The Sisters of The Good Samaritan - Protection of Children, Young People and Vulnerable Adults
July 2016

Hear the voters: growing inequality matters

Across the Western world, people are revolting against political and economic systems which are demonstrably unfair and which polarise rich and poor. Redemptorist Father Bruce Duncan looks at growing inequality in the US and elsewhere, and how neoliberal philosophy influenced the 2016 Federal election in Australia.

BY Bruce Duncan CSsR

The July election in Australia has thrown our political parties into disarray, but, in my view, some commentators misread the causes of the public’s disaffection with the main parties.

Right across the Western world, democratic peoples are revolting against political and economic systems which are demonstrably unfair and which polarise rich and poor. The Brexit referendum was the most recent surfacing of the anger and resentment of millions of people who feel they have been disenfranchised and bypassed by recent economic and industrial changes.

In the United States, the median wages of full-time male workers have not increased in 40 years, according to the economist Jeffrey Sachs. No wonder so many young people are listening keenly to Bernie Sanders on the left, while many others follow Donald Trump on the right. Both these presidential candidates want to throw out the establishment which not merely tolerated such economic hardship, but also watched the concentration of wealth grow to an unprecedented extreme. The top 1 per cent of Americans now own 22 per cent of total household wealth, up from 7 per cent in the late 1970s.

Nobel laurate Joseph Stiglitz, in his Vanity Fair article (May 2011) “Of the 1%, by the 1%, for the 1%”, brought this inequality to world attention, helping spark the Occupy Wall Street movements protesting corruption and malpractice in financial markets.

But Wall Street seems to have sailed on despite the excesses of the Global Financial Crisis, from which the world has still not recovered. Consider the high unemployment levels in southern and eastern Europe. Eight years after the GFC, Greece still suffers very high youth unemployment of over 50 per cent, with severe impacts on a whole generation. How long can such countries tolerate this?

Globally, Oxfam and others tell us that some 60 or so individuals hold as much wealth as half the entire world population, 3.5 billion people. This is beyond astonishment.

How is this possible? In large part, because of the political philosophy often termed neoliberalism, which over recent decades has allowed many of the rich and powerful to scoop up most of the rewards of economic growth.

This neoliberal philosophy has been strongly promoted in business and political circles in Australia, imported from the United States through powerful corporations and their network of think tanks and media. Traditional Australian conservatives risk being sucked into the neoliberal orbit.

Extreme wealth offers the prospect of very high levels of political influence, with the attendant rent-seeking, political manipulation, corrosion of ethical standards, or outright corruption – as we see in many parts of the world – not to mention the financial and banking scandals, even in Australia.

Australia has fared much better than many other countries, yet we are not strangers to the neoliberal mantra of small government, privatising of government-run businesses and services, deregulating business and finance as much as possible, keeping wages low (except for the managerial class, of course), and promoting free trade agreements, often with dubious outcomes (such as the demise of much manufacturing in Australia).

Certainly, we need to adjust to changing global influences and trade, but the pain of much of this has fallen on the working class, and increasingly too on the once-secure middle classes. Voters are crying out for fair ways to adjust to new circumstances, and not to denigrate those left behind, including the unemployed on their pitiful subsistence Newstart allowance.

These problems are among the most pressing moral issues of our time. With strong support from other religious leaders, Pope Francis, in his 2015 document, Laudato Sí, decried the growing inequality and the seeming indifference of powerful interests to the plight of millions of people in poverty and hunger. He critiqued neoliberal philosophy for the spoliation of global resources, and warned about the increasing impact of global warming. In the Australian election campaign, these calls to prioritise sustainability in economics and lifestyle were, alas, largely sidelined.

As Ross Gittins pointed out in the Sydney Morning Herald on July 4, voters revolted at the vague Coalition ‘plan’ for ‘jobs and growth’, along with tax cuts for the wealthy. Many voters did not want to lose the security of Medicare and a quality public health system, along with decent education for all our children.

The Coalition rhetoric about the urgency of cutting Australian debt is greatly exaggerated, and concentrating on cutting social spending in effect transfers wealth from ordinary Australians to high-income groups. As Kenneth Davidson wrote in The Age of June 26, our governments should be taking advantage of very low borrowing costs to invest in productive infrastructure programs urgently needed by the country.

The Coalition’s determination to continue major cuts to services, hospitals, and education, while giving massive tax advantages to the wealthy – especially in superannuation and reduced company taxes – seemed simply outrageous, and not just to those on struggle street, trying to manage housing stress, with insecure casual or part-time jobs, student debts, loss of jobs in manufacturing, rural decline, or disadvantage. People over 45 also face extra difficulties retraining or finding suitable work.

As Gittins wrote, we cannot fix “the budget until we’re prepared to increase tax as well as cut spending and, in the process, share the burden more fairly between the top, middle and bottom”. Yet the Coalition “acted as though fixing the deficit by increasing taxes or cutting concessions was economic and political anathema”.

What could cause such political inanity? Could it be a severe bout of neoliberal flu?

This article was first published on the blog Social Policy Connections.

Bruce Duncan

Redemptorist Father Bruce Duncan is one of the founders of Social Policy Connections, an independent ecumenical network based in Melbourne. He studied economics and politics at the University of Sydney, completing his doctorate in political science in 1987. He has lectured in history and social ethics at Yarra Theological Union in Melbourne since 1986.

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