Healthy Society Archives

Joseph Stiglitz

Prof Joseph Stiglitz

On Tuesday night (July 8) I attended the lecture of the Nobel-prize winning economist, Professor Joseph Stiglitz. The central theme of his lecture was not only the cost to human society from the growth in inequality, but that rather than being caused by economic factors, this was largely the result of deliberate policy and politics.

The prize for the highest inequality in the world went to surprise, surprise – the United States. In the last 30 years (Since the Reagan administration actually) the share of income to the top 1% is nearly one quarter all U.S. income. And Australia is experiencing a similar trend.

It’s often argued that if we allow for the “trickle down” effect, part of the wealth from the top 1% will trickle down to the bulk of the population. But according to Stiglitz, the trickledown theory simply hasn’t worked. Median income hasn’t grown in the U.S. Today it’s lower than 40 years ago. The average American worker is struggling to just keep up with what their parents were earning. And NO it’s not because we haven’t been productive. Productivity hasn’t stagnated over the last 30 years. It’s steadily grown. What we are seeing is in fact a growing gap between productivity and wages.

In the U.S., the rewards of increased productivity haven’t been shared amongst the bulk of the working population. In Australia, while the average wage has kept pace with economic growth, the minimum wage has fallen behind, as have unemployment benefits and most government pensions. In the U.S. 95% of the increase in incomes since the GFC has gone to the top 1%. One family in America, the Waltons (who founded Walmart), have more wealth than the bottom 30-40% of Americans. In Australia, the richest seven people hold more wealth than the bottom 20 percent of the population (Close to 2 million people).

America has traditionally been seen as the “Land of opportunity”, but as Stiglitz points out, even in terms equality of opportunity, America ranks the worst. Australia apparently does much better because of its education system.

The Price of inequality
Even the IMF acknowledges that inequality ultimately weakens our economies. Ultimately income inequality impacts on all aspects of people’s quality of life: life expectancy, access to education, opportunities for upward mobility and even access to the political process. The last factor is most evident in the amounts of money that are used to lobby politicians, especially when you consider the billions that were spent on the last U.S. presidential campaign. If you think about it, diminished access to the political process (or think of it as political inequality) is probably the most serious impact from income inequality. If our political representatives have been ‘bought’ our hopes of effecting changes in our society are greatly diminished. We are in effect losing our democracy.

The Causes
And as to the causes of this inequality Stiglitz puts the blame largely on the policies and politics that are at play in Western countries. Stiglitz made reference to Australia’s current political leadership’s desire to emulate the U.S. He singled out the charge on visits to the doctor. The Abbott government also wants to change indexation arrangements for pensions and social security payments. This will mean pensions and other payments will fall further behind.

What about all that debt that the U.S. and Europe hold? Surely that’s an impediment to economic growth and makes government spending cuts necessary. Interestingly, U.S. debt after the 2nd World War was 130% of the GDP and yet the most rapid growth in the U.S. economy came in the period after the war.

What should be done
So what were Joseph Stiglitz’s suggestions, at least for Australia? Firstly that Australia (and other nations) needed to stop emulating the U.S. and protect their education and health systems. We need to stop selling our resources so cheaply. Stiglitz made the comparison between Australia and Norway, which has managed to build a substantial national wealth fund from its oil resources over the years. It was suggested we auction our mineral resources in the same manner we auctioned the electromagnetic spectrum to the communications providers. We also need to tax multinationals like Google and Amazon on the basis of their sales, capital invested and activity here. And governments need to discourage rent-seeking and monopoly activities and encourage full employment.

You can view the video recording of Stiglitz’s lecture at the Sydney Town Hall from here, and his appearance on ABC’s Q and A. Also check out these articles in the newspapers:

Joseph Stiglitz packs out Sydney Town Hall

Joseph Stiglitz warns on ‘free’ trade deals

In addition, the Australia Institute has released its own paper on inequality in Australia: Income and Wealth Inequality in Australia. It highlights the fact that the top 20% of people have 5 times more income than the bottom 20% and hold 71 times more wealth.
Till next time
Cheers
Anthony

A series of workshops is commencing in Sydney this weekend that deal with some of the most pressing issues of our time: globalization, surveillance and privacy, and genetic modification. Well worth attending. The flyer below has all the details.

Cheers

Anthony

Time at Hand workshop flyer

Book Review: Cancel the Apocalypse

CancelTheApocalypseYou could be forgiven for thinking that there is a dearth of good ideas and alternative thinking, to deal with the social, economic and environmental woes of the world. Only just recently I read how students in Economics at the University of Manchester were in a state of near rebellion, demanding that alternatives to free-market economics be also taught and discussed. On top of this the mainstream media (papers, TV and radio) are almost entirely dominated by large corporate interests. It’s little wonder we get few alternatives to the status quo.

But folks the good ideas and alternatives are definitely out there. A year ago, I reviewed Richard Murphy’s fabulous book The Courageous State. Now just recently I finished reading a book by Andrew Simms – Cancel the Apocalypse. Great title eh?

In essence, Andrew’s book is a response to the doom and gloom – how we can and MUST cancel the apocalypse. This is a book packed full of ‘ammunition’ against the basic ideas and concepts of neoliberal and free-market thinking as well as materialism. In parts I found it a little too drawn out and found myself saying “Ok Andrew, I get your point. Now can we move on?” I think he could have made the chapters smaller and divided it into meaningful sub-sections. But overall I think it’s well thought out and argued. I initially read a public library copy of this book, but I thought this book was so useful and important, that I should have my own copy. This is a book I will want to refer back to again and again. It’s also packed full of great references and leads to other works and research.

Here’s a taste of some of the things covered in the book:

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How many times do we hear people say “what can I do to change the world, to make it a better place? I’m only an individual”.  Well it’s often said that for things to change, first we must change. We underestimate the effect that transforming and changing our own lives has on people around us.

Be The Change is a seminar that I think will move people in that direction, providing both inspiration and practical ideas for people to use in their lives. For those of you who can make it along to the dates below,  I strongly urge you to make the effort, as it promises to be an inspiring and thought-provoking day.

Gavina and I were involved with Fr Charles Ogada back in 2011, when we helped sponsor a water tank and bore system for his community. This water project delivers water to over 5,000 people and is as we speak, being expanded to deliver water to surrounding districts.  Fr Charles has since that time, also helped build a school and small orphanage for his district. There’s no stopping this guy. The other speakers, Dr Ron Farmer and John Fitzgerald are also not to be out-done, bringing much experience and wisdom from their respective backgrounds. For that reason I encourage you all to join us in Sydney (or Melbourne and Brisbane).

Check out the flyer below, which links to their website, where you can view a short video on the presenters and register for the seminar. And please do pass this information around. Let’s get the wheels moving!!

Anthony

Seminar_Flyer

 

 

 

 

 

 

Why do the banks own most of our money?

"I warn you, Sir! The discourtesy of this bank is beyond all limits. One word more and I—I withdraw my overdraft."  Cartoon from Punch Magazine Vol. 152, June 27, 1917

“I warn you, Sir! The discourtesy of this bank is beyond all limits. One word more and I—I withdraw my overdraft.” Cartoon from Punch Magazine Vol. 152, June 27, 1917

The following is a letter submitted to The Guardian, in response to an editorial. It’s probably the strongest argument I’ve seen for the nationalisation of banks. Most people I’ve met don’t like banks or bankers, but I think most of us have come to accept them as almost a ‘necessary evil’. I think we really need to ask ourselves and our leaders some hard questions.

Why are private banks and financial institutions allowed to have so much control over our money supply?
Banks lend out money at interest to us, but why couldn’t the government exercise this function without charging interest and cut out these ‘middle-men’?

I know that a number of economists have been arguing for some time, that governments which have control of their own currency (such as the U.K., The U.S., Australia, NZ and Canada) should be able to create/lend money into the system to create jobs, build infrastructure and deal with much of our poverty – that in fact all this talk of austerity is just another con-job on the population. Australian economist, Bill Mitchell, has a site which discusses and promotes the idea that sovereign governments should use their power to create money, to ensure full employment in the economy. I’ve put down links to a number of his posts at the bottom of this post.
At any rate, have a read of this letter, and if you feel as I did when I read it, pass it on. Let’s get a much needed discussion on this going.

 

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Book review: The Courageous State

In this article we return to the theme of the “healthy society” that I first wrote about in April this year. At the same time it’s also a review of a book and a website.
For the past year, I’ve been following the blog posts of Richard Murphy on Tax Research UK and just recently I finished reading his book The Courageous State. For me this book and his posts have been (and continue to be) a real eye-opener. I’ve left the info on Richard to the very end as I want to focus on his website and book. First, let me talk about his website: Tax Research UK

Tax Research UK
This website has now been ranked as the No 1 economics blog in the U.K.. Please don’t be put off by the words “economics” and “tax research”. There’s a very good reason this site was ranked No 1. Richard’s posts are less about economic theory and more about action.
The key theme in his posts are that governments have more than enough money to look after the needs of their people; that the key problem is that the wealthiest corporations and individuals on the planet are using the world’s financial and taxation systems to their own advantage and paying little or no tax. This is having a deleterious  effect on the finances of many nations and ultimately the livelihoods of millions of people. For example, in the European Union the tax gap (the gap between what is owed in taxes and what is actually paid) is estimated to be about €1 trillion.[1] When you consider that governments in Europe are forcing their populations to go through austerity measures, this is crazy stuff folks. In the U.K. the tax gap is estimated to be £120 billion.[2] And there likewise the Cameron government has imposed austerity measures and cut-back extensively on the public sector.

It’s issues such as this that Richard Murphy tackles in his daily posts. Many of his posts are like ‘cruise missiles’ aimed straight at the politicians, authorities and key figures in the financial sector. And he is clearly making himself heard in Britain and around the world, with a recent member’s bill (Michael Meacher) being introduced into Parliament – written by Richard Murphy – and aimed at curbing massive tax avoidance. The accounting concept of country-by-country reporting, aimed at creating more transparency in the financial affairs of multi-national corporations, was created by Richard Murphy. This concept is presently being considered by the E.U., the OECD and International Accounting Standards board among others.

Here is a taste of some of his writing:

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How do we create a healthy society?

I don’t know about you folks, but I’m both tired and angry at what I see as the rapaciousness of many corporations around the world, and the apparent ineptitude of governments in dealing with this. On a daily basis we are seeing workers denied pay rises or thrown out of jobs while their CEOs vote themselves enormous bonuses or pay increments. [1] We see environments being destroyed and the rights of indigenous peoples being trampled on. And we see our health and wellbeing being constantly compromised by poor food, medicine and products, all in the name of the mighty dollar. We are then told that this is a part of capitalism we should all accept and move on. After all what’s the alternative? We see governments raising taxes and cutting public expenditures. And we are told that this is for the ‘health’ of the economy – supposed economic rationalism. Again there is this expectation that we should accept this as part of our way of life living in modern market economies. But is this truly the case or is it simply that alternatives aren’t openly discussed or highlighted in the mainstream media ?

This article is a little off the topic of essential oils or even health issues (Ok, maybe a lot. 🙂  ) But then for me the issue of health has always been more than just our physical wellbeing. There’s also our emotional, mental and spiritual health to consider. A society of individuals that enjoy good health all-round (physical, emotional, mental and spiritual) will likely make for a healthy society. But conversely if our social institutions are sick, they will tend to propagate sickness (in all its forms) within us too.  As a concerned human I find myself asking “What are the hallmarks of a healthy society?” This article I hope will go some ways to getting you all thinking that it’s not all hopeless; that there are alternatives out there and lots of great ideas that can get us through this turbulent period in history.