- Ann Robertson and Bill Leumer respond to Joseph Stiglitz by pointing out that some of the inequality arising out of capitalism has nothing to do with rules further rigged in favour of the wealthy:
Although there is certainly significant substance to Stiglitz’s argument – policy decisions can have profound impacts on economic outcomes – nevertheless capitalism is far more responsible for economic inequality because of its inherent nature and its extended reach in the area of policy decisions than Stiglitz is willing to concede.
To begin with, in capitalist society it is much easier to make money if you already have money, and much more difficult if you are poor. So, for example, a rich person can buy up a number of foreclosed houses and rent them out to desperate tenants at ridiculously high rates. Then, each time rent is paid, the landlord becomes richer and the tenant becomes poorer, and inequalities in wealth grow.
More importantly, at the very heart of capitalism lies an incentive that leads to the increase of inequalities. Capitalism is based on the principle of competition, and businesses must compete with one another in order to survive. Each company, therefore, strives to maximize its profits in order to achieve a competitive advantage. For example, they can use extra profits to offset lowering the price of their product, undersell their opponents, and push them out of the market.
But in order to maximize profits, businesses must keep productive costs to a minimum. And a major portion of productive costs includes labor. Consequently, as a general rule, in order for a business to survive, it must push labor costs to a minimum.
Capitalism is a way of life, and for that reason it generates its own peculiar culture and world view that envelopes every other social sphere, a culture that includes competition, individualism, materialism in the form of consumerism, operating in one’s self-interest without consideration for the needs of others, and so on. This culture infects everyone to one degree or another; it is like an ether that all those in its proximity inhale. It encourages people to evaluate one another according to their degree of wealth and power. It rewards those who doggedly pursue their narrow self-interests at the expense of others.
- Meanwhile, Mark Serwotka discusses how privatized social services in the UK are predictably resulting in the public paying more to provide less service to recipients. And Stuart Trew and Scott Sinclair write that the next generation of trade deals will only further entrench corporate power at the expense of mere people.The culture of capitalism, because of its hyper individualism, also produces an extraordinarily narrow vision of the world. Viewing the world from an isolated standpoint, individuals tend to assume that they are self-made persons, not the products of their surrounding culture and social relations. So the rich assume that their wealth has been acquired through their personal talents alone, while they see those mired in poverty as lacking the ambition and willingness to work hard. People are unable to see the complexities underlying human behavior because of the atomization of social life.
It is in this more subtle way that capitalism induces growing income inequalities. Because of their intensely competitive environment, politicians are more vulnerable to this capitalist culture than most. Capitalist culture engenders a mindset among politicians that leads them to craft public policies in favor of the good people, the rich and powerful, and turn their backs on the poor or punish them with mass incarceration. They think it entirely natural to accept money from the wealthy in order to fund their re-election campaigns. And the more the inequalities in wealth grow, the more this mindset blinds politicians to the destructive implications of these “natural” decisions.
- Jordan Press reports on Canada's ineffective response to tax evasion as a prime example of how the Cons are going easy on those who need and deserve it least - as a lack of CRA resources is resulting in hundreds of billions of dollars being moved offshore and costing the public billions in revenues.
- David Dayen warns that ineffective regulation is leading to yet another financial bubble, this time in capital markets.
- Finally, Humera Jabir writes that the Cons' tinkering with the temporary foreign worker program isn't doing anything to prevent the worst abuses of powerless employees. And the Alberta Federation of Labour points out that the TFWP is still being used to slash wages in half compared to the market rate for Canadian workers.