This is an odd blog post, but something to ponder.
As most of us can feel our society in the UK and most other countries we can think of are divided and disjointed.
We have Brexit, the far-right, the far-left and nothing much in the middle. Growing income inequality is undermining society – as the 1% and in particular the 0.01% is getting richer the economy they rely upon for the continued wealth and stability is coming apart at the seams. Those at the top appear to be happy to point this out, but only offer piecemeal solutions. They conveniently avoid thorny issues such as international tax regimes purpose-built to benefit them, a fundamental refusal to acknowledge income inequality, low wages, long hours and low productivity. The only solution to them appears to be the mantra of “996” – 12 hours days, six days a week. Let us be clear “996” is the very essence of exploitation, particularly as it’s chief proponent (Jack Ma) is now living in semi-retirement at the tender age of 54.
In the short-term the 1% seem to have responded by paying more for security – Facebook spent $20 million last year protecting Mark Zuckerberg from threats, up from $7 million the previous year.
Protection is an immediate, but ultimately, short-term response to threats – both real and perceived. Some of these threats would be made regardless of the state of the economy and society. However, in a fractured society and a weak economy, the threats grow.
At some point, the threats outweigh the benefits.
It is interesting to see Ray Dalio founder of the hedge fund Bridgewater write a blog post about wealth inequality and the threat to the American Dream. As pointed out by others, his company has benefitted from investing in low-pay industries, such as fast-food.
If wealth inequality stayed at its current (unacceptable) levels, it could be tackled. However, as pointed out by Mr Dalio inequality is entrenching itself, exacerbating the problem and increasing year-on-year. Once the 1% own or control 99% of wealth the only market left to them will be their own 1% – no one else will have any money to buy anything. In the end, the system will eat itself.
With all this said we are still waiting for change.
After the 2008 financial crisis, the 1% received their bailout, and the rest of society assumed the debt and will carry on paying off that debt for decades to come.
This debt burden has inevitably caused governments to reduce spending and investment – retreating to cover only the essentials. Governments appear unable or unwilling to increase spending on health and education – both of which are critical areas for future stability and wealth in society.
We are now living in what could be described as a “governmental vacuum”. Governments have become less about governing countries and more about preserving the status quo and protecting the system that has caused inequality. The 1% will almost always have the ear of those in power – partly because they helped them get there.
However, into this vacuum step those promising easy and quick solutions. People, who say they understand and that if people follow them things will get better, people such as Donald Trump and Nigel Farage. These so-called “men of the people” are anything but – they see an opportunity for power and influence. Their methods and messages owe more to 1930s Germany than the 21st century.
As we become increasingly polarised into tribes, there is the potential for extremism to flourish, organised online and beyond the control of governments and even those that seek to harness and possibly exploit it.
There is a genuine risk that we are heading for a very uncivil society – we will all be losers, but those who lose the most will be the ones who currently enjoy the most.
Reinvesting in our societies is the only sensible long-term strategy open to us – and it must be across all racial lines – starting from the bottom upwards to the middle class.