South Africa‘s G20 presidency comes to an end this month, with a devastating takedown of global inequality — neoliberalism. This hard-capitalist ideology is the ruling class’ move towards unbridled wealth extraction.
Global inequality — false scarcity
The presidency, which alternates between countries, commissioned a study led by American inequality economist Joseph Stiglitz. The report notes that the competition-at-all-costs approach of capitalism creates a false scarcity of knowledge and information. One striking example the report gives is that of healthcare in the Global South, which the authors say is “deprived” of the education it needs.
For the economists, this is one aspect of what drives inequality:
Distribution of asset ownership, not just financial assets but skills and social networks (social capital) that are critical in boosting workers’ wages.
That’s in contrast to the publicly owned NHS, which shares internal information on the best practices for healthcare. If healthcare were fragmented, a misguided focus on competition would restrict information sharing.
Rent over work
The report states another driver of inequality is:
Distribution of income among labour, capital, and rents (including market power and the laws and regulations that affect corporate power, the ability of firms to exploit workers, and corporate managers to extract rents from corporations).
These rules and regulations that affect how market incomes are distributed are in turn affected by an interplay of political and economic power.
The pursuit of unearned wealth through capital income, like rent, takes money away from people who work for a living by depleting their share of total global income. From 2000-2016, the share of global GDP that was extracted by capital income leapt from 20% to 32%, according to the London School of Economics (LSE).
The non-work-based profiteering is taken to new heights by the few who are rolling in it to the point where they can pay experts to invest their money. Indeed, the global increase in rent-based income corresponds with a G20 report finding. Throughout the world, from 2000-2024, the richest 1% took 41% of new wealth, while 50% gained just 1% of it.
When it comes to neoliberal capitalism, we’re being fed a vision that’s well past its sell-by date. Like a decaying potato in the kitchen cupboard, we should preserve any positive parts and bin the rest ASAP.
Featured image via Climate and Capitalism
