Thursday, 23 October 2014

Shrinking the Gap



Shrinking the Gap

As a warning, this solution to economic problems will never happen because it is an idealistic view of something too set in stone to change. Though many may think of it being socialist, it will still enforce the capitalism idea, but it will shrink the gap between the rich and poor. Sometimes the simplest solution can actually be the answer to a huge problem. Starting at the most recent recession is the best way to look at it. After the financial world collapsed, money was tight which halted spending. While people were begging for pay increases in the times of austerity, companies were 'tightening their belts' whilst simultaneously blaming the majority of the working class for not spending enough in the economy to correct it. What makes this such an horrific statement is the fact that those rich people, the 1% population, were complaining about the lack of spending in an economy where they hold 40% of the economy's wealth - the 0.01%, a NET worth of over $100m, control 11.1% of the US's wealth.[1] [2] [3] [4] [5] [6] [7] [8] [9] In America, that is. It is even highlighted in the end credits of the film The Other Guys.[10] It may not be as drastic elsewhere, but it still is as disproportionate - although this article suggests it is worse than we think.[11] Simply blaming the working class for not spending money on the economy that you control, then denying a pay increase as it is a recession, is a logical fallacy.  

Now what seems basic is a simple shrinking of the gap. The economy is in the state that it is because that 1% are static with the majority of their wealth, meaning it does not get pumped into the economy. If they were stimulate the economy by actually spending instead of sitting on it to invest in the future to make even more money, then the economy would not have remained stagnant for so long. The divide between the rich and poor needs to be there in a capitalist society. It also instils ambition in the population, constantly striving to become better, to improve the world and be rewarded for it. There is no need for the divide to be so drastic. With only 1% of the population having such monetary control, means that their restraint in spending damages the economy of the entire population, giving power to those that really should not have it. Having all this money encourages the rich to disregard everything else but profit, causing the economy to become static, while they look for a way to increase the wealth of themselves and/or their companies/conglomerates.

This has a detrimental effect as well on the planet's actual health. Now, this may sound like hippy-free-love stuff that makes people roll their eyes, but the planet's actual environment is important because we like living, essentially. Most of us, anyway. Oil companies claim famine in terms of oil to justify their amplification of prices, but if they were simply more efficient then we would have a significant amount more of oil. For example, the Niger Delta river has been filling up for years with oil, but it is simply cheaper to let it drift there, allowing pirates to fight for it, shooting at each other and accidentally igniting it, as it is oil.[12] [13] If people actually thought for once about perhaps spending more to have even more product in the long run, for the benefit of a world reliant on oil, then there would be no need to claim that there is less oil. There is simply less oil because of instances like this. It has gone entirely to waste. This isn't reflective of problems like the BP oil crisis, but that happened again because of a money saving exercise to please shareholders.[14] Simply put: fuck the shareholders for once and think about the bigger picture.

If the gap was shrunk significantly, more money would be in the economy. That constant flow would help stimulate it, drastically improving the quality of life for the majority of people. In a more idealistic view, it could possibly lead to a lower unemployment rate too. That stimulation would mean we could rejuvenate the public sectors, hiring more staff because it would have created functioning and efficient public services, as they would be a non-profit organisation. Imagine hospitals if the Conservatives were not trying to constantly privatise it to exploit the profit possibilities that plagues pharmacology.[15] Universal healthcare is not only a human right but a necessity. Healthcare would be improved upon if the administrators did not receive such absurdly high wages, while nurses are left to struggle on an income as low as £14,000 a year in 2014. (Estimate of my mother's annual wage: a full-time working auxiliary nurse) That is another topic for another time. If the money that came into the public sector was put back into it, it would be able to improve its service dramatically. No more horror stories in tabloid newspapers that condemn an underfunded NHS. Services would run for the people, rather than for the money.

"If" has plagued this post because it is an idealistic hypothetical, but financial equality should be a given. If the wage gap was shrunk so that 45% of the population controlled 55% of the nation's wealth, the boost in the economy would be revitalising. That would mean 55% of people would be able to spend even more in a society that has adverts begging for people to spend. Everyone is a winner. As there would be a cap, a limit, companies and people could possibly think about everything other than their virtual bank balance or NET worth. Less greed would mean that the exploitation of the world for short-term gain would no longer be worth it. People are fighting for a bigger bank balance that will not carry on with them after they pass away. It is better to preserve the future for future generations rather than destroy it for a brief monetary gain that is fleeting in something much larger than one person. Companies must stop avoiding tax in nations they profit in. Especially by a company that then proudly advertised that 77% of the emergency services use Vodafone[16], after getting their tax bill cancelled by the Chancellor of the Exchequer and HMRC boss Dave Hartnett.[17] Basically an advert laughing at their exploitation of the public sector. Vodafone seem to be getting worse with each year too.[18] George Osborne must not turn the cheek or cancel the debt, then make cuts to the public sector that services the working class devoid of wealth, because the companies want to maximise their profits which are already extraordinary.[19] [20] [21] [22] [23] [24] [25] [26]A man who is in charge of our tax bills and loopholes, used those loopholes himself to get out of paying tax.[27]  

Idealism should not be a pejorative. We should strive to obtain the highest quality of life. It is a shame that this would not happen as it would need to be globally co-ordinated. Like a UN initiative - which would not happen, but that scale of global regulation in a world becoming more and more globalised. Essentially this has been a utopian dream post, about a world not interested in its own wallet, but with a consideration to everyone and everything. Why is that seen as abnormal? Why is that condemned as negative?  



References

[1] http://www.businessweek.com/articles/2014-04-03/top-tenth-of-1-percenters-reaps-all-the-riches
[2] http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105
[3] http://thinkprogress.org/economy/2011/10/03/334156/top-five-wealthiest-one-percent/
[4] http://www.forbes.com/sites/moneywisewomen/2012/03/21/average-america-vs-the-one-percent/
[5] http://www.epi.org/publication/unequal-states/
[6] http://www.huffingtonpost.com/2013/09/10/pay-gap-between-1-percent_n_3900373.html
[7] http://www.lcurve.org/
[8] https://www.youtube.com/watch?v=QPKKQnijnsM
[9] http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/06/this-viral-video-is-right-we-need-to-worry-about-wealth-inequality/
[10] https://www.youtube.com/watch?v=3yBfWz2bSOQ
[11] http://www.bloomberg.com/news/2014-08-06/the-1-may-be-richer-than-you-think-research-shows.html
[15] http://www.theguardian.com/healthcare-network/2014/aug/06/privatisation-ripping-nhs-from-our-hands
[16] https://www.youtube.com/watch?v=F8PohtcIA88
[17] http://www.theguardian.com/commentisfree/2010/oct/22/vodafone-tax-case-leaves-sour-taste
[18] http://www.independent.co.uk/news/business/news/vodafones-84bn-tax-avoidance-bonanza-nothing-for-taxpayers-in-verizon-deal-while-bankers-share-500m-in-fees-8794169.html
[19] http://www.ukuncut.org.uk/
[20] http://www.theguardian.com/business/shortcuts/2012/oct/17/boycotting-tax-avoiding-companies
[21] http://www.bbc.co.uk/news/magazine-20560359
[22] http://www.ibtimes.co.uk/tax-avoidance-public-accounts-committee-pac-hmrc-461647
[23] http://www.independent.co.uk/news/uk/politics/eurobonds-scandal-the-high-street-giants-avoiding-millions-in-tax-8897591.html
[24] http://realbusiness.co.uk/article/25034-six-companies-that-avoid-paying-their-taxes
[25] http://www.thisismoney.co.uk/money/news/article-1711339/Revealed-Tax-havens-of-the-top-20-UK-companies.html
[26] http://www.ethicalconsumer.org/boycotts/boycottslist.aspx
[27] http://blog.38degrees.org.uk/2010/10/28/tax-avoidance-george-does-it-too/