denpasar
Resolution: Justice, Sustainability and Diversity – Our Progressive Agenda

In view of the dramatic increase of inequality within and among different countries, but also due to social movements and protests in numerous societies, as well as a rise in international flight and migration the social question is again at the heart of social debate. One of the main drivers of the discussion is more than ever the level of inequality. Less inequality leads to more economic prosperity, social mobility, intergenerational justice, poverty reduction, health and life opportunities, social cohesion and political participation. Fighting inequality remains one of the key tasks of the coming years, because for the future constitution of the world and the cohesion of societies it will be less relevant if globalization leads to a further increase of the wealth of the rich. On the contrary, the decisive factor will be if we can manage to reduce the differences in opportunities of social, economic and cultural participation and to share the burden of ecological challenges in an equitable manner.

But the trends clearly go in another direction, e.g., in terms of wealth concentration, increasing differences in earned income, the decoupling of sustainable economic growth and material prosperity, as well as regarding the quite different levels of adaptation measures to tackle the consequences of climate change. Even the Global Risks 2014 report of the World Economic Forum in Davos estimates that the considerable income disparities will cause “severe damage” in the next decade worldwide and regards this as one of the most likely risks. To stop and reverse the growing inequality trend is a central task for the coming years.

19 – 20 September 2016, Denpasar, Indonesia

 

 

The Inequality Dimension Today

The deregulation of the financial markets and accelerated globalization of the goods, financial and labour markets has drastically changed the income and wealth distribution in the past thirty years worldwide. While income disparities between rich and poor countries, as measured in terms of GDP per capita, have slightly decreased since 2007 -after a strong increase between 1980 and 2000- due to high growth rates in emerging and developing countries and their increased demand for commodities on third markets, within the majority of countries these disparities have gone up and are still on the rise. Many countries, particularly in Asia, are in a process of catching up with the West, but those who profit mostly from it are the elites (the top ten percent), and to a lesser extend also a new middle class, while the benefits for those on the lower part of the income scale are almost non-existent. In the northern hemisphere the middle class gets under pressure as a result of the huge concentration of wealth and liberalized labor markets. This is why global inequality, which is the combination of inequality within and among states, continues to rise.

An increasing internal income inequality is the result of various trends which are linked to each other: Firstly, the functional income distribution between earned income and capital income has changed worldwide to the disadvantage of wages. Secondly, the differences in earned income have become bigger and sometimes increased dramatically. This is where we see a combination of a rise of atypical employment conditions on the one hand and a multiplication of salaries in the boardrooms, on the other. Also due to asymmetric trade relations in many places economic growth is decoupled from material prosperity of large parts of the population. Because of a growing commodities demand and unfair value chains, many countries have rested on an extractive growth model which might promote a high economic growth at the national level, but fails to be inclusive. In addition, public fiscal and transfer policies hardly or less than before rebalance the individual income distribution based on the market. In many countries progressive taxes have been significantly reduced in recent decades. Almost everywhere the taxation of capital income is considerably less than taxes on earned income. A whole industry has established around international corporations with the only aim to avoid taxes (called euphemistically tax optimization).

Much stronger than the unequal distribution of income is the inequality of wealth. The most recent Oxfam study on inequality shows that at the global level the motto of the American Occupy Movement “We are the 99 percent” is not an exaggeration any more at all and that we are living in a veritable economy for this very one percent: 1% of the world population possesses more than the other 99% together. Whereas in 2014 the 80 richest persons in the world possessed as much as the poorer half of humanity, in 2015 these were only 62 persons, and it seems that the vertex of inequality has not yet been reached.

In view of 400 million working poor who in spite of having a job live in extreme poverty, the high percentage of informal work, especially in the countries of the South, three quarters of mankind who live without social protection and a massive violation of the rights of workers and trade unionists, it becomes clear that increasingly deregulated or not regulated markets have contributed significantly to the current level of inequality.

A major task that is part of the fight against inequality is the fight against gender inequality. All too often, women and girls face disadvantages and discrimination. This can be witnessed in all fields of society, including the labour market, health, education, politics as well as at home when it comes to tasks in the household. Empowerment of women is not only important for the personal development and freedom of women. It is also crucial for the social and economic development of countries around the world.

Economic inequality has massive social effects: Firstly, it is a normative problem of justice, i.e. it exceeds by far what the majority of people in many societies generally consider to reflect performance or to be fair. But a largely unequal distribution of income and wealth also has a very concrete economic, social and political impact. In short, strong and continuous inequality is detrimental to economic prosperity, and it is the root cause for many negative social developments. It reinforces the existing social structure of opportunities and power and thus impedes social and intergenerational mobility and hinders the fight against poverty. It threatens social peace, political stability, encourages extremism and in the long term undermines democracy. Also in the supposed established democracies increasing material inequality leads to a dominance of political decision making by financially strong elites. Thus, the power of the people gradually becomes the power of money or turns into a plutocracy. At the same time, inequality enhances a feeling of being left behind on the part of the people at the lower income level of society and therefore creates a breeding ground for populism and extremism in many places.

Another downside of the massive economic growth processes of the last 30 years is the overexploitation of natural resources. Today the strain on the earth caused by humans has reached a degree where sudden global environmental changes cannot be excluded any more. This problem is basically also linked to issues of global justice, as the burdens and risks resulting from environmental pollution and climate change are shared very unequally within societies and among countries. It is obviously unfair that those countries who have contributed the least to climate change and often only have low adaptation capacities are the most affected ones. Many countries of the global South, especially the small and big island states and the least developed countries suffer massively from the effects of extreme weather phenomena, the rise of the sea level and the threat to their food safety because of droughts, flooding or severe storms. For them, climate change has become a real catastrophe and an existential threat already today. Those countries which because of their consumption patterns and resource consuming, non-sustainable economic and growth models have essentially caused the current environmental problems still suffer far less from those consequences and often have the possibility to minimize their risks, e.g., through well-developed insurance systems and advanced technologies.

Precisely in times of globalization, quick social transformation, a decline of traditions and a media and culture industry under pressure of the mainstream and capital, the protection and conservation of cultural roots is becoming more indispensable than ever, as the cultural identities of current and future generations are based upon these roots. With the aim to spur the interest in the cultural richness within a society and to promote a differentiated understanding of culture, it is necessary, in addition to financial investments in the cultural infrastructure and education, to deeply reflect on the cultural heritage. The challenge for countries across the world is not only to maintain the material and immaterial cultural heritage in arts, music, language or architecture passed on from generation to generation, but to also guarantee comprehensive access to this heritage for the citizens of the respective country.

Yet, cultural diversity, arts, cultural sciences and the creative economy are not only essential for identity purposes, but also for social justice and a lively democracy. They create value orientation and participation opportunities, they provide entertainment and function as a social corrective. Therefore, a key point of a progressive political agenda is to create an enabling environment and favorable framework conditions for the development of arts and to ensure participation opportunities in cultural activities. Who demands justice must promote social and cultural participation in the same way and fight against exclusion.

This makes it clear that human development as a whole needs to be shaped in the next decades (and from 2050 onward for nine billion people) in a social and cultural way which is more equitable, but also needs to stay within the ecological limits of the earth system.

 

The Tasks Ahead: Developing Political Approaches for Fighting Inequality

The lack of institutional transparency continues to pose a tremendous challenge. Our obligation is to promote mechanisms for transparency and accountability, as well as to provide legal instruments which allow citizens to report cases of corruption. We must not allow corruption, diversion of public resources or non-compliance with the laws in our countries.

 

PROGRESSIVE ALLIANCE offers the possibility for a strong alliance of progressive political family, trade union movement and civil society actors aiming to progress around the strands of such a progressive agenda.

19 – 20 September 2016, Denpasar, Indonesia