Wednesday, 21 July 2010

How the other 10% live

Here's a concise summary of what's wrongest with this county that I found in one of the sources linked to in my last post - it's a point well worth repeating:

Over the last 30 years the Anglo-Saxon world has adopted the most disingenuous of economic systems. Under the guise of capitalism for all, we have produced monopoly beneļ¬ts for the few and wage serfdom for the many. Via an undue focus on nominal speculation rather than real investment, an extraordinary amount of wealth has been generated by capital and exchange rate arbitrage, but rather than trickling downwards to nourish the real economy this wealth has leveraged upwards further enriching the already wealthy and pricing out of the investment market all those who cannot amass such advantage.

As such we have produced a rentier economy of capital which licences out debt and borrowing to supplement those whose base wages can no longer sustain a decent standard of living. Hence the growing indebtedness and increasing insecurity, not just of the poor but the middle and professional classes. As such increasing numbers of people are denied the ability to truly own, trade and prosper. In 1976, excluding property, the bottom half of the UK population owned 12% of the marketable wealth; by 2003 that had fallen to just 1%. In the same period, the share enjoyed by the top 10% rose from 57% to 71%. Even when property is included, the bottom half of the population still only owns just 7% of the country’s wealth. A really free market requires that people have something to own and trade. In the rentier economy of monopoly capitalism, the price of debt and the price of access to capital keeps rising and the barrier to real market entry for those without wealth and capital climb ever higher.

As a statement of the big problem, there's nothing here I disagree with. I do, however, take issue with the writer's assertion that "David Cameron recognised all of this", because he told some big wigs at Davos that he wanted to recapitalise the poor. Reforming our dysfunctional kleptocracy is a huge undertaking and endlessly repeating that "big society" catch phrase doesn't begin to cut it.