Inequality, the UK Government, and Barack Obama

Inequality and Poverty

He has taken major decisions on the credit crunch but the real test for Gordon Brown is the action he takes on inequality. As we all know, there is a wide income gap between rich and poor in the UK, with (depending on the definition used) some 5 million people living in poverty.

Since Labour took office in1997 there has been some progress in taking people out of poverty but the UK remains a most unequal society. To take one example from statistics, the wealth of the top 1% of the population increased (as a proportion of total national wealth) from 17% in 1991 to 24% in 2002. .

More recent evidence indicates that there has been no significant change in the movement towards equality.

A World Perspective

If we take a world perspective, as we must, the challenge is, obviously, much greater.

Hundreds of millions of people do not have enough to eat, with millions dying of starvation and associated diseases.

Although globalisation of economies is inescapable, its effect to date has been to make rich nations (and rich individuals) richer; largely at the expense of the poor – especially the poor in developing countries.

Unless the rich West takes the lead in reducing exploitation, and creating greater equality, we shall all suffer from increasing political, economic and social instability. There has already been indications of this in the recent anti-government protests in Greece.

Tackling world poverty and inequality is a much more effective means of dealing with terrorism than going to war. Removing grievances and injustices helps to undermine support for terrorist activities. The most encouraging recent development is that his comments indicate that the new USA President, Barack Obmana, is likely to adopt this approach.

The consequences of the war in Iraq are an obvious example of the damage caused by greed. It is now generally recognised that the driving motive was to “steal” the oil. The outcome is hundreds of thousands dead and greater instability throughout the region.

Aid to developing countries is a pittance when compared to expenditure on this and related wars (e g in Afghanistan). The USA and the UK should take the lead in raising the level of aid to, at least, the level of expenditure on recent wars.

A New Strategy

The urgent need to create greater equality, in Western nations and throughout the world, should be regarded as the relevant background to policies aiming to end the recession. The fact that the current economic downturn is global means that policies must be developed in the context of global considerations.

In the world context, hundreds of £ Billions are required. However, if the USA and its allies are prepared to spend such sums fighting wars, it is a political, not a financial, decision to direct the resources towards relieving poverty.

There was no chance of persuading George Bush to adopt such a policy but the position is very different with the new President. There is a real hope that, supported by Gordon Brown and other European leaders, Obama will take the lead in developing policies which end the recession throughout the world, not just in rich countries.