8 men now own the same as the poorest half: what would be an economy for life for all? How do we build institutions for change?
By Duncan Green, Common Dreams followed by Chris Hedges, on Building the Institutions for Change. Further ideas about how to organize for change are included in the series of book summary highlights from the past two weeks.
It’s Davos this week, which means it’s time for Oxfam’s latest global ‘killer fact’ on extreme inequality. Since our first calculation in 2014, these have helped get inequality onto the agenda of the global leaders assembled in Switzerland. This year, the grabber of any headlines not devoted to the US presidential inauguration on Friday is that it’s worse than we thought. Last year it was 62 people who owned the same as the poorest half of the world. This year it is down to 8. Just 8 men. Have as much wealth as 3.6 billion poor men, women and children. Think about that for a moment, before getting geeky and carrying on with the rest of this post.
Every year, there are also regular attempts at rubbishing the new stat. An admirably nerdy box in Oxfam’s new paper for Davos both explains the origins of the new number (better data) and addresses the expected counterarguments.
‘In January 2014, Oxfam calculated that just 85 people had the same amount of wealth as the bottom half of humanity. This was based on data on the net wealth of the richest individuals from Forbes and data on the global wealth distribution from Credit Suisse. For the past three years, we have been tracking these data sources to understand how the global wealth distribution is evolving. In the Credit Suisse report of October 2015, the richest 1% had the same amount of wealth as the other 99%.
This year we find that the wealth of the bottom 50% of the global population was lower than previously estimated, and it takes just eight individuals to equal their total wealth holdings. Every year, Credit Suisse acquires new and better data sources with which to estimate the global wealth distribution: its latest report shows both that there is more debt in the very poorest group and fewer assets in the 30–50% percentiles of the global population. Last year it was estimated that the cumulative share of wealth of the poorest 50% was 0.7%; this year it is 0.2%.
The inequality of wealth that these calculations illustrate has attracted a lot of attention, both to the obscene level of inequality they expose and to the underlying data and the calculations themselves. Two common challenges are heard. First, that the poorest people are in net debt, but these people may be income-rich thanks to well-functioning credit markets (think of the indebted Harvard graduate). However, in terms of population, this group is insignificant at the aggregate global level, where 70% of people in the bottom 50% live in low-income countries. The total net debt of the bottom 50% of the global population is also just 0.4% of overall global wealth, or $1.1 trillion. If you ignore the net debt, the wealth of the bottom 50% is $1.5 trillion. It still takes just 56 of the wealthiest individuals to equal the wealth of this group.
The second challenge is that changes over time of net wealth can be due to exchange-rate fluctuations, which matter little to people who want to use their wealth domestically. As the Credit Suisse reports in US$, it is of course true that wealth held in other currencies must be converted to US$. Indeed, wealth in the UK declined by $1.5 trillion over the past year due to the decline in the value of Sterling. However, exchange-rate fluctuations cannot explain the long-run persistent wealth inequality which Credit Suisse shows (using current exchange rates): the bottom 50% have never had more than 1.5% of total wealth since 2000, and the richest 1% have never had less than 46%. Given the importance of globally traded capital in total wealth stocks, exchange rates remain an appropriate way to convert between currencies.’
The paper has a larger aim, setting out some initial thinking on the constituent elements of a ‘human economy approach’ that can turn around both inequality and other public bads created by prevailing orthodoxies. Here are the headlines:
- A human economy would see national governments accountable to the 99%, and playing a more interventionist role in their economies to make them fairer and more sustainable.
- A human economy would see national governments cooperate to effectively fix global problems such as tax dodging, climate change and other environmental harm.
- A human economy would see businesses designed in ways that increase prosperity for all, and contribute to a sustainable future.
- A human economy would not tolerate the extreme concentration of wealth or poverty, and the gap between rich and poor would be far smaller.
- A human economy would work equally as well for women as it does for men.
- A human economy would ensure that advances in technology are actively steered to be to the benefit of everyone, rather than meaning job losses for workers or more wealth for those who own the businesses.
- A human economy would ensure an environmentally sustainable future by breaking free of fossil fuels and embarking on a rapid and just transition to renewable energy.
- A human economy would see progress measured by what actually matters, not just by GDP. This would include women’s unpaid care, and the impact of our economies on the planet.
Duncan Green is strategic adviser for Oxfam GB and author of ‘From Poverty to Power’.
We will have to build movements and, most importantly, new, parallel institutions that challenge the hegemony of corporate power. It will not be easy. It will take time. We must not accept foundation money and grants from established institutions that seek to curtail the radical process of reconstituting society. Trusting in the system, and especially the Democratic Party, to carry out reform and wrest back our democracy ensures our enslavement.
“Power is organized people and organized money,” Gecan told me when I interviewed him in New York recently. “Most activists stress organized people and forget organized money. As organizers, we stress both.”
“We think the issues are, in a sense, the easy part,” said Gecan, who is the co-director of the Industrial Areas Foundation, the largest network of community-based organizations in the United States. He is also the author of “Going Public: An Organizer’s Guide to Citizen Action.” “When we go to a place like East Brooklyn, or South Bronx, or the west side of Chicago, you can take a ride around the neighborhood and see many of the issues right up front. What we can’t see is—is there a fabric of relationships among institutions and leaders in those areas? We spend the first year, or two, or three, building that. Identifying leaders. Identifying institutions that are actually grounded in those communities. Doing training with leaders. Raising money so that the organization doesn’t run out of money right at the start.”
“We don’t take government money,” he said. “We want independence. We want ownership. We want people to have skin in the game. We want people to be able to walk away from any situation they want to, to confront anyone they want to, without worrying about having their budget being slashed or eliminated. So we stress both. Organized people and organized money is essentially building the foundation of the organization first. And then, once that’s fairly solid, we begin identifying issues through a real, deliberate process of house meetings, individual meetings, soliciting to people. And not just doing a poll in the community. [We find out] what do you care about? What are you concerned about? By asking people what they are concerned about and are they willing to do something about it.”
This process of institution building permits organizers and activists to eventually pit power against power.
“The decision-making in those situations is not about merit, how nice you are, or how deep the need is,” Gecan said. “It’s about do you have enough power to compel a reaction from the state or a reaction from the corporate sector. When people say what are you building around, I say we’re building around power. People who understand power tend to have the patience to build a base, do the training, raise the money, so when they go into action they surprise people.”
The corporate press echoes the pronouncements of the power elites. It is blind to the undercurrents and moods of the wider society. It did not anticipate the election of Trump any more than it did the financial crash in 2008. It does not report on the lives of ordinary men and women. It shuts out their voices and renders them invisible. And it—like the power structure—will be among the last to know that the bankrupt social and political systems that sustain it are collapsing. Once the ruling ideology, in our case neoliberalism, is understood by the public as a tool for corporate and oligarchic pillage, coercion is all the state has left.
I asked Gecan what characteristics he looks for in identifying leaders. “Anger,” he shot back. “It’s not hot anger. It’s not rhetorical anger. It’s not the ability to give a speech. It’s deep anger that comes from grief. People in the community who look at their children, look at their schools, look at their blocks, and they grieve. They feel the loss of that. Often, those people are not the best speaker or the best-known people in the community. But they’re very deep. They have great relationships with other people. And they can build trust with other people because they’re not self-promotional. They’re about what the issues are in the community. So we look for anger. We look for the pilot light of leadership. It’s always there. It’s always burning. Good leaders know to turn it up and down depending on the circumstance.”
If we are to succeed we will have to make alliances with people and groups whose professed political stances are different from ours and at times unpalatable to us. We will have to shed our ideological purity. Saul Alinsky, whose successor, Ed Chambers, was Gecan’s mentor, argued that the ideological rigidity of the left—something epitomized in identity politics and political correctness—effectively severed it from the lives of working men and women. This was especially true during the Vietnam War when college students led the anti-war protests and the sons of the working class did the fighting and dying in Vietnam. But it is true today as liberals and the left dismiss Trump supporters as irredeemable racists and bigots and ignore their feelings of betrayal and very real suffering. Condemning those who support Trump is political suicide. Alinsky detested such moral litmus tests. He insisted that there were “no permanent enemies, no permanent allies, only permanent interests.”
“We have to listen to people unlike ourselves,” Gecan said, observing that this will be achieved not through the internet but through face-to-face relationships. “And once we’ve built a relationship we can agitate them and be willing to be agitated by them.”
The homogenization of culture in the wake of the death of the local press and local civic, church and other groups has played a large part in our disempowerment, Gecan argues. We have lost connection with those around us. We do not fully understand the corporate structures of power that wreak havoc with our lives both nationally and in our communities. And this is by the design of the corporate state.
“Over seventy-five years the process of community dissolution that took place in Back of the Yards has been mirrored in thousands of U.S. communities,” Gecan wrote of Alinsky’s first community organization, Back of the Yards Neighborhood Council, founded in 1939 in Chicago. “Everywhere the tightly-knit worlds of a dozen or so blocks—where workplace, church, neighborhood, recreation, tavern, and political affiliation were all deeply entwined—have given way to exurban enclaves, long commutes, gathered congregations, matchmaker websites, and fitness clubs filled with customers who don’t know one another. A world where local news was critically important and closely followed—often delivered by local publishers and reporters and passed along by word of mouth—has been replaced by the constant flow of real and fake news arriving through social media. A world of physically imposing and present institutions and organizations has morphed into a culture of global economic dynamics and fitful national mobilizations built around charismatic figures.”
“You have to organize who is in front of you,” Gecan said. “Not who used to be in front of you. In places like Chicago, Cleveland or Baltimore, the congregation used to be very robust. Congregations that were strong are weaker. We’re still organizing with them but still looking at different institutions. Schools are institutions. They’re more complicated, but they’re institutions in those neighborhoods. We’re recruiting schools in many places; sometimes it’s housing groups. Sometimes we build new institutions called East Brooklyn Congregations or United Power for Action and Justice. We’re recruiting the best of the existing, we’re working with the existing to reconnect with people and expand. And we find new institutions. It has to be institutional in some way.”
Gecan concedes that America’s future under a Trump presidency, and amid democratic institutions’ collapse and climate change, is bleak. But he warned against falling into despair or apathy.
“In 1980 in New York, all the liberal establishment, the entire establishment, was saying New York would never be as strong as it once was,” he said. “It was called benign neglect. They wrote off parts of New York permanently in their minds.” But community groups, including Brooklyn Congregations, which built 5,000 low-income homes, organized to save themselves.
“Our organizations and our leaders simply didn’t accept that judgment from the elites,” Gecan said. “Things are tough, hard, but we’re going to build an organization. We’re going to identify things we can correct and correct them—with government if we can, or without it. We’ll raise our own money. We’ll figure out our housing strategy. We’ll hire our own developer and general manager. It’s about being more flexible and plastic about solutions. It’s not relying on what the state or market says is possible. It’s creating your own options.”
Institution building is possible only if you “engage institutions or create newer and better ones—whether it’s churches or civic unions,” he said. Without these, the power in the other two sectors—corporate and governmental—dominates.
The state, he said, has learned how to manipulate familiar protest rituals and render them impotent. He dismisses as meaningless political theater the kind of boutique activism in which demonstrators coordinate and even choreograph protests with the police. Activists spend a few hours, maybe a night, in jail and then assume they have credentials as dissidents. Gecan called these “fake arrests.” “Everyone looks like they’ve had an action,” he said. “They haven’t.”
He called the choreographed protests sterile re-enactments of the protests of the 1960s. Genuine protest, he said, has to defy the rules. It cannot be predicable. It has to disrupt power. It has to surprise those in authority. And these kinds of protests are greeted with anger by the state.
No movement will survive, he said, unless it is built on the foundation of deep community relationships. Organizers must learn to listen, even to those who do not agree with them. Only then are organization and active resistance possible.
“Three things have to be happening in great organizations: people have to be relating, people have to be learning, people have to be acting,” he said. “In many religious circles, there’s some learning going on, there’s a little bit of relating going on, but there’s no action. There’s no external action. And it’s killed many institutions. In a lot of activism, there’s a lot of acting but there’s not much relating or learning, so people make the same mistakes again and again.”
“I was in Wisconsin during the [Gov. Scott] Walker situation and the reaction to it,” he said about the 2011 protests by union members and their supporters. “They did 23 major demonstrations. Fifty [thousand], 70 [thousand], 100,000 people. After the second or third I said to those people, why are you doing all this? Because as you do these, you can’t be building relationships in local communities. And you don’t know what your own members are thinking about this situation. It ended up being unfortunately the case.”
“Can we rebuild unions?” Gecan asked. “We can. It takes time. And we’re doing it in some parts of the country. Can we rebuild civic life in our cities? We have and will do more. Can we take these people on? I know we can. But it will take different tactics. It will take some very unconventional allies that will surprise people.”