Wealth inequality is a global crisis

I think you seem to be contradicting youself David. Are you now saying capitalism has never been a positive force for economic growth?

David, we thrived as a country under a mixed economy, not the growingly extreme capitalism we see now.

All democratic governments set out to run the country for the people. Ours and other governments run a deficit economy which creates conditions for our basic needs to be met with jobs, homes, education, health care, infrastructure, defence, etc. We balance that deficit by paying taxes.

Because it benefits us we pay these taxes related to how we benefit from the goods we are able to buy, jobs we are able to earn from and earnings from savings we are able to make. These taxes we expect to be progressive with little tax for meeting a basic need growing progressively as we exceed that need - except for taxation on exceptional earnings from assets.

This is crippling countries where power is bought and extremists take hold. And it is crippling us financially with government debt growing, poverty and lack of ability to meet basic needs growing, while extreme wealth grows to balance these retrograde steps.

That extreme wealth does not grow the country for all. The shares, pensions, property, businesses you referred to are assets. They are assets that price out the vast majority because lack of progressive tax on extreme wealth made initially from earnings from funding government debt. The holding of government bonds is also an asset. For every pound we or the government owe someone holds an undertaxed asset at the cost of other citizens basic needs.

Well said DaisyAnne!

“David, we thrived as a country under a mixed economy, not the growingly extreme capitalism we see now.”

DAR here is a direct question

The UK has already sold off many companies and utilities to foreigners and borrow not to increase growth but to increase benefits, where do you expect the gain the profit to end up.?

2nd question
We choose to borrow, why do you think that an investor in another country should pay for our benefits.?

My own view is that we should not worry too much about the wealthy individuals like Musk or Bezos they are investing under the control of the US government and all above board. But they are relative small fry with $2 or 300bn each, the real wealth is the Sovereign Wealth Funds, there are many over $1 trillion, Norway is close to $2 trillion, China has 4 such funds all used to develop Chinas national interest overseas, under direct control of the communist government.

If you believe that such foreign investment funds are interested in the welfare of UK pensioners you are living in fairy land, these are the people who are financing despotic rulers to repress their own people. That is of course no problem to China it’s the way they hold power at home.

David - could you rephrase your first question? I'm having difficulty understanding what you want me to answer. It's a bit of a jumble (that happens to us all). I'll answer it later if you can clarify the actual question.

Well I will continue to worry about such a large percentage of the world's wealth being controlled by a few people. People like Musk and Bezos etc do not have to run a country, yet they have wealth in excess of the GDP of many countries. They are not elected, deposed etc but they have immense influence over governments. Many make their money by betting on the failure of companies and countries economies, hence many got extremely rich post 2008 following the banking crash as they bought up stock very cheaply.
Norway? Well I don't worry about Norway, the use of their sovereign wealth fund is strictly controlled and is used for the benefit of their population. China is a different matter, it's bought it's way into pretty much every continent and it's control of infrastructure and resources in those countries is extremely worrying. With the US seemingly prepared to give away it's soft power to China, this is doubly worrying. Given that many of the richest people in the world have strong trading/manufacturing links with China (and India to a lesser extent) and rely on China for some important raw materials,their power to influence government is potentially an issue.
So, yes I will continue to worry about the likes of Musk, Bezos, etc

I have to say that I'm somewhat bemused by the introduction of sovereign wealth funds to this discussion. I don't see what it has to do with the fact that the wealth acquired by the super rich is not wealth they have 'created' but is either wealth they have sucked out of domestic economies or wealth which their forebears have sucked out of domestic economies and which has been passed down to them intact, or nearly intact.

I'll revert to my point about the source of money.

In countries with a 'sovereign currency' the nation's money is solely created by the government, or by banks under licence to create (though this bit of the story is more complex). The current economic 'orthodoxy' in most of these countries is such that money inevitably flows up to the a;ready wealthy and they use their wealth as a political tool to persuade governments to run tax and regulatory regimes which allow such acquisition and ensure that they contribute less, in percentage terms, to the country which provides their money and the infrastructure that enables them to acquire more of it.

I don't see how anyone can complain about the results of economic orthodoxy then deny that there is any other way to run an domestic economy.

Orthodoxies are not ultimate truths. They are just predominant beliefs. 99% of a population believing that the world is flat doesn't make the world flat...

I'm also bemused by this concept of a 'deficit economy'. What does that mean?

I'm with you, foxie

Money is just a token though Maizie and I think everyone knows its printed by governments. It's just a token and its value largely depends on the confidence that lenders, borrowers, and the broader public have in it. I'm not sure where the relevance of it being issued by the banks is relevent.

Orthodoxy in economics has changed and changed a lot over recent times. It's gone from "classical economics to Keynesian economics, then to monetarism, and more recently to behavioral economics and other heterodox approaches". I had to look this up to be sure and was suprised at how many changes have at least been considered.

This seems to take us away from wealth inequality though or perhaps I misreading of missing something? That's always a possibility

This seems to take us away from wealth inequality though or perhaps I misreading of missing something? That's always a possibility

You are missing the fact that it is the, what you call 'monetarist' economic doctrine which is in the ascendant and has been since Thatcher and Reagan adopted it in the 1980s, which is the cause of the global wealth problem. It is still the dominant orthodoxy It informs the US economy, the EU economy and the UK economy. It certainly informed the current disastrous Argentine economy. There will be others.

I'm not sure that you appreciate the difference between the different schools of economic thought, or that implementation of different strategies produce different results.

I certainly don't leave that out of my thinking. In fact I've talked about it myself elsewhere. I agree it's still the major go to template including it's effect on stifling this government.

Shall we not make personal remarks? It was all going so well on a platform where generally nothing but opinion and bias matter. It's good to be able to believe we can all learn from one another. That really is a universal truth!

Last post was to Maizie.

In countries with a 'sovereign currency' the nation's money is solely created by the government, or by banks under licence to create (though this bit of the story is more complex). The current economic 'orthodoxy' in most of these countries is such that money inevitably flows up to the a;ready wealthy and they use their wealth as a political tool to persuade governments to run tax and regulatory regimes which allow such acquisition and ensure that they contribute less, in percentage terms, to the country which provides their money and the infrastructure that enables them to acquire more of it.“

A government can create as much money as it wants but if it has no value it doesn't benefit the population, the value of a currency has to be backed by resources, if a nation has no resources the currency has little value. That’s why Norway has a very strong economy because it’s exploiting lot of resources the surplus is set aside and invested for the future.

DAR

I cannot see how discussing the effect of implementing a particular economic strategy takes us away from wealth inequality when it is the underlying cause.

Solutions to the problem of global wealth and its acquisition directly contravene the theories underlying monetarism/neoliberalism.

“DAR here is a direct question

The UK has already sold off many companies and utilities to foreigners and borrow not to increase growth but to increase benefits, where do you expect the gain the profit to end up.?.

Maybe I ought to answer it for you

When foreign companies invest in the UK they expect to make a profit and take money away from us.
The UK has allowed this for decades why are we surprised we have no money

A government can create as much money as it wants but if it has no value it doesn't benefit the population, the value of a currency has to be backed by resources, if a nation has no resources the currency has little value. That’s why Norway has a very strong economy because it’s exploiting lot of resources the surplus is set aside and invested for the future.

The state can indeed 'create' as much money as it wants, but it is limited by what goods and services are available to be purchased with it. The oft quoted examples of hyperinflation were caused by a shortage of resources to be purchased.

The UK currency has value, David . It fluctuates over time, but not wildly. What do you think is backing it?

But this has nothing to do with the global proliferation of extremely wealthy individuals so I don't see any point in pursuing this argument.

The UK has allowed this for decades why are we surprised we have no money

But we don't have 'no money'. It is not a finite resource.

There is no doubt money and power is becoming concentrated in fewer hands, it’s a global problem.

So how do we change the system??

By re-introducing regulation and supporting economies where public services and private companies can work side by side? One, by reponsible and efficient use of public funds including taxation, and by investment in manufacturing?

By stopping the acquisition of so much wealth, rather than trying to tax away what they already have. Truly progressive taxation would be a good start.
But also inheritance taxation, cracking down on trust funds by limiting the amounts that could be put in trust, maybe?

Changing rules on lobbying? Limiting the amounts of donations allowed to political parties or even state funding them?

It seems extraordinary to me that public employees are bound by very strict rules on accepting gifts (basically they’re not allowed to) because of the possibility of corruption, but MPs can accept freebies and £1,000s. It lays them open to being influenced by those with the biggest purses.

When poorer people pay a larger percentage of their meagre income in tax of one kind or another than the richest and when the richer you are the easier it becomes to avoid paying IHT and CGT, surely that's an imbalance which needs addressing.?

MaizieD

By stopping the acquisition of so much wealth, rather than trying to tax away what they already have. Truly progressive taxation would be a good start.
But also inheritance taxation, cracking down on trust funds by limiting the amounts that could be put in trust, maybe?

Changing rules on lobbying? Limiting the amounts of donations allowed to political parties or even state funding them?

It seems extraordinary to me that public employees are bound by very strict rules on accepting gifts (basically they’re not allowed to) because of the possibility of corruption, but MPs can accept freebies and £1,000s. It lays them open to being influenced by those with the biggest purses.

I would back pretty much all of that but it doesnt address international companies and banks controling hundreds of billions. which is a major problem

MaizieD

^The UK has allowed this for decades why are we surprised we have no money^

But we don't have 'no money'. It is not a finite resource.

You have just explained that while money isn't strictly finite in a technical sense, it has practical limits—like inflation, currency stability, and economic growth an that, in the real world, governments must respect this. Relying solely on printing money ignores these constraints and can lead to serious economic problems. There is no instant answer and politics will sway the answer whichever flavour the party in power is. The fact that money isn't finite, while true, means very little on its own.

The far-right/alt-right gain significant economic and political power through ownership of capital, influence over policy, and access to resources. They can shape laws, regulations, and economic policies to maintain or enhance this power, running the economy for the very, very wealthy giving those with the most control over the economy the greatest power in the process.

Power in the hsnds of the far-left will always move the economy to favour organised and strong unions. They exert considerable influence over wages, working conditions, and workers rights. They can push back against corporate power and advocate for fairer economic arrangements.

When policies lead to more equitable wealth distribution, power can become more dispersed, more evenly spread. This means increased influence for wider segments of society, such as middle and lower-income groups, through democratic processes, social programs, or worker rights. This provides the greatest spread of power.

Control of a diverse economy gives power in a way which printing money, simply because you can, never will.

A healthy, educated and prosperous middle-class is essential for economic growth and stability.

Without it you return to a two-tier system where too much wealth is held by two few as a method of control.

The cuts in the NHS, education and support for small businesses have all had a knock on effect that has put more and more pressure on Universities and small companies.

Higher taxation and investment in public services whilst not the complete answer, is certainly part of the solution.