Sunday, 14 January 2018

Inequality and economic slavery

We have been working our way through King (1964) “Why we can’t wait” on the civil rights actions in Birmingham, Alabama, USA. King describes how the authorities fought to hold on to their segregated society in the face of nonviolent direct action. However, in today’s reading, it was comment that he made about a company who had major operations in the Birmingham area but whose headquarters were in New York that prompted this post. King says “Profits were not affected by racial injustice; indeed, they were benefited. Only people were hurt, and the greatest single power in Birmingham turned its back” (p 133).
As I reflect on inequality and economic slavery, I can see that I could adapt this statement to apply to many of the decisions being made by governments and business leaders. The company had said that it had “fulfilled” its “responsibility in the Birmingham area” (p 133) when in reality they had changed nothing and only benefitted from the segregationist policies.
Our capitalist system says that things are alright provided the “profit” is not impacted. Change only came in Birmingham, Alabama when the nonviolent direct action began to impact the profits of companies and even then the authorities sought to apply force to coerce the protesters to accept existing policy.
In the British media, the gender pay disparity has again hit the headlines in part because high profile females are protesting to not being paid as much as men for the same job. I agree with their claims, they should receive the same pay but I would contend that there is a more uneven pay differential that is being completely ignored and it is this second pay differential that leads to inequality. I no longer believe that we should be judging the value of skills as a way of differentiating how much we should pay people. The argument for the skills pay differentiation is “market forces”. Supposedly it is easy to recruit workers for low skilled jobs. There are more people competing for these jobs so the pay is low. If I listen to some of the anti-Brexit discussion, this appears not to be true. People do not want the low paid jobs and avoid taking them on. The low paid jobs have no future and do not guarantee security. They lock you in as a slave for life. As a result employers are looking to immigrants who will just about take any job to fill these lowed paid positions. If market forces were at play then the pay would rise to attract local workers to take up this work but that doesn’t happen. The market doesn’t work. Pressurising the low paid to take lower wages in order to maintain profit is what drives the economy.
However, the pay disparity between the low paid and the high paid ensures the unequal distribution of wealth. It ensures that a proportion of the population stay enslaved to the economic system. With government policies being made based on the average or above average income, a large percentage of the population are unable to achieve a viable living standard and they are certainly unable to put aside what is needed for a pension. I am sure this claim could easily be verified from the national statistical databases. The end result is that a large proportion of the population is enslaved to the work that they can obtain or they remain locked in to receiving government handouts.
I believe that it is not simply time that the gender pay gap was resolved. It is time that we overcame pay prejudice and rewarded everyone equally for the time that the put in. It is also time that we implemented a basic income for all and to get rid of the discriminatory social security systems that are implemented around the world. Inequality is not the result of people failing to put in the effort. Inequality has its roots in pay inequality and the basic operation of a market driven economy.
Profits are not affected by pay disparity; indeed, they are benefited. Only people are hurt, and the greatest single power for achieving equality has turned its back.” This power is governments and business owners. We could have a completely different system if the focus was on greater equality and not difference.
Yes, I can hear the cries that we cannot afford to do this but a lot of these cries show a complete lack of understanding of money and its creation. We do not have enough money because we have turned money creation into private debt and focussed on being able to pay. Governments ability to create money for essential works is being hampered by attempting to treat governments like companies and declaring that they have to live within their income (i.e. tax). If you want growth in the system then there needs to be an expansion in the money supply and that expansion has to be without the debt risk. The only entity that can expand the money supply without the debt risk is the government through its central bank but that is for another blog.


 Martin Luther King, Jr. (1964) Why we can’t wait. Boston: Beacon Press.

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