Doughnut Economics
Business Environment Finance Politics

A new and delicious way of delivering 21st Century economics – By Doughnut

I was inspired to write this as a result of reading Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth. I was hoping it would help me understand the subject (beyond my O Level 2), and a quick peek at a review told me it was written in a really good and understandable style. It was fun too.

The Neoliberal script that economists have been using for the last 60 years would have us believe that Inequality is inevitable in the march of economic progress and growth. Of course it would do, it was written by those from already rich and powerful backgrounds.

The whole area of Inequality has been deliberately played down by economists and politicians over the years because the perception is that it’s the “Thin end of the Socialist wedge”, driven by the usual suspect, The Politics of Envy, BOOM! There I said it, oooh scary bogeyman stuff!

Check this out and see what I mean

‘Of all the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution,’ wrote the influential Chicago school economist Robert Lucas in 2004

All well and good when you are an “Influential Economist” and your life is doing very nicely, running the Chicago School, but not so funny when you are trudging to the Foodbank to top up your meagre supplies. A good measure of the later Neoliberal types too, scared shitless of the word “Inequality” lest the public start asking how come 8 people control the wealth of half the planet.

Let’s have a closer look at some of the effects of inequality then, because as you will see, it’s not all about money, though that may well be the root cause.

Society

Thatcher told us there was no such thing as Society, we are all individuals. As was often the case, Thatcher was talking out of her backside using a well-rehearsed script. Her motivation came from the burning itch she had to dismantle public services and sell them all off to the highest bidder.

Societies have their foundations removed by income inequality. A nations Social wellbeing is not all about wealth, and in a study for their 2009 Book, The Spirit Level, Richard Wilkinson and Kate Pickett studied a range of countries known for their wealth and high incomes.

They found that the most unequal countries suffered from, “more mental illness, drug use, obesity, teenage pregnancy, prisoners, school dropouts, community breakdown, a lower life expectancy, lower status for women, and lower levels of trust”, (Imagine if a government set out to deliver this as a manifesto). These traits are not the sole province of poor people either. You can have all the money you like, but when a big black cloud of depression gets in your head a $Billion won’t help you.

As if by magic, the reverse is also true, according to the study. The countries that have obviously healthier and happier populations and score higher on all the above areas are also those countries that have less inequality. Remember, these are observations of the real world, not a political wish list.

Democracy

Pretty obvious to most people that the type of person who wishes to accumulate $Billions has another game in sight, the Power game, just take a look at Rupert Murdoch a man that just cannot help himself, he must interfere in politics, and he must always be the winner, personally I find him deranged in the extreme.

With vast wealth comes the deep mining of the democratic process. American politicians are elected based on the amount of money they spent on their election campaign, and Trump is the prime US example. Almost no major US politician in the circus todays is not a multi-millionaire, and I lie awake nights pondering why they would have the interests of the “People” at heart? Why in blue blazes would they?

Let’s be honest, the US political arena is a sham, a Shell Game, Find the Lady, “Notice my hands never leave my wrists” kind of sleight of hand trick, now you think you have Democracy, now you dont.

Tens of Millions of dollars are spent to get a government to drive policy that secures the donors access to the corridors of power. From there the $$$billion Think-tank/Lobby Industry goes to work getting the prepaid politicians to pass laws and go to war to secure more money to buy more politicians and keep on going to war. It’s worth noting here that much of this is done in secret too, the public are deliberately not informed to ensure the path is even smoother, after all we can’t have all that Occupy shit slowing down the cash flow.

The Environment

Income inequality has influence on the worlds environmental issues too but a lot of people don’t want to make that connection for again, it interferes with the money making process.

Inequality makes us all want more, we are in a race to get the biggest SUV, the biggest surround sound home cinema, the longest swimming pool, and we are told 24/7 that if we work hard we can have all these things and more, You Too can be George Soros, “Buy this little App here and trade along with George”!

“It’s the boys with the most toys who wins” the celebrated Yuppie bumper sticker states. It goes back quite a while because I first saw it 35 years ago. I was in morning rush hour traffic in London Mid 1983, when a Rolls Royce, driver red with rage, forced his way by me on the inside using the Bus Lane. As it passed slowly by with 2 wheels on the pavement (I wasn’t going to make it any easier for him) I saw that sticker about Boys Toys and damn near drove into the back of him.

As luck would have it a bus was coming, and we all mover over a bit to let it through. The Bus driver must have seen the sticker too and was not impressed. The Rolls moved forwards a few yards and came abreast with a bus stop, and from behind the bus shelter a very tall City of London Police officer flagged the Rolls down. I laughed. The Bus Driver laughed. The policeman saw us laughing and noticed me pointing to the back of the Rolls. The policeman saw the sticker, looked at me and he was laughing too, as he pulled out his notebook.

I digress,

In this rush to buy up the entire stock of the world’s resources in one single decade, we have used every trick in the book to maximise profits, for that is the only thing that business must do, according to the neoliberal doctrine. Outsourcing work to China was a favourite, because they were cheaper by far, having no pesky Employment regs or Environmental controls to worry about. In that fashion it could be said that we outsourced our sweatshop labour and atmospheric pollution too. It’s called externalisation in the trade, and it destroys things. Oceans, Rivers, landscapes and the Atmosphere can all bear testament to the rigours of outsourcing

A study done of the 50 states in the USA has shown that those with gaping inequalities of Income and ethnicity have weaker environmental regulations and as a result have suffered greater ecological degradation.

A second study of 50 different countries, shows that the more inequality there is, the more likelihood that the biodiversity of that country will be under threat.

 

Economies

Inequality also influences economic stability, and not in a good way, despite all the excuses made for it. Trickle-down economics is an outright lie we have been fed by people at the top who are busy offshoring all their money to ensure ii trickles nowhere, not anybody’s Taxman, and not the likes of you and I.

I think we all remember the 2008 Crash, plenty of people are still suffering from it. Highly paid entrepreneurs gambling on bundles of debt that low paid workers had taken out to try and advance their lives, I believe it’s called ‘Living the American dream’, and this one became a nightmare. What could go wrong?

A couple of IMF Economists, Michael Kumhof and Romain Rancière, studied the 25 year run up to the 2008 crash, and guess what?

They found uncanny similarities to the decade-long run-up to the Great Depression of 1929: both eras saw a large increase in….

  • The income share of the rich,
  • A fast-growing financial sector,
  • A large increase in the indebtedness of the rest of the population

All of which culminated in financial and social crisis”

 

To summarise

Inequality has serious, deep and lasting negative effects on the entire fabric of global societies. It’s a myth that Inequality is some sort of pain we have to go through to reach the reward of all of us becoming better off, Inequality is entirely unnecessary to allow that development, in fact it’s an obstruction to progress in a very big way.

Millions of people have their personal growth and development stunted by this parasitic disease, their potential never getting unlocked. Millions spend most of their waking day simply trying to scrape by, when they could very well have become schoolteachers, engineers or doctors making a major contribution to the planet.

We were not put on this planet to service billionaires and scratch the dirt to find our basic daily needs, we abolished slavery a long time ago, so let’s put the neoliberal model back in the box, in human terms it’s too bloody expensive

Tony Broomfield
Editor-In-Chief

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