The release of Oxfam’s report on global inequality: ‘working for the few,’ reveals a number of damming indictments upon capitalism and the developed world. Some of its findings are startling:
- The richest 85 people across the globe share a combined wealth of £1trillion, as much as the poorest 3.5 billion of the world’s population.
- In the US, years of financial deregulation directly correlates with the increase in the income share of the top one per cent, which is now at its highest level since the eve of the Great Depression;
- In Europe, austerity has been imposed on the poor and middle classes under huge pressure from financial markets whose wealthy investors have benefited from state bailouts of financial institutions.
Despite the global economy reaching $72 trillion, the largest in world history and global trade worth $36 trillion, (again, the largest in world history) never have so few been so rich and never have so many been so poor. The Oxfam report is a chilling reminder of the depths of wealth inequality across the globe; widening inequality has created a vicious circle where wealth and power is concentrated in the hands of a few, leaving the rest to fight over crumbs.
Capitalism has failed in distributing wealth in any equitable manner. Even in the birth place of Capitalism and today’s epicentre, Europe and the US, wealth distribution remains a massive failure.
The dogmatic views of the free market and economic growth relegated wealth distribution to the invisible hand that only liberals can see, the rest of the world, since such ideas were presented in 1778 by the god father of capitalism, Adam Smith, still await the fruits of this obscure process. The trickle-down effect which was meant to make wealth flow from the top to the bottom remains as elusive as ever and is in fact worse today then Victorian Britain.
Richard Robbins in his award winning book ‘Global Problems and the Culture of Capitalism’ confirmed this when he said “The emergence of Capitalism represents a culture that is in many ways the most successful that has ever been deployed in terms of accommodating large numbers of individuals in relative and absolute comfort and luxury. It has not been as successful, however, in integrating all in equal measure, and its failure here remains one of its major problems.”
One of the main reasons for this economic inequality is because the rich have huge influence upon political leadership and political institutions. These have become undermined as governments overwhelmingly serve the interests of economic elites to the detriment of ordinary people.
The Oxfam report recognizes the curse of capitalism – money and politics, “Since the late 1970s, weak regulation of the role of money in politics has permitted wealthy individuals and corporations to exert undue influence over government policy making.”
It is money that should have been separated from politics rather than religion.
The rich have been able to preserve such a status quo as the lowest tax rates, the best health and education and the opportunity to influence are handed down to their children. Without a concerted effort to tackle inequality, the cascade of privilege and of disadvantage will continue down the generations. Economic growth today amounts to little more than a ‘winner takes all’ windfall for the richest.”
Capitalism has no solutions to wealth distribution, more economic growth, changing tax regimes and tackling tax avoidance are merely skirting around the real issue. This is a systemic issue and merely reforming capitalism will just perpetuate the problem. Despite describing the inequalities of capitalism, even Oxfam accepts the sad realities of capitalism, “Some economic inequality is essential to drive growth and progress, rewarding those with talent, hard earned skills, and the ambition to innovate and take entrepreneurial risks.”
Capitalism only has one view towards wealth distribution, namely leaving it to the free market. A number of countries seeing the failure of the invisible hand have turned to the visible hand of the state and have achieved mixed results. It has been over two decades since the collapse of the Soviet Union, when liberals celebrated capitalism’s unilateral position. This was however a false dawn as the inefficiencies of communism merely gave way to the very efficient capitalism – for the rich only. Capitalism has no doubt created immense wealth, but it should also be certified with enriching so few whilst condemning so many to a life of misery
In order to maintain the status quo governments on behalf capitalist elites have offered scraps to the wider public. The minimum wage is an example of this with the debate on raising the minimum wage in the UK paradoxically being led by the right who would be expected to be against such interventionist polices.
Intellectual discourse is also dominated by free market liberals and this has ensured alternatives have little air time and presence. Despite the worst recession since the great depression liberals have continued to argue that capitalism is the best system on offer. Similarly, with the collapse of communism nearing its 25 anniversary, the failure of communism is still present in the minds of many people. The victory in the Cold War for many is proof of capitalism’s superiority be it political, social or economic.
Capitalism’s Achilles heel is its inability to distribute wealth equitably which has only got worse since the demise of communism. Thus hope only lies Muslims and Islam. we as an Ummah need to realise this and take up that challenge.