OECD Advises Countries to Curb Extreme Inequality

OECD Advises Countries to Curb Extreme Inequality

It’s the Real News Network. I’m Sharmini Peries coming to you from Baltimore. The OECD, the Organization for Economic Cooperation
and Development, is well known for promoting neoliberal policies, not much different than
the International Monetary Fund or the World Bank. This week the OECD published a report titled
“The Role and Design of Net Wealth Taxes in the OECD,” which takes an unexpected turn,
promoting the use of taxes on capital, and even estate tax, a tax on your inheritance. Michael Roberts has been working in the City
of London for over 30 years and is the author of several books, “The Great Recession” and
“The Long Depression.” He joins us from London. Michael, thank you so much for joining us
today. Hello, Sharmini. On the report, “The Role and Design of Net
Wealth Taxes in the OECD,” give me in one minute what the report contains that is useful. I think the first thing it says is that, first
of all, wealth inequality is much more serious and much more important in many ways than
income inequality , because wealth inequality generates more income inequality, and rich
people have more power and influence and opportunities, and are able to generate income without work. One of the facts it points out in the report
is that someone working for, say, twenty thousand euros a year and gets its money from capital
is a much more powerful position than somebody having to work for twenty thousand dollars
a year. And working for twenty thousand dollars is
hard work. Getting income without doing anything at all
is easy, and yet it also gives you much more power. So wealth accumulation reinforces the situation. Wealth begets wealth, says the report. And that gets more power. And that means we need to do something about
it because this situation will continue to get worse. The rich will get richer and the poor, that’s
the rest of us, will get poorer, at least relatively. That’s what the report tells us. It’s a really astounding report. So Michael, last time we spoke back in October,
I think, about the IMF’s murmurs about rising inequality in the world. And now we see that the OECD is joining this
trend in terms of trying to address this inequality. Why is the OECD very, which is a very neoliberal
and anti-taxation kind of organization, adopting language that we have not heard them use before? Yes, it’s a very surprising development. As you say, the OECD has a reputation for
being neoliberal, as some of us say on the left, which means that they’re interested
in preserving the interests of capital and not the interests of labor and generally trying
to raise profitability for most economies around the world, for the sections that own
the means of production. And this is a bit of a surprising report. And they’re saying that wealth inequality
is much more important and much worse than income inequality, and something’s got to
be done about it, which is a very big surprise. And I think that’s because they’re concerned
the level of inequality in wealth globally, and in most of the big economies, is so, getting
so extreme. We haven’t seen these levels probably for
150 years. Then it could lead to a breakup of the social
fabric and political protests. And they recognize that something’s got to
be done about it. All right. Now, we’ve known about this growing inequality
for a very long time. And I suppose the 2013 book by Thomas Piketty
may have brought it further into light, the French economist who wrote the book “Capital
in the 21st Century.” Now, since then they’ve had an opportunity
to address this issue, but not much has happened interim, and now they’re bringing it about. So it raises the question of, you, know, how
serious are they? Are they willing to change the laws of the
OECD countries, and are they willing to really go out and bat for these policies when it
comes to national governments adopting such policies? I think there’s little chance of it. I mean, just to give you a few extra facts
which are not in the OECD report that the U.N. economists came out with, they found
that the top 1 percent of wealth holders in the world, and 51 percent of all the wealth
in the world, and the top 10 percent and 85 percent of all the personal wealth in the
world, and the richest 1 percent, at the rate that they are increasing their wealth 6 percent
a year, will have two thirds of the world’s wealth by 2030. It’s a staggering figure. The level of wealth the top 1 percent is growing
at twice the rate of the level of wealth for the rest of us in the world’s population. Of course, the vast majority of the world’s
population doesn’t have any wealth at all. It will mean that the top 1 percent would
have, can you think of this, $305 trillion, worth of wealth, in forms of financial assets,
property, and cash savings. More than double. Now, that’s a massive increase, and that’s
why the OECD is being forced to think about it. But I, I’m, I have no doubt that none of the
governments that we look around the world, the major governments are going to do anything
about this. We know that the U.S. administration under
Donald Trump, far from looking at reducing the wealth of the rich, is adding to the wealth
of the rich by cutting corporate taxes and income tax for the rich. In other countries, the mainly center-right
governments in Germany, in Sweden, in Britain, in Japan, none of these governments have any
program at all for reducing the level of wealth inequality, let alone income inequality, or
any program to do so or any intention to do so over the next few years. Robert, what they call the inheritance tax,
or the state tax, or what the Republicans in the U.S. call the the death tax, they are
not very popular, because of course this means that you can’t, you know, transfer all of
your wealth onto the next generation , your children, and then maintain the elite ruling
class we have in the in the U.S., and of course beyond, all over the world. How could we attack this? How could the EOCD, if you had the opportunity
to advise them, how can it be done? Well, there are several things, I think, Sharmini. First of all, is it the best way to tax people
who are receiving benefits from when their parents or relatives die? Is that the most important issue, the personal
wealth tax, which is the view of Thomas Piketty and others, the economists you talked about. Or is it more important to have real control
over the concentration of capital which exists in the big corporations, the big companies,
which control our means of production and lead to the generation of this huge income
growth and wealth growth to the top 1 percent. Seems to me we should be looking in that area. The OECD admits that taxing incomes would
not actually do much to change the level of wealth inequality. And then Looking at the taxation, maybe, of
it inherited wealth, and going further, perhaps, only four countries of the world actually
tax wealth. Everybody taxes, governments tax income but
they don’t tax wealth. Very few countries. And the number of countries prepared to do
that is actually falling, not rising. So it seems to me that looking at personal
wealth is only one area. The way we really need to look at what’s going
on with corporate wealth and the concentration of capital there. And one other area, Sharmini, is the huge
amount of havens where no wealth is taxed at all. Daniel Zachmann, who is a colleague of Thomas
Piketty, did a special study a few years ago and he found that 8 percent of all the wealth
in the world is just being hidden away in tax havens like Panama, you know about the
Panama Papers that’s revealed this, a huge amount of wealth that’s just not taxed at
all, hidden away perfectly llegally in many cases, by the various laws. It seems to me that first we must stop the
tax havens which are taking place internationally. Secondly, we must look at the concentration
of capital in the big corporations. A Swiss institute did a survey which found
147 companies, just 147, control 70 percent of all the corporate wealth in the world. And if we had some sort of control over how
they generate that wealth and how they distribute it by controlling them, then we’d be in a
much better position to reorganize the inequality of wealth. Just looking at trying to reduce the amount
of income that the top 1 percent has I don’t think it’s going to be sufficient. And the OECD agrees with that. All right. Robert, then if the IMF and the World Bank
and the OECD and the European Central Bank, ECB, they’re very effective at demanding and
forcing nation states into implementing austerity measures, for example. So in effect, if these institutions took the
position that there must be better distribution of wealth in a country, those policies need
to be put in place, inequality must be reduced, the gap must be closed, and so on. If they were to have policies of that nature
they are quite capable of implementing them, aren’t they? They are perfectly capable of implementing
them. It’s a question of political will and political
action. As I said earlier, when most of the governments
which are in power at the moment, administrations of the major economies where this will be
necessary, governments have no such program. In fact, the opposite. They are supporting the policies and interests
of capital rather than the interest of the 99 percent. So here we have the OECD, a respected international
economic agency which is supposedly providing advice and research about what should happen,
and it’s telling the governments of, the major governments of the world, the inequality of
wealth is way too high, much even worse than inequality of income, which is bad enough
and getting worse, and something must be done about it, whether it’s taxing on wealth or
whatever. And we have a bunch of governments, the major
governments who represent, say, in the G20, all of whom virtually have no intention of
doing anything about this. It reminds me, Sharmini, of the arguments
about climate change. The science shows that the world is heating
up. Global warming is getting out of hand. It’s going to damage the world’s natural resources
and ruin people’s lives. But governments are not prepared to do anything
serious about it. So it’s down to political will and political
action. And your viewers and readers and listeners
should be aware that it’s really a question of political action, not some sort of impossible
task that can’t be turned around. I’ve been speaking with Michael Roberts, the
author of “The Great Recession” and “The Long Depression.” Michael, I thank you so much for joining us
today. Thank you. And thank you for joining us here on the Real
News Network.

Author: Kennedi Daugherty

13 thoughts on “OECD Advises Countries to Curb Extreme Inequality

  1. Shocking…the OECD is actually making sense…although they seem to be backing the idea to prevent revolution. Otherwise I think they would keep the status quo.

    We work and we vote and we pay taxes but all of the politicians are in the pockets of the wealthy. But real wages haven't increased in decades while increasing profits go to corporations. We should be making more, not less, because of automation just based on increased productivity alone should lead to higher incomes. But the skills required to run the machines warrant a higher pay scale.

    The ironic thing is that if there were less inequality workers would have more purchasing power and the economy would be more stable. It just takes more work than politicians are willing to put in

  2. Common Americans must lead a change at home first with a global goal in their sites. Ultimately, this will require activism throughout the world. First, we must educate and assure that the message of wealth equity reaches the people beyond opposing propaganda. We don't need to destroy the wealth & income advantages of meritocracy, but we should equalize the starting points for individual achievement where success is derived through innovation & dedicated work instead of the silver spoons of inheritance.

  3. Each one of us has the ability to build wealth for ourselves and our families. When we save and invest we earn money without work the same as the rich. Overtime that money will grow for you. No, it won't make you Bill Gates rich but it will be there when you need it. If you want Bill Gates money you need to create something fabulous and build a innovative business.

  4. Estate Taxes will never reduce Inequality as the Taxes are collected by the Governments which already are functioning well over their means. The way forward could be a mix of Both Estate Taxes and a Healthy Annualized wage Increase for the Working Class based on Real Inflationary figures imposed on Employers and a more realistic Benefits to the Corporate Executive Class in the Society.

  5. Of course the media trumpets racial equality, raises in salary, etc but not so much as to reduce violent resolution but to improve the general mental health. All segments are experiencing higher suicide rates, working men and children especially. The elites need the workers beneath then to be able and the extractive economy has reached the maximum the people's mental health can endure in spite of the massive media campaign to convince us we live in splendor.

  6. Income inequality is a “surprise”? Hasn’t the OECD or anyone read Thomas Piketty’s book “Capital in the 21st Century”?

  7. These suggested reforms will never be put in place because the super wealthy control government economic and tax policy in all the relevant countries. The OECD knows this.

  8. Do OECD or any other economic advisor and trade organization (WTO, World Bank, IMF etc.) still have any credibility left to tell people what's working or what's not?
    They are profit seeking private companies outside of the democratic system not bound to any obligations to the common people.
    They are funded by the corporations

    What do you expect?

  9. You really want to know how sick this all is, what the great plan of the fundamentalists psychopathic capitalist is. To drive the middle class into being poor and as many as possible into poverty, why, to conserve the planets resources, to make sure the majority can not consume, yet in the most schizophrenic fashion imaginable to push mass consumption and in public display of hypocrisy the 1% publicly consume as much of the planets resources as they possibly can to blatantly publicly pose when consuming those resources this celebrated by main stream and generating pollution at individual rates so greater then would make small towns of regular folk ashamed for being wasteful.
    So how can they do all three at once, push us into poverty so we can not afford to consume beyond rags as clothes, gruel as food and a hovel for a home and attack as with advertising demanding we consume more and use main stream media to gloat over their wildly excessive consumption and generation of pollution. Three goals that compete with each other and contradict each other, how, why because sadly the reality is they are born and bred psychopaths, our countries are being run by the insane and we are letting it happen.
    In the end violent revolution, they end up kicking in the wind and the insane cycle starts over (with the bunch of psychopaths, who hung the psychopaths with money, so the psychopaths without money could seize power and that money, with most of the rest of us just suffering in the idiotic upheavals).

  10. the system works as designed by the annunaki off world controllers to pay an off world dividend to their home planet nibiru. the 1% are david ickes reptilian blue blooded hybrids. thats whats at the center of capitalism and the rape of planet earth and the competitive survival based economy. until more people know the truth the wheel will keep turning. one of the reasons for the rush to ai and robotics is thats how they plan on ruling us in the future when no human will fight for them anymore.

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