Saturday, November 17, 2018

Why Inequality?

According to a 2017 Oxfam report, the eight richest people in the world own as much wealth as the poorest half of the world. The report blamed aggressive wage restraint, tax dodging and the squeezing of producers by companies as the principal causes for the inequality.

A 2014 study by Princeton Professor, Martin Gilens and Northwestern University Professor Benjamin I. Page found that in the U.S., the developed nation with the highest degree of income inequality, public opinion has almost no effect on government, but the opinion of economic elites does.

“There is somewhat of a conflict between capitalism and democracy,” said Professor of Economics Robert G. Williams. “Particularly, when the inequalities of capitalism are in conflict with the egalitarian element of democracy. Everyone is supposed to be equal in democracy. As inequality becomes increasingly a problem, there is no way that is not going to undermine the democracy...Wealth inequality is transmitted from generation to generation,” Williams said. “What we are increasingly finding, is that the zipcode you grow up in, largely will influence what your economic prospects are.”

Many companies have revenues which exceed the revenues of nation states. Several multinational corporations now maintain revenues which exceed the GDP of states. According to data from the World Bank, Walmart’s revenue reached $482 billion in 2016. Poland’s GDP in 2016 was $470 billion. Exxon Mobil maintains a revenue almost as high as the GDP of Chile.

“In terms of international investment, corporations have the upper hand in any bargaining relationship, whether that’s a developed country or a less developed country.” said Professor of Political Science Ken Gilmore. “Basically, the companies hold an auction, where countries must bid against one another for their investments,” Gilmore said. “The countries who offer the most “freedom” are the ones who get the investment.”

No comments: