic functioning in order to access electorally the control of the state apparatus (rules, regulations, resources, intelligence agencies). By capturing democracies, they add to their power speculation and looting operations to enrich themselves even more. From within the democracy, they distort the very essence of democratic functioning. The resources they manage allow them to bribe officials, journalists, judges, prosecutors, and some of those responsible for controlling institutional functioning.
With this action of deception, corruption, and cover-up, they come to colonize minds and format the subjectivities of their victims, transforming them into accomplices of their victimizers. Hence, one of the greatest democratic challenges is to deploy a permanent effort to clarify and organize the middle and popular sectors.
It is painful to see political cycles that are repeated where neoliberal governments reinforce economic and decision-making concentration even until when continuing to squeeze the peoples reaches unsustainable limits. They then pass the torch to grassroots governments to reduce the robbery. That transition does not include ceding the helm of the concentrating march for which they take care to preserve political, media, and judicial trenches that hinder and slow down any transformative attempt. While it matters that grassroots governments manage to control the state apparatus, small advances should not dazzle us. It will be necessary to remove the engines of concentration without leaving a vacuum where neoliberal restoration is encapsulated.
Exit strategies from neoliberalism
The strategies are well known and there are successful experiences to get out of neoliberalism in search for a new project of a social, environmental, and economically sustainable country. A qualified diversity of authors has provided valuable referential utopias, government plans, strategies, public policies, trajectories that outline new courses and ways of functioning. Opinion Sur has also published columns and books on these critical aspects. In any case, it is worth making a synthesis of these options, some already executed others in execution, clarifying that the exits of neoliberalism are always singular according to countries and their circumstances.
An exit strategy does not involve isolated measures but an effort in all dimensions of social functioning. A main focus is to dismantle one by one the mechanisms that sustain the concentrating process and, at the same time, provide the great majority with better incomes and fundamental basic services. In this way, the systemic course is changed, and the critical popular support is strengthened.
A strategic measure is to cut the circuit practiced by concentrated power by obtaining high profits due to their oligopolistic position, evading or eluding taxes and undeclared capital flight. These crimes make up a tremendous drain of surpluses that can and should be redirected to cancel the enormous social debt as well as to finance strategic local development projects. We know how to do it and we know the looters. There are no mysteries, only that those who commit crimes have complicities to ensure impunity for their misdeeds.
A principle of justice requires that those who profit without limits at the expense of the rest contribute to financing the new country project. Facing harsh resistance from concentrated power, in some countries it was possible to impose extraordinary contributions on billionaires. This required establishing political coalitions of middle and popular sectors, aligning their various interests as much as possible.
In any case, it is necessary to tax the assets and income of the concentrated groups. There are countries where taxes on wealth (personal property) already exist; where there is none, they will have to be established by complementing them with increases in the income tax on the sectors of greater wealth. Tax laws often contain gaps that are exploited by those who should be the main taxpayers to avoid their tax liability. Even the president of the United States denounced this injustice pointing out that in recent years CEOs (senior executives of companies) “went from earning 20 times more than an employee to 350 times more; that the country’s 55 largest corporations earned $40 billion in 2020 and paid 0% taxes, and that the richest 1% evade $116 billion a year.”
Necessary changes must reach the productive matrix of the country, structured based on the juxtaposition of individual investment decisions taken by large groups in order to maximize their profits. This generated a structural dysfunction that causes economic growth itself to generate serious sectoral and external sector bottlenecks (recurrent shortage of foreign currency and imported inputs). These changes are complex because in order to balance external accounts it is necessary to adopt a variety of corrective measures including promoting export activities (primary, industrial, and services) along with discouraging activities that are intensive in imported inputs.
No less important is to regulate the functioning of value chains where the leading companies are the ones who concentrate the greatest results, defunding small and medium suppliers and harming consumers who give up income by paying oligopolistic prices. What is relevant is that there are measures that facilitate a better distribution of results within value chains.
A front of strategic importance is to support the popular economy by promoting a solid capital formation, its structuring as productive organizations of medium size, access to markets, the incorporation of management and knowledge of excellence, assuming tax, labor and environmental responsibility adjusted to their characteristics and possibilities.
While these components are critical to rise from neoliberalism, they do not exhaust the options that a society must assume to shake off subjugation. There is much hope going on that is worth sustaining and improving; we are not orphaned of solutions nor in lack of determination to move forward.
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