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As the old lines continue to shift, what does inequality mean in the modern global economy? And, how does the economy need to evolve to address these changes?
At the Institute for New Economic Thinking (INET) Conference, "Reawakening", in Edinburgh, Scotland, Winnie Byanyima joined Nobel-Prize-winning economist Joe Stiglitz for a conversation on Redefining Inequality that was chaired by Adair Turner.
REMARKS AS PREPARED
8 men – just 8 men! – now own as much wealth as 3.6 billion people, the poorest half of the world.
We now have levels of wealth never seen in human history, yet one in nine people go to bed hungry every night.
We live in an age of unparalleled consumption for the richest, and it’s destroying the planet for all of us.
I grew up in a village called Ruti in South Western Uganda.
I have fond memories of it. We had no electricity, running water, TV. Water was fetched from the river, firewood from the forest. We walked 3 miles to school and 3 miles back home everyday. We did our homework by the light of a kerosene lamp.
But this is not a story of poverty. My parents were teachers. We were among the better off in the village.
I could not understand or accept that I should walk to school in shoes, while my very best friend walked barefoot beside me. You know – I hid the shoes in my bag and walked barefoot! I couldn’t understand inequality then, and I still can’t. I have been fighting it my whole life.
I’m haunted by the memory of all the girls who dropped out of my school, who didn’t make it past secondary school. Girls much smarter than me.
It’s an outrage that millions of girls from poor families still face the same half a century on – denied a chance to reach their full potential.
And you know – we all lose out! Just think how many potential astrophysicists or climate scientists are today herding goats or hauling water in villages.
Friends: If we are to meet the challenges of the 21st century we need to harness the talents and genius of all of humanity, rather than squander it with a system that only benefits the fortunate few.
Very few are still trying to say that inequality doesn’t matter.
Instead they are now trying to tell us, often with a slightly mournful expression, that it is inevitable. It is like the rain. Unavoidable. The unfortunate by product of globalisation, or technological change. As if these things are in some way beyond our control.
This is why this Commission – our Commission – on Global Economic Transformation is so exciting, and why I jumped at the chance of being a part of it when Rob and Joe asked me.
Today’s inequality crisis is entirely manmade. It is the product of forty years of an economy and an economics that has benefited the 1%.
Economic thought has been an intellectual desert for so long.
The big questions ignored, millions of students schooled within the same intellectual straightjacket. With only a few brave exceptions like you Joe, trying to hold back the tide of neoliberal thought.
This is also the economics of the 1%. Academia, and the economics profession has not itself been immune from the malign influence of money. In return the world of money and politics has been only too happy celebrate the economists who tell them what they want to hear.
But I think things are finally changing. Since the financial crisis, the neoliberal consensus has stumbled on, a kind of Zombie economics. No longer credible or believed by huge majority of the public.
But if there is one thing we know from horror films - Zombies can stumble on for a long time, and they are notoriously hard to destroy!
Ultimately it is not criticism, however well researched, that will consign neoliberal economics to the dustbin of history. It is the birth of a new set of ideas, a new way of running our economies that will do this. It is this that will lead us towards the economic transformation we so desperately need.
That is why the work of this commission is so vital. So necessary. So urgent.
In Myanmar, Oxfam works with young women who make clothes, to fight for better pay and conditions.
They are the bottom of the global supply chain of companies like Gap, H&M and Zara, who make the clothes we wear here.
These women earn $4 a day, or more if they work overtime and hit high-pressure targets. They work six days a week, sometimes seven, sometimes up to 23 hours a day. If they get sick they don’t get paid. If they get pregnant they lose their job.
They have no rights, no voice at work.
Treated like “animals”. That’s their quote – not mine.
Yet by our definitions, these women are no longer ‘extremely poor’. They live on more than the globally recognised poverty line of $1.90 a day. So we have stopped counting them.
We’ve set the bar too low. We hide our heads in the sand not to see these women and the millions like them.
And this is not just about the developing world. In the United States, Oxfam works with poultry workers who have such high levels of repetitive strain injury from cutting open chickens that they can no longer close their fingers or hold their children’s hands. Such exploitation and such pain should have no place in our modern world.
Meanwhile – wealth is being sucked up to the top at a dizzying rate.
Building a new set of economic ideas, to transform our world, we must think of these young women. We must do better for them, and the billions like them.
I do believe that we are poised now, like never before, to redefine the very nature of what we mean by an economy. To move from a mechanistic, unsustainable, male, economy for the 1%, to a human economy.
The Human Economy for Oxfam is one in which governments act on behalf of the majority, and not in the interests of a tiny but powerful elite.
New technologies transform our world in ways we could never have imagined. The washing machine and piped water have given women back years of their lives. Yet all too often these new technologies of the 21st century are married to a capitalism which belongs in the 19th century – designed to push risk onto those at the bottom and profit to those at the top.
And all too often technology is not developed to meet the problems of the poor.
A human economist would ask: who controls the technology, who stands to profit from it, and are there glaring inequalities because of this? How can technology be used to create a more equal, fairer world?
What this will take is a greater and more imaginative role for Government.
Markets are a vital engine for prosperity and growth, but we cannot continue to accept the pretence that it should be the engine that steers the car, or decides the best direction to take. Markets need active management in the interests of everyone to fairly distribute the proceeds of growth.
In retreating from actively regulating and directing the economy, governments are not being neutral; they are letting the powerful take control. It is as if the teachers retreated to the classroom, leaving the bullies in charge.
Accountable, democratic government is the most powerful equalising force that humanity has ever invented. We must never forget that.
It must be a different business to the kind got us into this crisis – that create decent jobs and pay living wages, restore the environment, pay their taxes and treat women and girls equally.
The future of business lies in models that serve their workers, their suppliers and their communities, not just shareholders. That’s a break from current global trends. Take the UK: according to the Bank of England’s Chief Economist, in the 1970s only 10% of company profits were paid as dividends to shareholders. Today, it’s 70%.
Far from reject globalisation, we need governments to cooperate with each other – and put in place new muscular rules and governance on issues from taxation to wages.
We all lose out when our governments compete to drive down poverty wages and enable the richest corporations and individuals to avoid hundreds of billions in taxes.
And it is just as important to state that the market is not the answer to everything. We must be clear that there are large parts of human endeavour to which the market is simply not suited. Large parts of our common life that are simply not for sale. Our health. Our education. Our planet.
Our Commission can help to forge an ambitious but common-sense vision for a human economy purposed to benefit the 99%, not the 1%. There is no task more urgent.
Maybe I sound naïve. Maybe I sound radical. Or maybe you’ve heard it all before and think it just won’t work.
And naive compared to what? Compared to the idea that we can carry on the same and expect a different result?
That, I believe, is not naivety but the definition of madness.