Читать книгу The Uprising of the Pandemials - Federico Dominguez - Страница 13

The central issue here is meritocracy. During the post-war era, the belief that everyone had the same chances of success and that their accomplishments were a result of their effort was part of the national spirit of many countries. For a child born in a poor suburb, this meant having access to an excellent education, being able to receive training at the best universities without having to spend the rest of their life in debt, provided they pass their admission exam. The idea was that a person born at the very bottom could rise to the top, which was so much more frequent in the years leading up to the 1980s. For example, a middle-class worker could buy a house without becoming overwhelmed by debt or no one would go bankrupt for not being able to pay their medical expenses. When these problems disappear, the resentment toward the upper classes diminishes significantly.

In terms of social equality, Europe is much better off than the United States and most other regions in the world. Its model is very successful in terms of pre-distribution: investments in education, universal healthcare, and regulation of the job market to guarantee high minimum wages.

The issue of inequality in Europe has much more to do with access to housing, high taxation of consumption and labor, and strongly regulated job markets that result in high unemployment rates, especially among young people, which prevents economic growth.

Inequality and the rejection of the governing technocratic class, which is perceived as lacking empathy, corporate in nature, and alien to the problems of the common people, are the basis for the unrest that led millions to support Brexit in England or vote for Donald Trump in the United States. It is a reflection of the part of the population punished by globalization, automation, and a state that was unable to respond to those transformations.

Inequality has always been associated with periods of social instability. The French Revolution, the Gilded Age in the United States, the Russian Revolution, the post-WWI era that led to fascism, and the 1990s in Latin America that ended in populist governments were all periods of great inequality. People need to express their frustration, which makes them susceptible to falling into the hands of populist politicians. There are two types of populism: on one hand, left-wing populism which blames the rich and seeks to charge them higher taxes to rampantly increase public spending. This is the favorite solution of politicians like Bernie Sanders in the United States, the Podemos political party in Spain, or Kirchnerism and Chavism in Latin America. On the other hand, right-wing populism blames immigrants, the media, the opposition, and foreign nations. This group is represented by the likes of Donald Trump and Jair Bolsonaro.

If we follow the current trend of inequality, populist movements will grow massively within the next years alongside two phenomena. One is the pandemic that destroyed millions of jobs around the world, which will take years to recover from. On the other, the intensification of technological change will accelerate the expansion of the technologies of the Third Industrial Revolution, and in 10 or 20 years we will see the beginning of the Fourth Industrial Revolution. These two revolutions demand increasing numbers of IT specialists, engineers, scientists, researchers, mathematicians, and programmers, which will widen the wage gap between the world of science and technology and all other jobs. In the medium and long term, these advances will be extremely positive for the economy and society but in the short term, we will have to learn to live with its consequences.

I do not believe in radical solutions for dealing with inequality. I do not believe that a larger state or more taxes are the answer to recovering the ideal middle-class. These programs sound alright in speeches but they do not solve the underlying problem: the need for well paid, private-sector jobs, and reducing the cost of the meritocracy basket. The worst thing governments could do to face inequality is to introduce high income taxes, more public spending, and more regulation. This could lead to economic collapse and was one of the reasons why the cycle of prosperity that began after World War II came to an end. During the 1960s and 1970s, many countries established high-income tax rates, in some cases reaching 70%. This seriously affected investment, the innovation of economies, risk-taking, and the creation of new companies. This in turn contributed to the spike in inflation during the late 1970s. Ronald Reagan and Margaret Thatcher understood this problem very well and knew that with such high taxes, there would be no investment. They tackled the problem by strongly reducing taxes. In doing so, they reactivated the economy, investment grew and, alongside a tightening monetary policy, inflation was kept in check. The problem was that although the prices of the consumer goods we buy at the mall and the supermarket went down, the prices of real estate, university educations, and healthcare began to grow considerably, all of which make up the meritocracy basket and are essential for the middle class.