Sat, Jan 15, 2005 - Page 9 News List

Help the poor restrain the rich and reduce the widening chasm

Sweden is proof that the neoliberals are wrong about how to reduce poverty around the world. But the leaders of the UK -- and other G8 countries aren't listening

By George Monbiot  /  THE GUARDIAN , LONDON

"Does not the response to the massive tidal wave in Southeast Asia," UK Chancellor of the Exchequer Gordon Brown asked on Jan. 6, "show just how closely and irrevocably bound together ... are the fortunes of the richest persons in the richest country to the fate of the poorest persons in the poorest country?"

The answer is no. It is true that the very rich might feel sorry for the very poor, and that some of them have responded generously to the latest catastrophe. But it is hard to imagine how the fate and fortunes of the richest and poorest could be further removed. The 10 richest people on earth have a com-bined net worth of US$255 billion -- roughly 60 percent of the in-come of sub-Saharan Africa. The world's 500 richest people have more money than the total annual earnings of the poorest 3 billion.

This issue -- of global inequality -- was not mentioned in either Brown's speech or British Prime Minister Tony Blair's simultaneous press conference. Indeed, I have so far failed to find a reference to it in the recent speeches of any leader of a G8 nation.

I believe that the concern evinced by Blair and Brown for the world's poor is genuine. I believe that they mean it when they say they will put the poor at the top of the agenda for the G8 summit in July. The problem is that their concern for the poor ends where their concern for the rich begins.

There is, at the moment, a furious debate among economists about whether global inequality is rising or falling. No one disputes that there is a staggering gulf between rich and poor, which has survived decades of global economic growth. But what the neoliberals -- who promote unregulated global capitalism -- tell us is that there is no conflict between the whims of the wealthy and the needs of the wretched. The Economist maga-zine, for example, argues that the more freedom you give the rich, the better off the poor will be. Without restraints, the rich have a more powerful incentive to generate global growth, and this growth becomes "the rising tide that lifts all boats." Countries which intervene in the market with "punitive taxes, grandiose programs of public spending, and all the other appara-tus of applied economic justice" condemn their people to remain poor. A zeal for justice does "nothing but harm."

Now it may be true that global growth, however poorly distribu-ted, is slowly lifting everyone off the mud. Unfortunately we have no way of telling, as the only current set of comprehensive figures on global poverty is -- as researchers at Columbia University have shown -- so methodologically flawed as to be useless.

But there is another means of testing the neoliberals' hypothesis, which is to compare the performance of nations which have taken different routes to development. The neoliberals dismiss the problems faced by developing countries as "growing pains," so let's look at the closest thing we have to a final result. Let's take two countries which have gone all the way through the development process and arrived in the promised land of prosperity. Let's compare the UK -- a pioneer of neoliberalism -- and Sweden, one of the last outposts of distributionism. And let's make use of a set of statistics the Economist is unlikely to dispute: those contained within its own publication, the 2005 World in Figures.

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