As a direct result of policies in place, the world’s 100 richest people grew to be $241 billion richer in 2012. This makes them collectively worth $1.9 trillion, which is just slightly less than the U.K.’s total economic output.
A few of the policies responsible for this occurrence are the reduction of tax rates and tax enforcement, the privatization of public assets, wage controls and the destruction of collective bargaining. These same policies that are building up the richest people are causing colossal hardships to the rest of the population.
This plan can be traced back to neoliberalism, which is now proving to be creating the complete opposite outcomes of what was predicted to happen. Due to this plan, throughout the OECD countries, taxation has decreased among the rich and increased among the poor. Despite what the neoliberals claimed would happen, the spending power of the state and poorer people diminished, contracting demand along with it.
Inequality in wages and unemployment have both skyrocketed, making the economy increasingly unstable with monumental amounts of debt. Unfortunately the complete failure as a world-scale experiment of the entire structure of neoliberal thought is no impediment to its perpetuation. It has nothing to do with economics, but everything to do with power.
Source: George Monbiot, “Billionaire’s rising wealth intensifies poverty, inequality,” Monbiot.com, January 14, 2013. http://www.monbiot.com/2013/01/14/bang-goes-the-theory/
Student Researcher: Paige Fischer, Sonoma State University
Faculty Evaluator: Peter Phillips, Sonoma State University