Economic model

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While it has long been clear that the global economic model is not working for everyone, the rate of wealth accumulation by a small minority is now breathtaking, if not downright obscene.

As the situation only worsens with the economic impact of the war in Ukraine – which has added to the effects of the Covid-19 pandemic – could we be heading towards mass revolts triggered by a need? desperate for change?

War causes food shortages, with the world’s poorest hardest hit. Although the full impact is yet to be felt, the number of severely food insecure people has already “doubled from 135 million to 276 million” in just two years, leaving “nearly 50 million on the verge of starvation “.

Although the countries of the South are the most affected, the poorest communities in the richer states are also affected. Here in the UK, where millions already live near the edge, there has been an increase in the need for food banks as many are pushed into critical need. Many schools located in more deprived areas are obliged to provide breakfasts every morning, in particular to avoid having to teach hungry children who cannot concentrate.

Meanwhile, the rich are getting richer. During a three-month period in 2020 – which coincided with the start of the pandemic – the world’s 2,189 billionaires then increased their wealth by 27.5% to $10.2 billion, according to the private bank. Switzerland UBS. This represented a 70% increase in their wealth in just three years.

Two years later, there are now 2,668 billionaires. Just last week Britain’s Sunday Times published its annual ‘rich list’ of the country’s richest – reporting that the ten richest individuals and families have a total of £182billion.

In this context, two questions arise. Why has the global gap between rich and poor widened so much? And why hasn’t there been a bigger uprising against her?

This last point is particularly puzzling, given that our global system has seen such an increase in global wealth over the past 75 years. After all, after the end of the Second World War, many Western countries made great efforts in public services, developing vastly improved health systems, public education, housing and basic social assistance for the most marginalized. .

What has happened since? The answer is widely recognized as “neoliberalism,” an approach whose essence is that the true foundation of economic success is strong and determined competition, which a political system must work towards to have any chance of success.

This approach was developed in the 1950s, with the work of economists such as Friedrich Hayek and Milton Friedman, and has since been shaped by a network of more than 450 right-wing think tanks and campaign groups.

Neoliberalism is aided by a tax system designed to benefit the most prosperous; firm control of organized labor to minimize opposition; and the maximum privatizations of transport, public services such as energy, water and communications, housing, health, education and even security.

There are obviously losers in this system, but usually enough wealth will “trickle down” to prevent serious opposition. It is a line of thought that can reach the fervor of a religious belief and is certainly best considered an ideology.

The shift to neoliberalism was spurred by the huge economic upheavals that followed the oil price hikes of 1973-74 (more than 400% in eight months). Stagflation became the order of the day, and in the UK and US, key elections at the end of the decade brought in the Thatcher and Reagan administrations.

Both newly elected leaders were convinced of the need to embrace the new thinking. Throughout the 1980s, the United States firmly believed in the need to accelerate tax changes and financial deregulation, while Britain sought to control labor unions and oversee large-scale privatizations of corporate assets. the state – Thatcher’s mantra being “there is no alternative”.

Excerpt: “Are we heading towards mass revolts to overthrow the global economic model? »

Courtesy of Commondreams.org

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