September 1, 2022 • 20 mins
How can we really reduce the rates of poverty and inequality that have soared since the 1980s? While the international system allows the world’s elite and corporations to evade taxes, and all the charity industry and ‘development goals’ are but a distraction, what we really need to bring about justice and equality is a democratic world government.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:08):
Some of the most pressing issues in today’s world are poverty and inequality.
While a small some group of billionaires live in astonishing abundance and opulence,
with houses and servants and yachts and diamonds and wealth that most of us can’t even imagine,
around 700 million people live in extreme poverty,defined by the World Bank as living on less than $1.90/day.
(00:35):
And a shocking 1.8 billion people, roughly a quarterof the world’s population, live on less that $3.20/day
and fully half of the world’s population,some 3.3 billion people, live on less that $5.50/day.
Let that sink in for a moment.
(00:57):
Half of the world’s population live on $5.50/day.
In our rich and abundant world, how is that possible?
And how is it possible that, as Oxfam recently reported,
just 26 of the world’s richest individuals own more than this 50% of humanity combined?
(01:20):
What have we done?
How have we organised our global society to make this reality possible?
And most importantly, what do we want to do about it?
So, while there are many different causes of both poverty and inequality,
one of the most important causes, which people often ignore,is the fundamental structure of the world system.
(01:44):
And most critically, that the economy is largely global,
while democratic systems of regulationand taxation are only located at the national level.
This makes it virtually impossible to regulate the global economy and make it work for the benefit of everyone.
There are two basic problems.
(02:04):
Firstly, the scale-mismatch betweenthe global economy and national regulation and taxation
creates all sorts of loop-holes
which allow elites and big corporationsto escape regulation and avoid paying taxes anywhere.
And secondly, the lack of democratic structures at the global level
to make decisions regarding global economic matters
(02:25):
means that there is no means for the worlds people, or their representatives,
to come together to decide, on democratic terms, to change the system
and then to create enforcement mechanisms for the new rules.
Let me give some examples to make this clearer…
Let’s take a look at the tax system.
This is an obvious thing to look at because taxation and redistribution
(02:48):
has been the main tool by which most governmentsseek to reduce inequality and balance out their societies.
As inequality has been rising so sharply, particularly since around 1980,
we might wonder what happened to this system?
Well, most national tax systemswere developed between around 1930 and 1960.
(03:08):
This was a time when most economic and business activity happened within national borders
and rates of international, or cross-border, business activity was very low.
So the systems were designed to focus almost entirelyon taxing income and profits created within a country.
And then the government of that country used that tax money on public services in that country
(03:31):
and on redistribution between the rich and the poor,again, within that country.
However, in the 1980s economic globalisation got going
and governments decided to allow capitalto flow in and out of their countries much more easily.
The financial markets began to integrate more closely,
and businesses started expanding their operations, and their marketing, to include other countries.
(03:54):
But the tax systems didn’t really change.
As corporations found that they could pick and choose which country to operate in,
they often started to chose countries whichhad lower rates of corporate taxation.
Why wouldn’t they?
So suddenly countries found themselves all competingagainst each other to attract corporations to their countries,
each one lowering the corporate tax rate more than the last one.
(04:18):
So its not surprising that from 1980 to 2010corporate tax rates fell dramatically in almost all countries,
from around 40% to roughly 25%.
So what this means is that over this period governments got less tax money from corporations
and thus they had less moneyto invest in society and to redistribute to the poor.
(04:39):
Instead, the corporations got to keep moreof their profits for themselves and for their wealthy shareholders.
And so this obviously was a major contributor to increasing inequality.
But there’s more.
As corporations expanded and started operating in many different countries
they found that in the international system,where regulation takes place only at the national level,
(05:01):
there wasn’t a legal structure which they could use to set themselves up as a global corporation.
Instead, in each country that they worked in, their operationshad to be established as a separate, legal company in that country,
and according to that country’s rules and regulations.
So instead of becoming ‘global corporations,’they became ‘trans-national corporations ,‘
(05:24):
networks of related but separate companies operating in different countries.
So Shell, for example, or Unilever,or any other big corporation that you might think of,
is legally actually not one big corporation.
It is a network of Shell Netherlands, Shell UK, Shell Nigeria, and so on.
(05:44):
Each one is legally its own separate company.
But of course this is a bit of a myth.
Because the corporations are in fact run as one global corporation,
following the strategy and direction of the headquarters.
But it’s a very useful myth.Useful or the corporations, that is.
Because it provides themwith a way to legally avoid paying a lot of tax.
(06:08):
Here’s how it works.
Imagine a Trans-National Corproation, let’s call it STONE.
STONE has headquarters in France,
and two subsidiaries, the mining company, STONE (Nigeria) and the consulting company, STONE (Luxemburg).
If STONE (Nigeria) buys advisory services from STONE (Luxembourg),
(06:30):
the executives in the STONE headquarters in Francecan decide how much they should pay.
And since this money will never actually leave the whole STONE corporation,
they can choose to set the cost far higher than the actual market cost,
and in this way they can covertly move moneyfrom Nigeria to Luxembourg, without anyone knowing.
(06:53):
Why would they want to do this?
Well, one reason to do this would beto avoid paying taxes, by shifting their profits.
If Nigeria had a corporate tax rate of, say, 30%
and Luxembourg had a corporate tax rate of, let's say 5%,
that would be a good reason.
And if they could set up a third subsidiary in the Cayman Islands,
(07:14):
or in some other tax haven, where the tax rate was zero,
and then they could find a way to move all the profits over to that company,
Well, that would be even better. Then they'd have to pay no tax.
You get the picture.
This practice is so common its even gotits own name, ‘transfer misprising’.
And it happens a lot.
(07:35):
To get an idea of just how much , let’s recall that todaythere are around 100,000 Trans-National Corporations.
And between them they carry outabout two-thirds of total world trade.
And around half of the international trade that they carry out
is actually trade between two different subsidiaries of the same corporation.
(07:56):
So that’s around a third of total world trade.
And while not all of this intra-firm trade is carried outin order to move money from A to B so as to avoid paying tax on it,
an awful lot of it is.
It has been estimated that around $138 billion of potential tax payments is lost this way, every single year.
(08:19):
That’s a lot of money.
A lot of money that should have been public money,
that states could have used to build schools,provide healthcare, support the poor,
but instead it has become private money,
forming the increased profits of a small group of the already-wealthy elite.
The unbalanced international system, with a global economybut with regulation and taxation at the national level,
(08:43):
creates all kinds of other similar loop-holes
through which the elites and the Trans--National Corporationscan find ways to legally avoid paying taxes.
If there was a democratically elected layer of government at the global level
then all these loopholes could be closed, and this could all be sorted out.
First of all, it would make it possible to treatTrans-National Corporations as what they really are, global corporations.
(09:09):
They could be legally registered, as one business entity,
and then regulated and taxed as such.
Secondly, it would be possible to createa common rate of corporate tax for the whole world.
So then there would be no benefit in shifting money from A to B,
because it would all be taxed at the same rate anyway.
And moreover, it would be the end of tax havens,
(09:30):
who would no longer be able to have a zero rate of corproate tax.
And if we did all this, it would be possibleto tax global corporations as the one entity that they actually are.
Setting thing up in this sensible way,
with the regulation and taxation taking placeon the same scale as the business operations,
would solve so many problems of tax avoidance,
(09:51):
and thus force the elite and the corporationsto pay their fair share of tax, just like everyone else.
And with more tax money, states couldinvest more in society, making it better for everyone.
And if some of this tax money were collectedat the global level, say though a global tax body,
then the democratically elected global layer of governmentcould also decide what to do with that money.
(10:16):
Perhaps it would go to the governmentof the state where the tax money arose,
perhaps it would be redistributed to a poorer state more in need,
or perhaps it would be used to pay for efforts to solvecommon global problems, such as climate change, for instance.
Most likely it would be a combination of all of these.
And the result would be a reduction in poverty and inequality,both in countries and between countries,
(10:41):
and also the creation of a fund to finance the provision of global public goods.
You’ve got to admit, it sounds pretty good.
It could get even better.
Everything that I’ve said up to now was aboutclosing the loopholes and making the current system work.
But what if we take it a step further?
If we have a global tax body,and a democratically elected global layer of government,
(11:04):
then we could decide to implement some new global taxes,
with the aims of reducing inequality, curbing harmful behaviours,and providing global public goods, all at the same time.
Now there are in fact several proposals in this regard.
French economist Thomas Piketty, who has carried outsome of the most detailed studies of economic inequality to date,
(11:26):
has suggested a global wealth tax,in order to bring down today’s shocking rate of inequality.
According to his calculations,a tax of just 1% on all wealth could raise $1.56 trillion,
a really huge amount of money.
And that if that were transferred to the so-called ‘developing countries’
(11:47):
it would totally end poverty and completely change the world.
Or if we only wanted to the tax to kick in for the very rich,
he also suggested an alternative modelof a tax of 2% on wealth above Euro 4 million.
So if you own less than Euro 4 million,then you wouldn’t have to pay any of this tax at all.
Designing it this way would raise Euro 500 billion,
(12:09):
still a very large sum of money that could significantly reduce inequality
and do a lot of good in the world.
Another suggestion is a global financial transaction tax.
This is based on the ideas of James Tobin from the 1970s, who wanted to put a small tax on currency trading.
Ideas have developed since then, and the current idea is to puta small tax on traded shares and bonds, of just 0.1%, and on derivatives, of 0.01%.
(12:40):
This tiny tax would raise money from the financial sector,
where most of the super-wealthy hold their money,
and is also a sector which is particularly under-taxed and indeed over subsidised.
Having such a tax would slow down speculative trading,
which would be a good thing in its own right,
and it would also raise a lot of money, probably around $300 billion per year
(13:05):
predominantly coming from the wealthy,that could then be redistributed to the poor,
or again, invested in global public goods,such as the fight against climate change.
Yet another idea is a global tax on natural resources.
This could both de-incentivise the unnecessary use of finite natural resources,
and at the same time raise money for redistributionand again, for global public goods.
(13:29):
One idea is to have a small tax, of just 1%,
that companies would have to paywhen they extracted natural resources, such as oil, gas, and minerals.
It has been estimated that a 1% tax on oil alone would raise $300 billion a year.
And there are many other possibilities.
But the point is this,
(13:50):
we have the tools to deal with economic inequality,they are taxation and redistribution.
The contemporary international political system,combined with the global economic system,
has led to a situation where our national level systemsof taxation and redistribution don't work effectively,
and this is one of the main reasons that inequality has soared.
(14:12):
If we could build a democratic global level system of taxation
we could both fix our national systems and get them to work again,
and also develop a whole new global level of taxation and redistribution.
Doing this is the best way that I can think of to reduce economic inequality
and create a more balanced and fair world.
(14:32):
But 'hang on', you say, 'don’t we deal with poverty and inequality through ‘international development’?
What about the Millennium Development Goals?
And the Sustainable Development Goals?
And all the aid that governments give?
And all the NGOs doing development workto help the poor in Africa, and Asia and Latin America?
Isn’t that more important?'
(14:53):
Well, let’s take a look.
First of all, the results speak louder than any arguments that I can bring.
Despite all these efforts, there is still theshocking poverty and inequality that I have described.
So all this development stuff doesn’t really seem to be working.
Secondly, let’s look at how much money is actually given to the developing countries in government aid.
(15:15):
It is about $134 billion per year, and trending downwards.
Do you remember how much money is lost each year
due to Trans-National Corporations usingclever schemes to avoid paying tax where they can?
It's about $138 billion per year,
and an awful lot of that is due to developing countries.
(15:36):
So if we could just stop these clever tax avoidance schemes,
that would be pretty much just as effective as giving all this aid.
And as it is, the two pretty much cancel each other out.
And if we look at how much money is needed to fully implement the Sustainable Development Goals,
the sum that is estimated is $1.4 trillion per year,
(15:58):
a figure way, way above the amount of development aid currently given.
So how does anyone actually plan to implement the SDGs then?
Well, they don’t really, is the honest answer.
There are vague hopes that private sector investment will fill the gap.
But the private sector invests in order to make a profit,
not to help society,
(16:20):
and so this doesn’t really make sense.
And in any case, even if it did, there is no sign of themstepping in with anywhere near this sum of money.
But remember Piketty’s wealth tax?
Just a 1% on global wealth would raise $1.56 trillion per year.
Bingo! Done!
(16:40):
But perhaps the biggest flaw with the SDGs is that it putsthe responsibility for poverty alleviation with each government.
Each country has its own goal andis supposed to work out how to get there on its own.
So the SDGs are fundamentally ‘international’ and not ‘global’.
Instead of looking at the world system as a whole, seeing how it fosters poverty and inequality,
(17:06):
and then trying to change that system to something more just and democratic,
the SDG framework focuses the attentionon each individual country, as if it existed in a vacuum,
and then looks at what can be donein that country, and only in that country,
to alleviate poverty and inequality.
And while of course there are alwayssmall changes that can be done inside a country,
(17:29):
this framework completely distracts peopleand NGOs and development organisations
from the core global problemsthat are the main drivers of poverty and inequality.
A few years ago I attended the High Level Political Forumon Sustainable Development at the United Nations in New York.
This is the annual meeting where governments are supposed to reporton their progress to date on reaching their targets for the SDGs.
(17:55):
And it was the most bizarre, and pointless, meeting that I have ever attended.
Imagine all these state representatives, in their suits and ties,
taking around 5 minutes to present what they had done.
They had built some hospitals, they had drafted a new environment policy,
they created a re-training scheme for the unemployed, and so on and so on.
(18:17):
All things that governments do anyhow, for the benefit of their population.
Then people got to ask one or two questions and everyone clapped politely, and then on to the next country.
And this went on for a whole week,
and then everyone went home.
Nothing, absolutely nothing, was discussed about the world order, and fundamental global issues, such as tax,
(18:39):
but also sovereign debt, international trade rules,and various other features of the world system
that make things phenomenally hard for developing countries.
Sadly the notion of ‘development’, rather like the notion of ‘human rights’,
has just become a smokescreen
to make it look like we are doing somethingabout poverty and inequality and injustice,
(19:01):
when actually we are not.
The international politics of social justice has sadly become a theatre, a farce, a fake.
If we really want to bring about global justice,if we want human rights,
and if we want to reduce inequality and create a fairer world,
then we need a layer of democratically-elected government at the global level,
(19:22):
and a set of global institutions, like a global tax body,and a human rights court, and various others,
which will enable the people of the worldto make human rights and economic justice a reality.
There really isn’t any other way.
Some of the most pressing issues in today’s world are poverty and inequality.
While a small some group of billionaires live in astonishing abundance and opulence,
with houses and servants and yachts and diamonds and wealth that most of us can’t even imagine,
around 700 million people live in extreme poverty,defined by the World Bank as living on less than $1.90/day.
(00:35):
And a shocking 1.8 billion people, roughly a quarterof the world’s population, live on less that $3.20/day
and fully half of the world’s population,some 3.3 billion people, live on less that $5.50/day.
Let that sink in for a moment.
(00:57):
Half of the world’s population live on $5.50/day.
In our rich and abundant world, how is that possible?
And how is it possible that, as Oxfam recently reported,
just 26 of the world’s richest individuals own more than this 50% of humanity combined?
(01:20):
What have we done?
How have we organised our global society to make this reality possible?
And most importantly, what do we want to do about it?
So, while there are many different causes of both poverty and inequality,
one of the most important causes, which people often ignore,is the fundamental structure of the world system.
(01:44):
And most critically, that the economy is largely global,
while democratic systems of regulationand taxation are only located at the national level.
This makes it virtually impossible to regulate the global economy and make it work for the benefit of everyone.
There are two basic problems.
(02:04):
Firstly, the scale-mismatch betweenthe global economy and national regulation and taxation
creates all sorts of loop-holes
which allow elites and big corporationsto escape regulation and avoid paying taxes anywhere.
And secondly, the lack of democratic structures at the global level
to make decisions regarding global economic matters
(02:25):
means that there is no means for the worlds people, or their representatives,
to come together to decide, on democratic terms, to change the system
and then to create enforcement mechanisms for the new rules.
Let me give some examples to make this clearer…
Let’s take a look at the tax system.
This is an obvious thing to look at because taxation and redistribution
(02:48):
has been the main tool by which most governmentsseek to reduce inequality and balance out their societies.
As inequality has been rising so sharply, particularly since around 1980,
we might wonder what happened to this system?
Well, most national tax systemswere developed between around 1930 and 1960.
(03:08):
This was a time when most economic and business activity happened within national borders
and rates of international, or cross-border, business activity was very low.
So the systems were designed to focus almost entirelyon taxing income and profits created within a country.
And then the government of that country used that tax money on public services in that country
(03:31):
and on redistribution between the rich and the poor,again, within that country.
However, in the 1980s economic globalisation got going
and governments decided to allow capitalto flow in and out of their countries much more easily.
The financial markets began to integrate more closely,
and businesses started expanding their operations, and their marketing, to include other countries.
(03:54):
But the tax systems didn’t really change.
As corporations found that they could pick and choose which country to operate in,
they often started to chose countries whichhad lower rates of corporate taxation.
Why wouldn’t they?
So suddenly countries found themselves all competingagainst each other to attract corporations to their countries,
each one lowering the corporate tax rate more than the last one.
(04:18):
So its not surprising that from 1980 to 2010corporate tax rates fell dramatically in almost all countries,
from around 40% to roughly 25%.
So what this means is that over this period governments got less tax money from corporations
and thus they had less moneyto invest in society and to redistribute to the poor.
(04:39):
Instead, the corporations got to keep moreof their profits for themselves and for their wealthy shareholders.
And so this obviously was a major contributor to increasing inequality.
But there’s more.
As corporations expanded and started operating in many different countries
they found that in the international system,where regulation takes place only at the national level,
(05:01):
there wasn’t a legal structure which they could use to set themselves up as a global corporation.
Instead, in each country that they worked in, their operationshad to be established as a separate, legal company in that country,
and according to that country’s rules and regulations.
So instead of becoming ‘global corporations,’they became ‘trans-national corporations ,‘
(05:24):
networks of related but separate companies operating in different countries.
So Shell, for example, or Unilever,or any other big corporation that you might think of,
is legally actually not one big corporation.
It is a network of Shell Netherlands, Shell UK, Shell Nigeria, and so on.
(05:44):
Each one is legally its own separate company.
But of course this is a bit of a myth.
Because the corporations are in fact run as one global corporation,
following the strategy and direction of the headquarters.
But it’s a very useful myth.Useful or the corporations, that is.
Because it provides themwith a way to legally avoid paying a lot of tax.
(06:08):
Here’s how it works.
Imagine a Trans-National Corproation, let’s call it STONE.
STONE has headquarters in France,
and two subsidiaries, the mining company, STONE (Nigeria) and the consulting company, STONE (Luxemburg).
If STONE (Nigeria) buys advisory services from STONE (Luxembourg),
(06:30):
the executives in the STONE headquarters in Francecan decide how much they should pay.
And since this money will never actually leave the whole STONE corporation,
they can choose to set the cost far higher than the actual market cost,
and in this way they can covertly move moneyfrom Nigeria to Luxembourg, without anyone knowing.
(06:53):
Why would they want to do this?
Well, one reason to do this would beto avoid paying taxes, by shifting their profits.
If Nigeria had a corporate tax rate of, say, 30%
and Luxembourg had a corporate tax rate of, let's say 5%,
that would be a good reason.
And if they could set up a third subsidiary in the Cayman Islands,
(07:14):
or in some other tax haven, where the tax rate was zero,
and then they could find a way to move all the profits over to that company,
Well, that would be even better. Then they'd have to pay no tax.
You get the picture.
This practice is so common its even gotits own name, ‘transfer misprising’.
And it happens a lot.
(07:35):
To get an idea of just how much , let’s recall that todaythere are around 100,000 Trans-National Corporations.
And between them they carry outabout two-thirds of total world trade.
And around half of the international trade that they carry out
is actually trade between two different subsidiaries of the same corporation.
(07:56):
So that’s around a third of total world trade.
And while not all of this intra-firm trade is carried outin order to move money from A to B so as to avoid paying tax on it,
an awful lot of it is.
It has been estimated that around $138 billion of potential tax payments is lost this way, every single year.
(08:19):
That’s a lot of money.
A lot of money that should have been public money,
that states could have used to build schools,provide healthcare, support the poor,
but instead it has become private money,
forming the increased profits of a small group of the already-wealthy elite.
The unbalanced international system, with a global economybut with regulation and taxation at the national level,
(08:43):
creates all kinds of other similar loop-holes
through which the elites and the Trans--National Corporationscan find ways to legally avoid paying taxes.
If there was a democratically elected layer of government at the global level
then all these loopholes could be closed, and this could all be sorted out.
First of all, it would make it possible to treatTrans-National Corporations as what they really are, global corporations.
(09:09):
They could be legally registered, as one business entity,
and then regulated and taxed as such.
Secondly, it would be possible to createa common rate of corporate tax for the whole world.
So then there would be no benefit in shifting money from A to B,
because it would all be taxed at the same rate anyway.
And moreover, it would be the end of tax havens,
(09:30):
who would no longer be able to have a zero rate of corproate tax.
And if we did all this, it would be possibleto tax global corporations as the one entity that they actually are.
Setting thing up in this sensible way,
with the regulation and taxation taking placeon the same scale as the business operations,
would solve so many problems of tax avoidance,
(09:51):
and thus force the elite and the corporationsto pay their fair share of tax, just like everyone else.
And with more tax money, states couldinvest more in society, making it better for everyone.
And if some of this tax money were collectedat the global level, say though a global tax body,
then the democratically elected global layer of governmentcould also decide what to do with that money.
(10:16):
Perhaps it would go to the governmentof the state where the tax money arose,
perhaps it would be redistributed to a poorer state more in need,
or perhaps it would be used to pay for efforts to solvecommon global problems, such as climate change, for instance.
Most likely it would be a combination of all of these.
And the result would be a reduction in poverty and inequality,both in countries and between countries,
(10:41):
and also the creation of a fund to finance the provision of global public goods.
You’ve got to admit, it sounds pretty good.
It could get even better.
Everything that I’ve said up to now was aboutclosing the loopholes and making the current system work.
But what if we take it a step further?
If we have a global tax body,and a democratically elected global layer of government,
(11:04):
then we could decide to implement some new global taxes,
with the aims of reducing inequality, curbing harmful behaviours,and providing global public goods, all at the same time.
Now there are in fact several proposals in this regard.
French economist Thomas Piketty, who has carried outsome of the most detailed studies of economic inequality to date,
(11:26):
has suggested a global wealth tax,in order to bring down today’s shocking rate of inequality.
According to his calculations,a tax of just 1% on all wealth could raise $1.56 trillion,
a really huge amount of money.
And that if that were transferred to the so-called ‘developing countries’
(11:47):
it would totally end poverty and completely change the world.
Or if we only wanted to the tax to kick in for the very rich,
he also suggested an alternative modelof a tax of 2% on wealth above Euro 4 million.
So if you own less than Euro 4 million,then you wouldn’t have to pay any of this tax at all.
Designing it this way would raise Euro 500 billion,
(12:09):
still a very large sum of money that could significantly reduce inequality
and do a lot of good in the world.
Another suggestion is a global financial transaction tax.
This is based on the ideas of James Tobin from the 1970s, who wanted to put a small tax on currency trading.
Ideas have developed since then, and the current idea is to puta small tax on traded shares and bonds, of just 0.1%, and on derivatives, of 0.01%.
(12:40):
This tiny tax would raise money from the financial sector,
where most of the super-wealthy hold their money,
and is also a sector which is particularly under-taxed and indeed over subsidised.
Having such a tax would slow down speculative trading,
which would be a good thing in its own right,
and it would also raise a lot of money, probably around $300 billion per year
(13:05):
predominantly coming from the wealthy,that could then be redistributed to the poor,
or again, invested in global public goods,such as the fight against climate change.
Yet another idea is a global tax on natural resources.
This could both de-incentivise the unnecessary use of finite natural resources,
and at the same time raise money for redistributionand again, for global public goods.
(13:29):
One idea is to have a small tax, of just 1%,
that companies would have to paywhen they extracted natural resources, such as oil, gas, and minerals.
It has been estimated that a 1% tax on oil alone would raise $300 billion a year.
And there are many other possibilities.
But the point is this,
(13:50):
we have the tools to deal with economic inequality,they are taxation and redistribution.
The contemporary international political system,combined with the global economic system,
has led to a situation where our national level systemsof taxation and redistribution don't work effectively,
and this is one of the main reasons that inequality has soared.
(14:12):
If we could build a democratic global level system of taxation
we could both fix our national systems and get them to work again,
and also develop a whole new global level of taxation and redistribution.
Doing this is the best way that I can think of to reduce economic inequality
and create a more balanced and fair world.
(14:32):
But 'hang on', you say, 'don’t we deal with poverty and inequality through ‘international development’?
What about the Millennium Development Goals?
And the Sustainable Development Goals?
And all the aid that governments give?
And all the NGOs doing development workto help the poor in Africa, and Asia and Latin America?
Isn’t that more important?'
(14:53):
Well, let’s take a look.
First of all, the results speak louder than any arguments that I can bring.
Despite all these efforts, there is still theshocking poverty and inequality that I have described.
So all this development stuff doesn’t really seem to be working.
Secondly, let’s look at how much money is actually given to the developing countries in government aid.
(15:15):
It is about $134 billion per year, and trending downwards.
Do you remember how much money is lost each year
due to Trans-National Corporations usingclever schemes to avoid paying tax where they can?
It's about $138 billion per year,
and an awful lot of that is due to developing countries.
(15:36):
So if we could just stop these clever tax avoidance schemes,
that would be pretty much just as effective as giving all this aid.
And as it is, the two pretty much cancel each other out.
And if we look at how much money is needed to fully implement the Sustainable Development Goals,
the sum that is estimated is $1.4 trillion per year,
(15:58):
a figure way, way above the amount of development aid currently given.
So how does anyone actually plan to implement the SDGs then?
Well, they don’t really, is the honest answer.
There are vague hopes that private sector investment will fill the gap.
But the private sector invests in order to make a profit,
not to help society,
(16:20):
and so this doesn’t really make sense.
And in any case, even if it did, there is no sign of themstepping in with anywhere near this sum of money.
But remember Piketty’s wealth tax?
Just a 1% on global wealth would raise $1.56 trillion per year.
Bingo! Done!
(16:40):
But perhaps the biggest flaw with the SDGs is that it putsthe responsibility for poverty alleviation with each government.
Each country has its own goal andis supposed to work out how to get there on its own.
So the SDGs are fundamentally ‘international’ and not ‘global’.
Instead of looking at the world system as a whole, seeing how it fosters poverty and inequality,
(17:06):
and then trying to change that system to something more just and democratic,
the SDG framework focuses the attentionon each individual country, as if it existed in a vacuum,
and then looks at what can be donein that country, and only in that country,
to alleviate poverty and inequality.
And while of course there are alwayssmall changes that can be done inside a country,
(17:29):
this framework completely distracts peopleand NGOs and development organisations
from the core global problemsthat are the main drivers of poverty and inequality.
A few years ago I attended the High Level Political Forumon Sustainable Development at the United Nations in New York.
This is the annual meeting where governments are supposed to reporton their progress to date on reaching their targets for the SDGs.
(17:55):
And it was the most bizarre, and pointless, meeting that I have ever attended.
Imagine all these state representatives, in their suits and ties,
taking around 5 minutes to present what they had done.
They had built some hospitals, they had drafted a new environment policy,
they created a re-training scheme for the unemployed, and so on and so on.
(18:17):
All things that governments do anyhow, for the benefit of their population.
Then people got to ask one or two questions and everyone clapped politely, and then on to the next country.
And this went on for a whole week,
and then everyone went home.
Nothing, absolutely nothing, was discussed about the world order, and fundamental global issues, such as tax,
(18:39):
but also sovereign debt, international trade rules,and various other features of the world system
that make things phenomenally hard for developing countries.
Sadly the notion of ‘development’, rather like the notion of ‘human rights’,
has just become a smokescreen
to make it look like we are doing somethingabout poverty and inequality and injustice,
(19:01):
when actually we are not.
The international politics of social justice has sadly become a theatre, a farce, a fake.
If we really want to bring about global justice,if we want human rights,
and if we want to reduce inequality and create a fairer world,
then we need a layer of democratically-elected government at the global level,
(19:22):
and a set of global institutions, like a global tax body,and a human rights court, and various others,
which will enable the people of the worldto make human rights and economic justice a reality.
There really isn’t any other way.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Ridiculous History
History is beautiful, brutal and, often, ridiculous. Join Ben Bowlin and Noel Brown as they dive into some of the weirdest stories from across the span of human civilization in Ridiculous History, a podcast by iHeartRadio.