It's so slow

How long will it take politicians to realise that inequality is bad? That poverty, the measure of inequality, is making everyone poorer?

A very long time, judging by what is going on now.

In a 2007 article the prescient George Monbiot gave us a brief history of the politics of inequality - the political movement that began just after World War II and that was supported by 'American oligarchs and their foundations.' Monbiot makes clear that this movement - we now call it neoliberalism - was specifically in the interests of the rich. The combination of government austerity and the privatisation of anything that was not core government business meant a 'massive shift of wealth, not just to the top 1% [of the population] but to the top 0.1%', returning us to levels of poverty and inequality not seen since the 1920s.

In March George Kerevan, writing about the resignation of Iain Duncan Smith in The National,  wrote about the 'social upheaval' caused by the many years of austerity, of shrinking the state, and said that the 'SNP needs to press on with a radical alternative to the failed neo-liberal agenda'

And this week an article by the International Monetary Fund, highlighted in Saturday's Financial Times, admits that 'increased inequality ... hurts the level and sustainability of growth.' The article picks on two neoliberal policies - free movement of capital across borders, and government austerity. On the first, it advocates some controls to stop short-term rushes of capital into and out of countries. And on the second it says that 'austerity policies not only generate substantial welfare costs..., they also hurt demand—and thus worsen employment and unemployment.'The hot news (for the FT) is that the article uses the word 'neoliberalism' to define these politics; 'the use of the term "neoliberalism" is provocative,' storms the FT. 


How long will it take Cameron and Osborne to wake up and listen to the mood music? How much more poverty, how many more cuts, how many more people sanctioned by the 'benefits' system? How many more wars that drive millions out of their homes and into abject poverty? 

When will they learn that poverty is bad, for all of us? When?

Paper Balls

The Holyrood election is done, so the newspapers are looking for their next big story. They have the Brexit Terror Campaign, but even the Daily Mail can see that stories about quirky regulations from Brussels are hardly setting the readership alight. So we are back to the bump and grind of whose bed was shared by which politician. 

Sex sells.

But it is wholly irrelevant to the measure by which we should be judging our politicians: are they capable giving people a better life? Can they help people out of poverty, with better jobs and better benefits? Can they create a measurably more equal society, reducing the wealth gap?

This is how we should be measuring our politicians. Not by the number of people they have euphemistically 'slept' with, but by the number of people whose lives they have changed for the better.

All the rest is just balls.

Pain in Spain

A report just published by the Valencian Institute of Economic Research and funded, ironically, by a bank foundation shows the horrible results of the 2007-15 economic crisis.

Francisco José Goerlich Gisbert, Professor of Economic Analysis at the University of Valencia has studied the share of income for households in Spain, and the policies that the various governments (national and regional) have applied to income distribution. The results make interesting, and often awful, reading.

His report shows that:

• Household income in Spain has dropped since 2007
• Income inequality (the 'wealth gap') in 2013 (the latest figure available) is greater than it has been since records began. The principal cause has been the worsening situation of the job market.
• 'The challenge for the next few years is to encourage growth and at the same time to reduce inequalities'. Professor Goerlich refers to research by various authors demonstrating that inequalities in income slow down economic growth
• New technology is creating jobs, but only for people who are trained and qualified. Many miss out
• State pension payments are the main route through which money is redistributed from rich to poor. Professor Goerlich underlines the vital importance of the state pension...and then reminds us that Spain will find it increasingly difficult to pay the pension as our population ages
• Unemployment payments (benefits) are the second most important means of redistributing income.
• The 'supply of public services in kind (education and health) is the third [most important] means by which the public sector can improve the distribution of household incomes'

That last point is important here in Catalonia and in Scotland. Both countries offer free state-paid education, and both offer free or almost free higher education. It turns out that this is an important means for redistributing money - in this case in kind - from the rich to the poor. Professor Goerlich demonstrates that including the monetary value of the public services of health 'appreciably reduces inequality' in household incomes. Drawing the parallel with my home country, Scotland's health service and its free or nearly free education are worth fighting for.


We need a 'paradigm shift in economic policy to focus on the quality of life and the wellbeing of citizens, rather than on GDP per head.' In other words we need to move to an economy that shares out the wealth and the growth more fairly; 'Growth is not social sustainable if it is not inclusive,' concludes Professor Goerlich.

Reference:

Goerlich Gisbert, F.J., 2016. Distribución de la renta, crisis económica y políticas redistributivas 1st Edition., Bilbao: Fundación BBVA. Available at: http://www.ivie.es/en/actividades/noticias/2016/libro-distribucion-de-la-renta-crisis-economica-y-politicas-redistributivas.php [Accessed May 17, 2016].

Poor Fashion

Sir Philip Green removed £1.2 billion from fashion retailer BHS before selling it for £1 to "former bankrupt and racing driver Dominic Chappell," says today's Financial Times. At the top end of the fashion business, an already wealthy family enriched themselves further.

The other end of the rag trade is all about poverty.Three years ago, on 24th April 2013, the Rana Plaza factory collapsed in Bangladesh, killing 1,136 garment workers.As Baptist World Aid Australia point out in their third annual Fashion Report, out last week;

"There are presently 14.2 million people in forced labour exploitation and 168 million child labourers scattered across the global economy. Many of this number are forced to work in the farms and factories that feed the apparel industry. For millions of others working in the industry, wages remain so low that they are unable to lift themselves and their families out of poverty." 

Fewer than a third of the companies surveyed were "able to demonstrate that some portion of their workers were earning significantly above the minimum wage."

These two ends of the fashion thread show why capitalism must be controlled. It is, as Cambridge economist Ha-Joon Chang points out in "23 Things They Don't Tell You about Capitalism." So this is a debate about the degree of control. Should we allow the boss of a fashion retailer to swim in luxury while the people who make the clothes he sells sink into poverty?

These two stories - rags and riches - highlight the poverty gap, the growing distance between the poor and the rich. People in Scotland live with this gap every day, whether they are putting a coin into the hands of a poor woman under the Hielanman's Umbrella, or popping into the shops for a new, cheap, t-shirt. 

We can all work, by buying fair trade and supporting fair taxation, to close the gap that is killing the poor.


References:

Chang, H., 2011. 23 things they don’t tell you about capitalism, London: Penguin Books.

 

Nimbalker, G., Mawson, J. & Harris, C., 2016. The 2016 Australian Fashion Report: The Truth Behind the Barcode, North Ryde, New South Wales: Baptist World Aid, Australia. Available at: http://www.baptistworldaid.org.au/assets/Be-Fair-Section/FashionReport.pdf [Accessed April 29, 2016].

Leaving Canna

The folded ruddy face under her felted hat

Stretched and soaked and squeezed into a seven hand-width

With the waulking song, keening Gaelic women

Who are the heart of this circle of Hebridean stones,

Stones carved with cycle symbols – a dog chasing its tail,

And a Mother cradling her Son in an oval niche.

Leaving, I wave and weep, wind driving water from my eyes

As the waves, water cycles, weave a tiny new thread

Into the looping skein of Canna’s history.

Scottish Circles

I am just back from a week in Scotland. A week of talking and walking and island hopping from West to East and back. Walking and talking in circles.



Scotland has so many circles. I sat one night in the candlelit circle of a tiny bar on an island south of Skye, and sang circular Gaelic songs of the waulking. Here was a circle - half the population of the island with a handful of incomers - of people who love the ancient stony roots of the Gàidhealtachd, its history and its legends.



Then I talked with another circle, that might have been on another planet, about the landowners and the salmon fishing proprietors and their fear that the bureaucrats were about to enter their world in the form of regulation. The circle felt distant until we talked of the ghillies, Gaelic-speaking men (universally, men) who kept the rivers from the poachers.



In Edinburgh, with my best friends, I sat in a debating circle, critical of Government (in the proper sense of critical, the good and the not so good) and keen to see more radical policies, to break up power blocs from the landowners to the private schools, to shake up Scotland and put together a modern, egalitarian democracy.



In another home I talked with old friends in high places about life in the upper circle, about golf clubs and committees. Scotland's upper circle is very small, and anyone in this circle knows all its other members.  For hundreds of years its most ambitious members have headed south for the vortex of London, and my old friends are likely to do the same.


I met more circles - the rugby circle, the business circle, the young circles of students and schooling. All of them interlinked so that a person in one can connect to another, but each with their own priorities, dreams, desires and politics.



We sometimes think of the independence debate, or the debate on wealth and poverty, as one-dimensional: 'Yes', or 'No Thanks', 'keep it' or 'share it'. But Scotland is such a wonderfully diverse place, with so many circles of light, that we do well to remember that the 'Yes' or the 'No' come from circles of motives, fears, desires and dreams. We need debates and arguments that cover all the angles for all of these  circles if we are to persuade 51% that it is time to stand upright as a nation.

Number 4

Remember. Mossack Fonseca, of the Panama Papers, is number four. The fourth largest firm in Panama in offshore tax dodging. Not the largest. 

So the 2.9 terabytes of data squirreled out of the firm and now feeding the news is just a small slice of the action. The Legal 500 lists six firms in Panama that they regard as experts in offshore tax dodging. No, they don't use that term, but it's what they mean.

We are losing between £3.1 billion and £34 bn in tax revenues because of evasion.

It is not the poor who are skipping their taxes. As the Panama Papers underline, it is of course the wealthy. When it is the wealthy who are meant to lead by example from Westminster, the system begins to stink.

The OECD says that 27 out of the 34 OECD countries do not require information on the beneficial ownership of companies. That's a cloak over political leaders and business people. Andy Wightman is doing the right thing in digging out these relationships and questioning them.

Time for Westminster to open up. We need to see the tax returns of anyone who is in power (Andy does this each year), to see who owns the shadowy companies that buy and sell property and companies, and to reclaim from the people behind them the money that they owe to our hospitals, our schools and our social services. A proper transfer from wealth, to reduce poverty.