Global inequality: Oxfam gets it partly right
Our friends at Oxfam have produced a heavyweight report which demonstrates that inequality is not inevitable, that growth alone is not enough, and that there are alternatives. But while they are right to point out that we can choose whether to have more equal societies or not, they concentrate on the role of the state, and – ironically for an organisation at the heart of civil society – ignore the role of the people. Even the OECD, in its recent report on growing inequality, identified the decline of collective bargaining as a major cause. Taking some of the examples in Oxfam’s report, the drive towards greater equality in Brazil owe as much to rises in the minimum wage and collective bargaining over pay as they do to the Bolsa Familia transfer payments, and South Korea’s increasing equality derives largely from its strong and assertive trade union movement.
Here is a whistlestop tour of some of the global features of what is rapidly becoming the common sense of the age about inequality, and what underpins the current – so far rather superficial – skirmishing between Labour and the Conservatives over ‘ethical capitalism’.
Inequality has been growing in some of the major world economies – developed, emerging and developing – although it has declined in a handful of countries like Brazil and South Korea. There appears to be no correlation between growth and equality: so the argument that growth automatically improves everyone’s living standards is false. Growing inequality is not an inevitable consequence of growth, development and so on, but depends on choices about how society is run: there are policy choices that increase equality or inequality. However, whilst growth does not inevitably produce either growing equality or inequality, there is mounting evidence that growing inequality leads to lower growth, and certainly played a major role in causing the global financial and economic crises.
So what are the solutions? Oxfam identify a number of measures that governments can impose: progressive tax and redistributive benefit systems; the provision of high quality public services; promotion of gender equality; and land reform. But Oxfam’s report missed out on measures which allow ordinary people to make a difference to their own lives: principally the freedom to join trade unions and bargain collectively.
But at least Oxfam are beginning to pose the right questions and identify the right problem – not so much poverty per se, as inequality. As Oxfam International begins to formulate its next strategic plan, maybe they need to take this debate further, and work out what development campaigners can do with trade unions to make sustainable change happen.