Better ways to deal with inequalities

Meredith Akuhata-Brown

COLUMN

With no council meetings on this week I will take the space to share some reflections after attending the annual general meeting of Eastland Community Trust.

We have within our region some leaders who are opponents of change, and in fact believe much of the same is what we need. This is because the status quo suits them and the way the economy works has provided much of what they want. It is good to hear ECT is developing a new framework for regional wellbeing, let’s hope it is a participatory process that doesn’t result in rubber stamping the current priorities for industry and community investment that cause environmental destruction and increase social inequalities.

The continued support for the theory of trickle-down economics is difficult to understand considering it has rarely worked to benefit anyone except those parts of society who already have more than they need. Yet we still see a focus on creating an economy with a better business climate based on lower corporate taxes and fewer regulations, apparently to liberate companies to create more jobs. Of course, company directors are legally obliged to make decisions ultimately in the best interests of shareholders rather than employees, let alone wider social considerations. So who is responsible to ensure any wealth created trickles down?

Nearly four decades of lower taxes and reckless deregulation have loaded us with soaring inequality, mass layoffs in the early 1990s, wholesale deregulation and sale of state assets, the financial collapse of 2008, recessions reducing opportunities and eroding economic security for millions of people, while polluting activity increases leading to a planet in peril.

Yet like a zombie that will not die, trickle-down economics is alive and well in New Zealand, despite a long record of failure. Influential economists, politicians and captains of industry continue to claim that economic growth can make us all better off, whether we are rich or poor — indeed it is somehow supposed to save the planet it has destroyed!

But in reality, we need the economy to work for us all, we need to challenge the status quo and finally accept that little is trickling down. In fact, there is an upward redistribution of income and wealth creating a more unequal society.

There is compelling evidence that inequality is socially corrosive. In their book, The Spirit Level, Richard Wilkinson and Kate Pickett show that unequal societies suffer from higher rates of violent crime, incarceration, infant mortality, stress, mental illness, substance abuse and suicide. Inequality is also associated with lower life expectancy, lower levels of educational performance and lower levels of trust. Inequality is not just bad for the poor. It’s toxic.

There are better ways to deal with existing inequalities than either totalitarian communism or free market capitalism. Instead of trying to correct inequalities through redistribution, we should ensure that everybody has a chance to participate in a truly sustainable economy. First and foremost, this means making sure people acquire the right capabilities and education. Rather than waiting for wealth to trickle down from the top, the focus should be on ensuring everyone is able to take care of themselves and the environment in a steady-state economy.

Our region is in need of a new, logical approach that stops doing more of the same thing in the hope we will get a different outcome. Understanding our regional asset base is the first step to support meaningful change. From a proper assessment of our people and place, we can make better decisions for the future.

For more information on the proposal for a steady-state economy visit: www.steadystate.org

With no council meetings on this week I will take the space to share some reflections after attending the annual general meeting of Eastland Community Trust.

We have within our region some leaders who are opponents of change, and in fact believe much of the same is what we need. This is because the status quo suits them and the way the economy works has provided much of what they want. It is good to hear ECT is developing a new framework for regional wellbeing, let’s hope it is a participatory process that doesn’t result in rubber stamping the current priorities for industry and community investment that cause environmental destruction and increase social inequalities.

The continued support for the theory of trickle-down economics is difficult to understand considering it has rarely worked to benefit anyone except those parts of society who already have more than they need. Yet we still see a focus on creating an economy with a better business climate based on lower corporate taxes and fewer regulations, apparently to liberate companies to create more jobs. Of course, company directors are legally obliged to make decisions ultimately in the best interests of shareholders rather than employees, let alone wider social considerations. So who is responsible to ensure any wealth created trickles down?

Nearly four decades of lower taxes and reckless deregulation have loaded us with soaring inequality, mass layoffs in the early 1990s, wholesale deregulation and sale of state assets, the financial collapse of 2008, recessions reducing opportunities and eroding economic security for millions of people, while polluting activity increases leading to a planet in peril.

Yet like a zombie that will not die, trickle-down economics is alive and well in New Zealand, despite a long record of failure. Influential economists, politicians and captains of industry continue to claim that economic growth can make us all better off, whether we are rich or poor — indeed it is somehow supposed to save the planet it has destroyed!

But in reality, we need the economy to work for us all, we need to challenge the status quo and finally accept that little is trickling down. In fact, there is an upward redistribution of income and wealth creating a more unequal society.

There is compelling evidence that inequality is socially corrosive. In their book, The Spirit Level, Richard Wilkinson and Kate Pickett show that unequal societies suffer from higher rates of violent crime, incarceration, infant mortality, stress, mental illness, substance abuse and suicide. Inequality is also associated with lower life expectancy, lower levels of educational performance and lower levels of trust. Inequality is not just bad for the poor. It’s toxic.

There are better ways to deal with existing inequalities than either totalitarian communism or free market capitalism. Instead of trying to correct inequalities through redistribution, we should ensure that everybody has a chance to participate in a truly sustainable economy. First and foremost, this means making sure people acquire the right capabilities and education. Rather than waiting for wealth to trickle down from the top, the focus should be on ensuring everyone is able to take care of themselves and the environment in a steady-state economy.

Our region is in need of a new, logical approach that stops doing more of the same thing in the hope we will get a different outcome. Understanding our regional asset base is the first step to support meaningful change. From a proper assessment of our people and place, we can make better decisions for the future.

For more information on the proposal for a steady-state economy visit: www.steadystate.org

Your email address will not be published. Comments will display after being approved by a staff member. Comments may be edited for clarity.

John Fricker - 14 days ago
I was wondering if you'd make a decent mayor. Having read this socialist leaning and disjointed column, I now have the answer. Thanks for clearing things up.

Hemi Edwards - 13 days ago
You offer nothing substantial to refute anything Councillor Akuhata-Brown says in your comment. Only a sneering appraisal of her opinion piece - and yet you think people should care whether you think she would make a decent mayor?

G R Webb - 13 days ago
Be not the first by whom the new are tried, Nor yet the last to lay the old aside. Remind me, Mr Edwards, where this steady-state economy is a rip-snorting success?

winston moreton - 13 days ago
The mayoral aspirant unwittingly describes ECT in a nutshell when she says, "But in reality, we need the economy to work for us all, we need to challenge the status quo and finally accept that little is trickling down. In fact, there is an upward redistribution of income and wealth creating a more unequal society..."

Martin Hanson, Nelson - 10 days ago
I read 'The Spirit Level' some years ago; the evidence that inequality correlates strongly with social dysfunction is unequivocal and overwhelming. Teenage pregnancy, suicide rates, mental illness, drug use, life expectancy, obesity, infant mortality, incarceration rates - all correlate strongly with extreme income inequality.
Of course, there will always be those who haven't read the book who will condemn it out of hand because it threatens their simple-minded political views.

Martin Hanson - 10 days ago
An afterthought - Richard Wilkinson and Kate Pickett talk about their latest book "The Inner Level", a further book on inequality, on the YouTube video at:
https://www.youtube.com/watch?v=KJelcdQxEBA

An even better YouTube video is a TED talk by Richard Wilkinson: https://www.youtube.com/watch?v=cZ7LzE3u7Bw

Only the most ignorant or stupid individuals could fail to accept the overwhelming evidence that extreme income inequality is correlated with great social harm. Some will no doubt argue that correlation is not causation, but the onus is on them to present an alternative explanation.

Poll

  • Voting please wait...
    Your vote has been cast. Reloading page...
    Do you support the parking plan change the council is seeking, to reduce parking requirements for new business developments in the inner harbour?