Name: Analysis | U.N. warns that runaway inequality is destabilizing the world’s democracies
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Analysis | U.N. warns that runaway inequality is destabilizing the world’s democracies

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This article was published more than&nbsp;3 years agoCommentGift ShareRunaway inequality is eroding trust in democratic societies and paving the way for authoritarian and nativist regimes to take root, according to from the United Nations.The findings note that solutions — including robust social safety nets, an active redistribution of wealth and the protection of workers rights — “have been recommended for decades” and are well within the capacity of the world’s wealthy nations.But in many countries, including the United States, such initiatives have been blocked by “economic elites” because they inevitably threaten the interests of certain stakeholders, the report says, affecting the balance of power in nations that pursue greater economic redistribution.The broad contours of income and wealth inequality in the United States are, at this point, well-known. The top 1 percent of households have since 1980, leaving less behind for everyone else. The 400 richest Americans now have than the 150 million Americans in the bottom 60 percent of the distribution.AdvertisementIn the past several decades, paychecks of rank-and-file workers demanded by their bosses and shareholders. As the U.N. report notes, the average compensation for a chief executive at a Standard &amp; Poor’s 500 company was $14.5 million in 2018, while the average production and nonsupervisory worker took in about $40,000.Defenders of the economic status quo have argued, at times, that inequality is . But even if it is, it may well be the and, in fact, it might . Economic inequality, in this view, is simply the price of paying a fair remuneration to the people who produce the and the and the that all of us — even the less fortunate — are now able to enjoy.The U.N. report notes, however, that rampant inequality is harmful even to people at the top of income and wealth distributions. Unequal societies “grow more slowly and are less successful at sustaining economic growth,” as . As economic conditions deteriorate in lower and middle classes, we may get to a point where a critical mass of the population can no longer afford the iPhones and cool apps and free shipping that are driving our economy, causing a recession. In the end, the trouble with capitalism may be that .AdvertisementThe U.N. report is unusually clear-eyed on the power dynamics underlying today’s inequality struggles. “People in positions of power tend to capture political processes, particularly in contexts of high and growing inequality,” the report states. “Efforts to reduce inequality will inevitably challenge the interests of certain individuals and groups. At their core, they affect the balance of power.”This observation is extremely useful for understanding the current debate. The winners of the modern winner-take-all economy often protest that the distribution of money is not a zero-sum game. The rank-and-file may be getting a smaller piece of the American pie, but if that pie is , they may still be better off than they were 40 years ago.But while preaching nonzero-sum thinking, those winners have also taken a ruthlessly zero-sum approach to rewriting the rules of the economy to their own benefit. Corporations and their wealthy leaders have lobbied extensively, and successfully, to , , and . The net result has been a from the poor and the middle class to those at the top.AdvertisementWhen the rich shape a country’s institutions in their own image and to their own benefit, it’s little wonder that trust in those institutions declines, as . That lack of trust creates a vacuum for authoritarian and nativist regimes to take root, according to the United Nations. “The central message of populist movements has historically been that the common people are being exploited by a privileged elite, and that radical institutional change is required to avoid such exploitation,” according to the report.But research shows the has primarily been one of corruption, self-dealing, and .Policymakers have known how to avoid this dire outcome for decades, according to the U.N. report. Leveling the playing field would involve strengthening the minimum wage, reinforcing the social safety net and ensuring universal access to health care in places that currently lack it. It’s really that simple, and wealthy countries like the United States have plenty of economic capacity and technical know-how to pull it off.But putting those policies in place would require redistributing a lot of wealth downward, via a mechanism such as a wealth tax or some other form of increased taxation on the wealthy. And the individuals and institutions currently hoarding the country’s riches have rightly identified those policies as a threat to their interests. CommentsGift ArticleTOP STORIESThe Fact CheckerFinding the truth behind political rhetoric, reviewing claims to see what’s accurate and what’s misleading.Try a different topic or to save your preferences

This article was published more than&nbsp;3 years agoCommentGift ShareRunaway inequality is eroding trust in democratic societies and paving the way for authoritarian and nativist regimes to take root, according to from the United Nations.The findings note that solutions — including robust social safety nets, an active redistribution of wealth and the protection of workers rights — “have been recommended for decades” and are well within the capacity of the world’s wealthy nations.But in many countries, including the United States, such initiatives have been blocked by “economic elites”...

Analysis | U.N. warns that runaway inequality is destabilizing the world’s democracies

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