Does the Richness of the Few Benefit Us All?

Zygmunt Bauman

• Publisher: Polity
• Year: 2013
• ISBN:
  9780745679211
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

It is commonly assumed that the best way to help the poor out of their misery is to allow the rich to get richer, that if the rich pay less taxes then all the rest of us will be better off, and that in the final analysis the richness of the few benefits us all. And yet these commonly held beliefs are flatly contradicted by our daily experience, an abundance of research findings and, indeed, logic. Such bizarre discrepancy between hard facts and popular opinions makes one pause and ask: why are these opinions so widespread and resistant to accumulated and fast-growing evidence to the contrary? This short book is by one of the world's leading social thinkers is an attempt to answer this question. Bauman lists and scrutinizes the tacit assumptions and unreflected-upon convictions upon which such opinions are grounded, finding them one by one to be false, deceitful and misleading. Their persistence could be hardly sustainable were it not for the role they play in defending - indeed, promoting and reinforcing - the current, unprecedented, indefensible and still accelerating growth in social inequality and the rapidly widening gap between the elite of the rich and the rest of society.

1

Just how unequal are we today?

Let me start, however, with a few figures illustrating the grandiosity of those departures.

The most seminal among the departures is the discovery, or rather the somewhat delayed realization, that the ‘big divide’ in American, British and a growing number of other societies ‘is now less between the top, the middle and the bottom, than between a tiny group at the very top and nearly everyone else’.³ For instance, ‘the number of billionaires in the US multiplied 40 times in the 25 years to 2007 – whereas the aggregate wealth of the 400 richest Americans rose from $169 to $1500 billion’. After 2007, during the years of credit collapse followed by economic depression and rising unemployment, the tendency acquired a truly exponential pace: rather than hitting everyone in equal measure as had been widely expected and portrayed, the scourge proved to be ruggedly and tenaciously selective in the distribution of its blows: in 2011 the number of billionaires in the US reached its historical record to date of 1,210, while their combined wealth has grown from $3,500 billion in 2007 to $4,500 billion in 2010. ‘In 1990, you needed a fortune of £50 million to make it into the list of the 200 richest residents in Britain compiled annually by the Sunday Times. By 2008, that figure had soared to £430 million, a near-nine-fold increase.’⁴ All in all, ‘the combined wealth of the world's richest 1000 people is almost twice as much as the poorest 2.5 billion’. According to the Helsinki-based World Institute for Development Economics Research, people in the richest 1 per cent of the world population are now almost 2,000 times richer than the bottom 50 per cent.⁵

Having recently collated available estimates of global inequality, Danilo Zolo concluded that ‘very little data is needed to dramatically confirm that the sun is setting on the “Age of Rights” in the globalization era. The International Labour Organization estimates that 3 billion people are now living below the poverty line, set at US$2 per day.’⁶ As Zolo also pointed out, John Galbraith, in the preface to the Human Development Report of the United Nations Development Programme in 1998, documented that 20 per cent of the world's population cornered 86 per cent of all goods and services produced worldwide, while the poorest 20 per cent of them consumed only 1.3 per cent; while today, after nearly fifteen years, these figures have gone from bad to worse: the richest 20 per cent of the population consumes 90 per cent of the goods produced, while the poorest 20 per cent consumes 1 per cent. It is also estimated that the twenty richest people in the world have resources equal to those of the billion poorest people.

Ten years ago Glenn Firebaugh noted that a long-standing trend in worldwide inequality showed signs of reversing – from rising inequality across nations and constant or declining inequality within nations, to declining inequality across nations and rising inequality within them.⁷ While the ‘developing’ or ‘emergent’ national economies scored a massive influx of capital in search of new ‘virgin lands’ promising a quick profit and populated by cheap and meek labour as yet uncontaminated by the bacillus of consumerism and ready to work for bare-survival wages, workplaces in the ‘developed’ economies vanished at an accelerated pace, leaving local labour forces in fast-deteriorating bargaining positions. Ten years later, François Bourguignon found out that while planetary inequality (between national economies) as measured by average income per head is so far continuing to shrink, the distance between the global richest and the global poorest is continuing to grow, and income differentials inside countries are continuing to expand.⁸

When Érik Orsenna was interviewed by Monique Atlan and Roger-Pol Droit, the economist and novelist winner of the Prix Goncourt summed up the message conveyed by all these and many other similar figures. He insisted that recent transformations have benefited only an infinitely small minority of the world's population; their genuine scale would elude us if we were to confine our analysis, as we used to do only a decade ago, to the average gains of the top 10 per cent.⁹ To comprehend the mechanism of the present, ongoing mutation (as distinct from a mere ‘phase in a cycle’), one needs to focus on the top 1 per cent, perhaps even the top 0.1 per cent. Failing to do so would miss the true impact of the change, which consists in the degradation of ‘middle classes’ to the ranks of the ‘precariat’.

That suggestion is confirmed by every study, whether it focuses on the researcher's own country or comes from far and wide. In addition, however, all studies agree on yet another point: almost everywhere in the world inequality is growing fast and that means that the rich, and particularly the very rich, get richer, whereas the poor, and particularly the very poor, get poorer – most certainly in relative, but in a growing number of cases also in absolute, terms. Moreover, people who are rich are getting richer just because they are rich. People who are poor get poorer just because they are poor. Nowadays, inequality goes on deepening by its own logic and momentum. It needs no other help or kick from outside – no outside stimuli, pressures, or blows. Social inequality nowadays seems ever closer to turning into the first perpetuum mobile in history – which humans, after innumerable failed attempts, have finally managed to invent and set in motion. This is the second among the departures that obliges us to think about social inequality from a new perspective.

As long ago as 1979 a Carnegie study vividly demonstrated what an enormous amount of evidence available at that time suggested and common life experience continued daily to confirm: that each child's future was largely determined by the child's social circumstances, by the geographical place of its birth and its parents’ place in the society of its birth – and not by its own brains, talents, efforts and dedication. The son of a big company lawyer was twenty-seven times more likely than the son of a minor official employed on and off (both sons sitting on the same bench in the same class, doing equally well, studying with the same dedication and boasting the same IQ) to be paid a salary by the age of forty that would put him in the top 10 per cent of the richest people in the country; his classmate would have only a one in eight chance of earning even a median income. Less than three decades later, in 2007, things had got much worse – the gap had widened and deepened, becoming less bridgeable than ever before. A study by the Congressional Budget Office found that the wealth of the richest 1 per cent of Americans totalled $16.8 trillion, 2 trillion more than the combined wealth of the bottom 90 per cent of the population. According to the Center for American Progress, during those three decades the average income of the bottom 50 per cent of Americans grew by 6 per cent – while the income of the top 1 per cent increased by 229 per cent.¹⁰

In 1960, the average pay after taxes for a chief executive at the largest US corporations was 12 times greater than the average wage of factory workers. By 1974, the CEO's salary and perks had gone up to about 35 times the pay of the company's average worker. In 1980 the average CEO was already making 42 times as much as the average blue-collar worker, doubling ten years later to 84 times. But then, in about 1980, a hyper-acceleration of inequality took off. By the mid-1990s, according to Business Week, the factor was already 135 times; in 1999 it had reached 400-fold and in 2000 jumped again to 531 …¹¹ And these are only a few of a fast-growing number of similar ‘facts of the matter’ and of figures attempting to grasp, quantify and measure them. One can go on quoting them endlessly, as there is no shortage of new figures which each successive research study adds to the mass already accumulated.

What are the social realities, however, which those figures reflect?

This is how Joseph Stiglitz sums up the revelations from the dramatic aftermath of arguably the two or three most prosperous decades in a row in the history of capitalism that preceded the 2007 credit collapse, and of the depression that followed: inequality has always been justified on the grounds that those at the top contributed more to the economy, performing the role of ‘job creators’, but ‘then came 2008 and 2009, and you saw these guys who brought the economy to the brink of ruin walking off with hundreds of millions of dollars’. Most obviously, you couldn't this time justify the rewards in terms of their beneficiaries’ contribution to society; what the latter contributed was not new jobs, but lengthening lines of ‘redundant people’ (as the jobless are now dubbed, not without sound reasons). In his book The Price of Inequality, Stiglitz warns that the US is becoming a country ‘in which the rich live in gated communities, send their children to expensive schools and have access to first-rate medical care. Meanwhile, the rest live in a world marked by insecurity, at best mediocre education and in effect rationed health care.¹² This is a picture of two worlds, with few if any interfaces or meeting points between them, and so also with their intercommunication all but broken (in the US as much as in Britain, families have started to set aside an ever greater part of their income to cover the costs of living geographically as well as socially away – the further away the better – from ‘other people’, and particularly the poor among them).

In his sharp and brilliant vivisection of the present state of inequality, Daniel Dorling, Professor of Human Geography at Sheffield University, puts flesh on the bones of Stiglitz's skeleton synthesis, while simultaneously raising the perspective from a single country to the planetary level:

The poorest tenth of the world's population regularly go hungry. The richest tenth cannot remember a time of hunger in their family's history. The poorest tenth can only rarely secure the most basic education for their children; the richest tenth are concerned to pay sufficient school fees to ensure that their children need only mix with their so-called ‘equals’ and ‘betters’ and because they have come to fear their children mixing with other children. The poorest tenth almost always live in places where there is no social security, no unemployment benefit. The richest tenth cannot imagine themselves ever having to try to live on those benefits. The poorest tenth can only secure day work in town, or are peasants in rural areas; the richest tenth cannot imagine not having a secure monthly salary. Above them, the top fraction of a per cent, the very richest cannot imagine surviving on a salary rather than on the income coming from the interest that their wealth generates.¹³

And he concludes: ‘as people polarize geographically, they begin to know less and less of each other and imagine more and more’.¹⁴

At the same time, in his most recent statement, called ‘Inequality: the real cause of our economic woes’, Stewart Lansey falls in with the verdicts of Stiglitz and Dorling that the power-assisted dogma that credits the rich with rendering service to society by getting richer is nothing more than a blend of a purposeful lie with a contrived moral blindness:

According to economic orthodoxy, a stiff dose of inequality brings more efficient and faster growing economies. This is because higher rewards and lower taxes at the top – it is claimed – boost entrepreneurialism and deliver a larger economic pie.

So has the 30-year experiment i...

Table of contents

• Cover
• Title page
• Copyright page
• Epigraph
• Introduction
• 1: Just how unequal are we today?
• 2: Why do we put up with inequality?
• 3: Some big lies on which a bigger one floats
• 4: Words against deeds: an afterthought …