Economic Inequality and Global Elites

What do the global elites think about the issue of inequality (economic disparity)? One clue might be the Global Risks 2011, Sixth Edition. This report is issued by the World Economic Forum –

From Wikipedia

The World Economic Forum (WEF) is a Geneva-based non-profit foundation best known for its annual meeting in Davos, Switzerland, which brings together top business leaders, international political leaders, selected intellectuals and journalists to discuss the most pressing issues facing the world, including health and the environment. Beside meetings, the WEF produces a series of research reports and engages its members in sector specific initiatives

 James Ledbetter writing for Reuters has some thoughts on the subject –

This year’s report makes a big deal about “economic disparity,” which it helpfully defines as “wealth and income disparities, both within countries and between countries.” We used to call this “inequality.” The WEF report rightly points to OECD data indicating real income growth of the top income quintiles in wealthy countries (Finland, Sweden, the United Kingdom, Germany, Italy and the United States) was twice as large as that of the bottom quintiles between the mid-1980s to mid-2000s. The poor may not be getting poorer, but the rich are getting richer at a much faster pace than everyone else. That situation is not only immoral, but dangerous, as it can lead to open conflict between nations and internal political turmoil.

But wait — why is this happening? The WEF report cites “the erosion of employment culture, the decline of organized labor, and failures of education systems to keep pace with the increasing demands of the workplace.” That all sounds plausible, but the time frame cited marks the heyday of the very global governance institutions the WEF seeks to support. You don’t have to accept a causal relationship — though it certainly suggests itself — but at a minimum, global governance institutions have been demonstrably ineffective in addressing the economic structural issues that the WEF now worries about.

I have to disagree on one point. Mr. Ledbetter points out that “the poor may not be getting poorer.” While in these other countries, finland, etc., the poor, the lower classes have kept pace with their previous income. That is not the case in the United States. The middle class here has lost ground, their wages stagnant for three decades and their manufacturing jobs being outsourced as a deliberate policy of the United States government.

I am aware that in an article of that length, he hardly has an opportunity to break it down by country. But I am more local.

To summarize, James Ledbetter’s conclusion, they don’t know what to do about inequality and institutions like theirs do not have the influence to make changes should they suddenly discover the secret of income equality.

When you erode national sovereignty to build international trade and finance, there is no one to deal with issues like income distribution. Now, you might argue that international organizations like the United Nations or the World Economic Forum might fill in the gap. It’s a weak argument. The huge international corporate and financial combines have no intention of yeilding one iota of money or authority to anyone anywhere. And I am cynical enough to believe that military and judicial power trumps economic. If you want to take on an international organization be it organized crime or another kind of organization, use real power, not moral persuasion, not an argument that they should honor stakeholders, you put them in prison, you take their buildings and facilities, you confiscate their money, you leave them no where to hide and you never ever stop chasing them.

Of course, I am not referring to any American corporation.

James Pilant

P.S. The World Economic Forum’s report has been downloaded about 6,000 times. Considering the number of people online, that is not a large number. So I am flying in a high intellectual circles today.

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