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Is this as good as it gets?

Written By: - Date published: 10:59 am, November 5th, 2009 - 66 comments
Categories: capitalism, class war - Tags:

Most of the wealth in New Zealand is owned by a tiny fraction of the people because our political/economic system makes it that way.
10% of people have more income than 50% combined.

 income deciles

That’s just income. The inequality of wealth distribution is far greater. The net wealth of 10% of people is 20 times the wealth of 50% of us combined. In fact, the wealthiest 10% have more wealth than everyone else put together.

 wealth by decile

These aren’t just numbers. That tiny amount of wealth the lowest 40% have is poverty, the cause of so many of society’s ills – crime, suicide, violence, obesity, social alienation, poor health, poor education are all linked to poverty.

Plutocracy: not as cute as it sounds

Plutocracy: not as cute as it sounds

We allow a tiny portion of the population to control the wealth of this land. This isn’t some natural state, an inevitability. It is the result, the purpose, of the capitalist economic system, which is only possible because of the legal framework that exists to create and support it. Our company law, our land law, our tax system are all set up to enrich those few at the expense of the rest of us.

My question is: ‘why do we let it be this way?’ We have a democracy, we have a relatively uncorrupted political system. The people that capitalism steals from far out-number the people it serves; we can out-vote them. Another way is possible. We can easily create a fairer, and ultimately more successful society than this without drastic reform, just sensible changes.

So why don’t we do it? Why won’t we vote for it? Why don’t we demand change?

 Is it the endless pro-capitalist propaganda in the corporate media (not just the news, the ‘entertainment’ too)? Is it that the promise of some income growth blinds us to the greater injustice? Or is the reason that the capitalists have won and are still winning is that they are the most aggressive and greedy members of our society, while we are too weak and subservient to fight back?

66 comments on “Is this as good as it gets? ”

  1. IrishBill 1

    I see unemployment is up. I wonder how many of that top ten percent lost their jobs?

  2. Pat 2

    Phrases like “class war” probably don’t help.

    • snoozer 2.1

      why not? What else do you call 10% of the people controlling more wealth than everyone else put together?

      Which section are you in, btw, Pat? The 10% with everything or the 90% getting ripped off? And are you fighting for that side’s interests?

      • IrishBill 2.1.1

        From the New York Times: “There’s class warfare, all right,’ Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.’

        Nuff said really.

      • Pat 2.1.2

        “Which section are you in, btw, Pat? The 10% with everything or the 90% getting ripped off? And are you fighting for that side’s interests?”

        I’m in neither of those sections. Surely there must be another category for normal people? Maybe I’m Switzerland. In which case I’ll hold your money for you while you have your class war.

        • felix 2.1.2.1

          So you’re in the 50 odd percent who don’t realise they’re being screwed. Goodo.

        • Bright Red 2.1.2.2

          What Pat is saying is he is in the 90% of people with less than half the wealth to share between them (in fact, propbably in the 60% with less than 10% of the wealth) but he defends the interests of the rich 10% in the hopes of getting a few crumbs from their table or (lol) becoming one of them some day

          house slave is the term.

  3. trademark 3

    It’s likely that most kiwis will be unaware of these statistics in the first place. A good start would be to raise New Zealanders’ awareness of just how unequal our society is. That might get people to see all the fetishising of wealth that the MSM promotes in a different light.

    The next question is, who in the political realm can address these inequalities, and how far can you go *without* drastic reform? New Zealand relies heavily on foreign investment, so raising taxes or weakening the pillars of monetary policy will cause adverse reactions in the market, and since we’re so tied to the market, we’ll get screwed. Embedded neoliberalism means that you can only tinker at the very edges before the rich bite back. In other words, ‘sensible changes’ don’t really seem so sensible. Or sufficient, for that matter.

    • So Bored 3.1

      Good question on how to address the imbalance? The issue of national economic sovereignty is high on the list, as is control of the money supply and the creation there of.

      On national economic sovereignty Keynes idea (shot down by the US post WW2) was for an international clearing house that aimed at zero balances…in short fair trade, no international money market casinos. When 95% plus of all foreign currency trades have no relation to a physical transaction for goods and services we have a big problem, so killing that market has to be a top priority.

      On money supply start with severe regulation of all banks, then nationalise the creation of cash by each national reserve bank.

      • trademark 3.1.1

        NZ’s currency is among the most heavily traded in the world, especially considering our small population. Add to that the fact that on the whole, most kiwis are poor savers and the picture becomes more bleak – we have to look offshore to create wealth here, but then much of the wealth that gets created here returns to where it came from.

        “In a land of plenty” has an ad that demonstrates how New Zealand sold itself overseas in the 90s:

        Aotearoa, New Zealand.

        Behind the veil of south pacific beauty is an expanding economy, well prepared for the 21st century.

        Now highly competitive after a decade of reforms, New Zealand invites international partners to share in an exciting business future.

        Supportive government policies provide a commercially transparent environment, with no hidden costs. There are low interest rates and inflation restrained by law, a freely convertible currency with no restrictions on transfers, equitable taxation with no levies on capital gains.

        New Zealand – the profitable partner.

        These are the foundations of our economy, and with a few minor modifications, the ad would still ring true today. The problem with any transformation of the economy that goes beyond tinkering with the edges and marketing it as a transformation is that things will get a whole lot worse before they get better. Without a popular consciousness (i.e., solidarity) against these pillars of inequality, there’s not much anyone can hope to achieve. We all know who has the greatest control over the popular consciousness at the moment.

        So, in my mind, transformation has to be a bottom-up process, not a top-down one. Only when ordinary people clearly understand the roots of inequality (and recognise the power in their hands) will they be able to resist attempts to entice them into apathy or pro-capitalist fetishism that any positive transformation will inevitably bring with it from the other side.

  4. Bill 4

    Just an angle on the whys and wherefores.

    Almost all kids are brought up on a marvellous diet of superman and batman et al. These fictional characters become our stereotypical heroes….our white hats riding out of or into the sunset.

    Oh. And there are the sporting heroes fighting the mythical ‘good fight’ on the green green corporate astro turf

    These, and other mythical heroes have no relevance to our every day life’s except in maybe the most tangental of ways.

    Meanwhile the relevant heroes; he real life heroes and their deeds are buried by the writers of history. I’ll bet that no kids are regaled with the defiance and courage of Mother Jones or the dare and do any number of .anonymous and (sadly) forgotten working class heroes.

    And perhaps that is all we need to know and understand to demand something different or better….that we have been lied to and continue to be lied to. We don’t need to rediscover or reinvent the lost cultural markers to reject our present culture. The level of rejection required to deliver whatever the something better is, is of course, another set of discussions.

  5. Gosman 5

    I know, why don’t you articulate a coherent, detailed and realistic alternative to the current system rather than decrying how unfair and unequal it is and how evil the ‘Haves’ are and how downtrodded the ‘Have nots’ are?

    This has been the problem of the left since the days of Marx and Engels. It is easy to point out faults in society but coming up with something that could be put in place instead beyond some utopian dream is somewhat lacking.

    Heck if all you did was state that we should follow lock stock and barrel what Sweden does it would at least be a starting point.

    • snoozer 5.1

      well, there you go – let’s be like more successful, more equal societies like Norway and Sweden. That’s the beginnings of a solution.

      In fact, there have been endless articulations of different possibilies or at least the creation of a fairer society with a moderated capitalist economic system. You just don’t hear about them because they don’t get a look-in in a world where the capitalists control the media.

    • Daveo 5.2

      There’s no shortage of alternatives to capitalism, but that’s another discussion. The first step is to admit we have a problem.

      • Geek 5.2.1

        Is it really another discussion? The numbers above can’t be argued with. There really is no discussion that can be had with them alone. If you present them to the public the response will always be “That is horrible, but what can we do about it?”. If you don’t have an answer to present right at that point you have lost the audience.

        I am completely uneducated in this matter. I know that other societies do things far better than we do. What I don’t know is what they do. Just saying look at Sweden is not enough. You have to be able to say that it is this policy or this social factor that results in their success.

        If you can articulate that then you stand a far stronger chance of making this the priority in our nation that it deserves to be.

        • IrishBill 5.2.1.1

          For a (social democratic but still capitalist) start:

          * An eight stage progressive tax system topping out at (say) 80% at $2m

          * Incresed regulation of financial markets (this would probably increase investment)

          * Proper taxing of capital gains made by property speculation

          * More publicly funded media

          * stronger labour laws including an award system

          * Free tertiary education offered according to academic merit

          * re-nationalisation of essential infrastructure including the electricity industry and the telecommunications network

          • Geek 5.2.1.1.1

            Are these along the lines that others are using?

            There are some pretty radical changes in what you have there. I don’t argue against them. I just wonder how long they would take to implement. I also wonder what effect on our current market system a true discussion by those who can act upon it would have.

            The progressive tax alone would start sphincters puckering in offices every where.

            Do you know how our close economic ties with Australia would effect these kind of changes? I am not sure on what the economic situation is in the region around Sweden but I would be concerned that if we were to make some of these changes our own economy may suffer as New Zealand becomes a less desirable place to operate business.

          • Bill 5.2.1.1.2

            For a (truly democratic and non-capitalist) start:

            Why start with SD and capitalism Irish when these systems have incrementally delivered for over 100 years precursors to exactly what we have today?

            edit. And what Daveo says below somewhere about the inevitability of arriving right back where we started if we merely fiddle with the extremities….as it were.

            • Geek 5.2.1.1.2.1

              An interesting site Bill. It does however seem like something that really is unattainable with out some for of major melt down that would require rebuilding from block one. People aren’t willingly going to give up ownership.

              I also worry about it being directionless. As stated in its own description Parecon is born from many movements including the Anarchist movement. I understand that there is a valuable input to be gained from all but it seems to me the model lacks control. There is no force controlling direction. The ideal of everyone having input in decisions based upon its effect upon them is admirable but how do you enforce that with out any over riding controlling system?

              Thank you for the link though. I may spend a bit of time running around on that site. i am sure my questions have already been addressed some where in there.

            • Quoth the Raven 5.2.1.1.2.2

              Geek – You should ask yourself why you need force why you need control?
              On parecon I think there are many many problems that I don’t think are addressed adequately. You can read a criticism on the same site Bill linked to. I think the market is democratic and market distribution can handle most things pretty well.

            • Daveo 5.2.1.1.2.3

              How is the market democratic? I mean, unless you think rich people should get more votes than poor people.

            • Quoth the Raven 5.2.1.1.2.4

              Daveo – Read the link. Markets indeed have defects, but they have virtues as well. We need to think dialectically about markets. Markets are democratic (in that they respond to consumer preferences), and they are undemocratic, (since they tend to exacerbate income inequality). And that comes from what seems to be a very radical social democrat. I happen to disagree with the latter believing, like many (many socialists as well) that a free market would be more egalitarian than what we have now – radically so.

          • Richard 5.2.1.1.3

            > * Free tertiary education offered according to academic merit

            I don’t think this is a good idea.

            Tertiary education is about learning to think and developing academic skills. It doesn’t make much sense to limit it to those who already have academic skills.

            Limiting education to the clever seems as unjust as limiting it to the rich.

            Free tertiary education should be offered according to desire. That is, if you want to get a tertiary education, you can.

          • Rich 5.2.1.1.4

            You forget a wealth tax (maybe an annual 1% of global wealth over $1mln, rising to 10% on over $10mln and 40% on anything over $100mln).

            Also, forget old-style nationalisation. That just enriches overpaid senior management who run the business as if they owned it, leaving the taxpayer to provide funds and take the risk. All large businesses should be transitioned to a suitable form of worker/customer coop, where the financial benefits and control of the business are apportioned on an equal basis.

          • SHG 5.2.1.1.5

            If such a tax system were implemented, all the high-earners left in NZ would up and leave.

            Thus the govt of the day would have fewer tax dollars coming in, meaning that “free” this and “nationalised” that and “publicly funded” whatever would never happen.

            • Rich 5.2.1.1.5.1

              Wrong – I’m a high earner and I wouldn’t.

              How come the many wealthy Swedes don’t “up and leave”?

              Besides, if the many wealthy parasites left (having been made to pay an appropriate level of tax on their wealth before being allowed out), others would take over running their businesses.

  6. tsmithfield 6

    I have heard it said before that if all the wealth in the world was distributed equally, in a relatively short time it would be back in the hands of those who had it in the first place.

    Can’t point to a link, but it seems to make logical sense.

    • Chris 6.1

      Or in the hands of the toilet cleaners to the rich. Either possibility is there.

    • Pat 6.2

      As proven by the history of Lotto winners.

    • Daveo 6.3

      If you retained a capitalist system, then yes, it would happen eventually, because inequality is a result of capitalist power relations. Leave those power relations intact and the inequality will return.

      That’s why it’s not just a matter of redistributing a bit of wealth from within the capitalist system. You have to do away with the capitalist system and replace it with an alternative based on human dignity and economic democracy.

      • Pat 6.3.1

        But how do you prevent the people democratically reinstating a capitalist system?

        Or protests from annoying pro-capitalist demonstrators pointing out minor flaws in your new system (like, say, bread shortages)?

        (I think I know the answers – I’m reading “Gulag – A History” by Anne Applebaum at the moment).

        • Bright Red 6.3.1.1

          no-one’s espousing Stalinism here.

          And you would be a fool to ignore the fact that a lot of the problems (the tendency to authoritarianism especially) with the Soviet Union existed in Russia before and exist now – it’s deeper rooted than blaming the system that they purport to have in place at any one time.

  7. roger nome 7

    “stronger labour laws including an award system”

    Irish – do you know why the CTU doesn’t advocate for a return to an awards system? It’s very strange IMO.

  8. roger nome 8

    Pat:

    Why is the capitalist system in Norway, Denmark, Finland and Sweden far more equal than ours?

    Capitalism doesn’t have to mean extreme inequality, and socialism doesn’t have to mean Stalinism. Your binary thinking is child-like.

    • Pat 8.1

      Daveo wrote “You have to do away with the capitalist system…”

      I don’t think he was suggesting it be replaced with a Scandinavian capitalist system.

      Maybe he could elucidate what system he thinks we should adopt.

    • Pat 8.2

      “…Norway, Denmark, Finland and Sweden…”

      I would be interested to know whether the opening up of EU borders has resulted in a drift or exodus of skilled labour to other EU countries where they could earn a higher income with less taxes.

      Becuase the natural argument against NZ adopting a similar income/tax system, would be that there would be an exodus to Australia.

  9. Macro 9

    Q. Why are there no workers in the religious right?

    A. Because the capitalists pray for the workers on Sunday and prey on them for the remaining six days of the week

    Good post Marty! It was all going well in “God’s Own” until we were Rogered in the 1980’s and served up a mother of a budget in 1991 – and the last crowd seemed incapable of doing anything constructive to address the imbalances that had been created – despite a huge mandate in the early years.

    There are far more equitable means of distributing wealth – we have to get rid of thae antiquated property laws for a start. Michael Fox hinted at this in an earlier post. For those not aquainted with what I am referring to – the property laws of NZ are derived from the property laws of Gt Britain, which in turn were drafted in the 18th C and based upon the ethics – drawn up specifically – by John Locke. These laws completely overlook the concept of communal property – so we can have the likes of Rodbey Hide now proposing that the common property of NZers ie water can be sold to a private company to manage! Everybody owns that water – the rain from heaven falls on the rich and the poor alike! We need proper government to fairly manage its distribution. Furthermore the laws of property completely overlooked the rights of indigenous people! We have a problem in our parliament today following that oversight!

    There are far better ways to distribute wealth than relying on an amoral and ineffectual market. Markets are ineffectual when there is a need to distribute in an equitable manner. There is a growing need looming for instance to distribute energy equitably. An ETS may go someway towards signaling to consumers the real costs of their energy usage (depending upon the price setting for Carbon) but it will ultimately drive the poor even further into poverty and the distribution of energy will flow only to those who can afford it!

    • Bill 9.1

      Nice comment.

      One point though. By saying “Everybody owns that water the rain from heaven falls on the rich and the poor alike! We need proper government to fairly manage its distribution.”, you are inviting central planning…command and control economics through centralised government power.

      On the assumption that you are not in favour of replicating all the woes of Soviet era planning can I suggest that you’d be better asserting that we need a democratic economy to fairly manage distribution? And while we’re at it, recognise that a democratic economy (as opposed to either a market one or a centrally planned one) would also address the issues of resource use rather than simply the distribution arising from any development of a resource as well as ensuring that all manufacturing or resource use was for social good?

      • Macro 9.1.1

        “On the assumption that you are not in favour of replicating all the woes of Soviet era planning can I suggest that you’d be better asserting that we need a democratic economy to fairly manage distribution? And while we’re at it, recognise that a democratic economy (as opposed to either a market one or a centrally planned one) would also address the issues of resource use rather than simply the distribution arising from any development of a resource as well as ensuring that all manufacturing or resource use was for social good?”

        Yes exactly!

        Central regulation however may be required in some areas initially – where there is wide disparity. eg in China the central government has banned the deforestation in the catchment areas of their rivers – why? because even they could appreciate the effects of the result – sand storms, eroded earth, desertification etc.

    • Bill 9.2

      In fucking purgatory….. or somewhere…… again

  10. roger nome 10

    Pat:

    “Becuase the natural argument against NZ adopting a similar income/tax system”

    One of the many faulty assumptions of the neo-liberal economic model is that all people are driven by avarice. Many are driven by family, community, quality of life – you know, that’s why most business people in the Scandinavian countries actually support the Social Democratic model. It’s a different values system, and a healthier one.

  11. prism 11

    One of the reasons why we are stuck in the economic and political style we are in today is language – we are connected by English to class-ridden, tending towards fascism and hard-line-economist USA and Britain.

    We as a people don’t know enough about how our own country works, what is important for the people and economy’s health and wellbeing, or how we are impacted by larger, dominant countries. That is all stuff we could take in in English, and to go outside the English cabal we would have to learn other languages for real understanding. So many people are reluctant to learn some Maori, and I think foreign languages are being taken from the curriculum in some schools.

    The Scandinavian countries have been having political spats for centuries, and live at the top of the globe, as we do at the bottom. There are similarities, we could learn from them and they seem to have made considered policies that are worth considering. Lucky they are more intelligent about foreign languages than us, and can communicate in English.

    • George D 11.1

      You’re absolutely right, beyond a shadow of a doubt. The relentless obsession of both the ruling classes and the population with the Anglosphere, and the ignorance of anything outside it, means that our policy inspiration is drawn from two of the countries in greatest decline. During the last century you could pretend they were doing just fine – it’s becoming increasingly obvious that they aren’t. We share the English prejudices against foreigners (Europeans), and we’re poorer in every way as a result.

  12. Homo Domesticus 12

    Friends, what do you expect? NZ is being sold out by National, Auckland will soon be asset stripped. The results will be that the 10% will get richer, the rest of us and the country will not. Rise up and drive out Key and English and those that would sell out country.

    Homo d. (FPP)

  13. JD 13

    “we are connected by English to class-ridden, tending towards fascism”

    The National Front could only rally two dozen supporters for their march. So much for tending to fascism whatever that means.

  14. Jenny 14

    If it was the last generation’s historic task to dismantle communism.

    Maybe it this generation’s historic task to dismantle capitalism.

    Future generations and the planet will surely be thankful.

  15. Macro 15

    we are fast progressing towards a “corporatocracy” where corporations run the country on the behest and in collusion with the political power.
    They obey the the new golden rule!
    “those with the gold – RULE”

  16. Anthony Karinski 16

    From table 2 in your:http://www.stats.govt.nz/~/media/statistics/publications/analytical-reports/wealth-and-disparities-in-new-zealand/wealth-disparities.aspx link

    Percent of total net worth
    Top 1% 16.4
    Bottom 50% 5.2

    The top 1% of kiwis is worth more than three times as much as the bottom 50% combined. Meaning on average each person in the highest percentile has assets worth more than 157 times the average for the bottom 50%. I’m sure they’ve worked 150 times harder for it and risked 150 times more. Yeah right.

    Would be interesting to see some historical trends for this.

  17. prism 17

    Jd I was talking about the USA and Britain in that quote that you cut short. The fascism I was referring to is an orientation that the state has, and the National Front are one of the disaffected groups that arise in society.

    Jenny – sounds a bit pie in the sky. No great change will be the answer to struggle, and when something good is done, the details and reasons are soon forgotten plus the sacrifices that those involved made. Example – Sir Keith Park NZ who had a major role in defending London and attacking in the Battle of Britain I think. Got given the push afterwards and was not mentioned in some official report. That was WW2. Then there was the 1970’s feminist push for women to be have better opportunities and to be respected as equals, many young women dismiss the gains made. They have no idea of attitudes and conditions then and the improvements now.

  18. SHG 18

    I look at the graphs and see equal-opportunity policies paying off.

    CONGRATULATIONS COMRADE COMMISSAR EO OFFICERS, YOU HAVE WON

  19. modern 19

    Great post.

    ‘why do we let it be this way?’

    The million dollar question.

    Surely much of the answer is ‘ignorance’.

    So keep up the good work…. keep doing what you’re doing

  20. Harpoon 20

    ” … is the reason that the capitalists have won and are still winning is that they are the most aggressive and greedy members of our society, while we are too weak and subservient to fight back?”

    Folks, everything rightists do is done to achieve one of two things, ether
    (a) move money from the rest of the population to the already rich, or
    (b) distract the rest of the population from the fact that (a) is happening.

  21. Gosman 21

    I love it when you ask leftists to articulate their alternative to the ‘evils’ of Capitalism.

    You tend to get the responses falling into two main camps.

    The first is the social democratic managed capitalism group who think you can just keep the current system but somehow control it via strict controls and the welfare state. People who advocate this approach hold up the Scandanavian countries as the ideal.

    The other group is those who think that the entire system is rotten and you need to replace it with something better. This something is the rather vague and utopian ideas of Socialism.

    I actually have a bit of sympathy for those who fall in to the second camp. They are at least not hypocritical when they decry Capitalism. However the alternatives they propose are of course ‘pie in the sky’ stuff.

    • Ag 21.1

      What’s wrong with the Scandinavians? They’ve had a higher standard of living than most other countries for years.

      They must be doing something right.

    • Sam 21.2

      I love it when people who have absolutely no idea what they are talking about carry on as if they do, attempting to command some sort of “daddy knows best” ideal of right wing dominance.

      Read a book.

  22. Michael 22

    Most New Zealanders have a reasonably comfortable standard of living, so they feel no need to question capitalism. Capitalism is preferred by the rich.

    I predict that in a few hundred years when poverty hits a much larger proportion of our country there will be a greater movement towards a socialist economic system.

    Look at what poor countries in South America (eg. Venezuela) are doing now, this is what will happen to us in a few hundred years.

    It took us 1000 years to get out of the middle ages and it will take a similar amount of time for us to realise capitalism doesn’t work.

  23. sean14 23

    Closing down golf courses?

  24. Ben 24

    One possible answer to the last paragraph may be that “You can’t vote the rascals out, because you never voted them in, in the first place”. The sequence of events of the last 30 years are that of capital pressure on governments locally, and internationally. I know this I’m hugarian. I have lost one country already. We can’t pressure such a vote to take place, because we don’t have capital that governments are competing to accomodate, like the multinational corps do. The politicians are in no stronger position than us.

    If they decide to crack down with taxes on the rich, the rich in turn can threaten, or actually take their business to Aus, for instance, or worse, have the World Bank’s MIGA arm put mighty pressure on the NZ government. They clearly have a better hand of cards than the people.

    One reasons why national solutions are off the table for us, the 90%, worldwide.

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