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Capital drives inequality
The rich get richer and the poor get poorer, is a useful cliché in revealing the tendency of capital to drive social and wealth inequality
The reason the wealthy appear to exist in a rarefied place is not that they possess two heads. The wealthy own the capital that drives the growth and concentration of wealth and power, and that capital, passes from one generation to the next. In today’s world, capital ownership is the main factor defining social class and who belongs to the elite; then, there is learning and talent.
Capital and its ownership is a culture that a minority inhabit. The power of Supply Side Economics is the reality that production – the supply of consumer goods and services for consumer demand- drives up profits of producers, and their agencies, concentrating wealth in the hands of the few. In 2023, corporate stock ownership is the deciding factor in who joins the 1% Club.
Inequality is nothing new, and neither is capital. In ancient times, the owners of land, and the implements and people who worked the land, including the seafaring vessels that opened up foreign lands to barbarian conquerors, were the holders of wealth and power. It is the same today.
That capital has always appreciated is also nothing new. The steady rise in the stock market price is a reflection of the increasing value of capital. In fact, the success of capital to move through the centuries, adding value as it travels, has allowed for the establishment of wealth and power in the hands of the minority: European royal households, US industrial barons, owners of financial and corporate stock, business magnates, autocratic leaders, and today’s tech billionaires.
Capital is a beast that adopts the features and cultures of the historical epochs it passes through. It takes on the ideas, sciences, and technologies at each stage. Capital discards and adopts, as it moves through history.
Today, capital has arrived in the time of artificial intelligence. Pilotless aircraft, ships without captains, driverless cars, robots, drone technology, trains with no navigator on board and the list goes on. Where it ends, no one knows.
Capital is energy and motion. It is the flux and flow of the capital mix- wealth-making assets and enterprise- towards establishing value to those who control that mix. Capital is dependent on human effort, exigence, and enterprise for value.
Capital appreciates because of the dynamism of human effort in satisfying the demands of life on earth. Abraham Maslow decided there was a hierarchy of needs from the most basic such as food and water to the most incredible such as space travel. Capital provides the inputs and outputs for every human need and purpose.
We live in the Age of Capital in that the capitalist creed drives global society and economic culture. Science and technology reign supreme in driving up the value of corporations and their owners. Any assessment of inequality will reveal that the owners of capital have an advantage in the wealth stakes. Capital is power. That is not a revelation. History has evolved that way.
Dickson Igwe
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16 Responses to “Capital drives inequality”
Moreover, in the US, the dominant group , the supposed upperclass, used a protective government, ie, constitutional protection, legal and extralegal activities, etc, to amass wealth, power,,and resources, etc. All the wealth and power amassed, they employ a ‘pull up the gangplank ‘ mentality, ie, keeping the wealth and power and control amassed, and structuring the system to keep the non-dominant group(s) from progressing. They rigidly oppose any effort to correct the disparity of wealth,resources and power distribution. Importantly and of note , is that the dominant group’s amassed wealth is passed from generation to generation , creating generational wealth. Further, the dominant group used its power, control, wealth , capital , government protection, etc , to use the tax system, debt ( the wealthy loves debt) , economic crises, war and other conflicts , etc to get richer and wealthier , while the poor gets poorer.
On the other hand, the less dominant group(s),ie, Blacks whose exploited labour was the engine which drove the US’ economy into the #1 economy in the world but still owns less than 0.5% of the national resources. The dizzying profits from exploited black labour not only built the economy but also other industries, ie, Wall Street, banking, insurance, transportation, Telecommunications,etc. Though the focus was on the US, it can be also be applied across the pond and beyond.
Here they are:
1. Did slaves disarm themselves and proclaim they want to be enslaved?
2. Did slaves volunteer to work from sun up to sun down to enriched the masters, along with providing for their comfort?
3. Did slaves decide to work free for the masters so that they could live in abject poverty while the masters build generational wealth for their offspring ?
4. Did slaves decide to forego acquiring capital and wealth?
5. Did slaves decide to be currency for masters?
6. Did slaves volunteer to be a) dehumanize, b) abused, c) raped, d) exploited, e) build nations’ economies and power, and not be able to partake in voting, and engaging in civic affairs, f) deprive themselves of quality healthcare, employment , education, etc.
True,,government is wasteful in expending public resources; it delivers low productivity and low productivity comes at a high cost. It (government) does not exemplify maximizing budget efficiency. This occurs because of (1)the structure of our system of government, ie, Westminster system, which promotes the Peter Principle, viz, promoting people from a level of competence to a level of incompetence, and (2) citizens disengagement from civic and public affairs. For change, the citizenry must get engage and hold government accountable and responsibility for inefficiency and ineffectiveness in expending public resources. It should reward those who demonstrate effective management of allocated resources to get positive outcomes, and kick the poor performers to the curb. Rewarding poor performers exacerbate an already bad situation. The electorate must send the right message, ie, if you perform well, you will get its support; poor performers, kicked to the curb. We need to stop recycling poor performers, for that is insanity. Our political and civil service must foster succession planning. Currently, the BVI suffers from a dearth, lack, of effective succession planning. The BVI should have a cadre of qualified people trained, experienced and ready to grasp positions of increasing responsibilities. It does not, resulting in non-managers being put into management positions and then expect positive outcomes. Here is a news flash. Policy expertise is not the same as effective management. We need to stop conflating the two, for they are different skill set.
[Let’s lead as Eagle leads, not careen of the cliff as buffaloes do].
V/r
Manda School Alumni