Protective regulation for populations has been weakened or removed within national boundaries, leaving communities and individuals open to free market exploitation. To take advantage of the new conditions, international corporations, using their extensive legal and political expertise and connections, have invented their own forms of protective insulation from the impoverishing effects of internationalized 'free competition'.
Over time, however, the savings which middle-income earners had experienced with the lowering of tariff barriers, were whittled away. The wants of those whose real incomes had been improved by the import of low-wage manufactures expanded, so that, over time, the requirements of such people became greater, effectively reducing their discretionary incomes.
All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard.
(Keynes (1930) (pp.5-6), in John Maynard Keynes (1963) Essays in Persuasion, W. W. Norton & Co., New York, pp. 358-373)
...[H]ere is the slave, there the master; there the wealth of some, here the poverty of most; there the organized effort of thousands produce, to the profit of one man, what society has not yet learned to give. Here the weakness of the individual seems more feeble and helpless even than in the middle of a wilderness; here the effects, there the causes...
Squeezed between high taxes and empowered workers, executives were relatively impoverished by the standards of either earlier or later generations. In 1955 Fortune magazine published an essay, "How top executives live," which emphasized how modest their lifestyles had become compared with days of yore. The vast mansions, armies of servants, and huge yachts of the 1920s were no more; by 1955 the typical executive, Fortune claimed, lived in a smallish suburban house, relied on part-time help and skippered his own relatively small boat.
"Every suicide can be linked to Monsanto," says Ms Shiva, claiming that the biotech firm's modified Bt Cotton caused crop failure and poverty because it needed to be used with pesticide and fertilisers. The Prince of Wales has made the same accusation. Monsanto denies that its activities are to blame, saying that Indian rural poverty has many causes.
Over three-fourths of that deterioration has occurred in the developing regions, most of it in arid and semi-arid regions from such causes as overgrazing, deforestation, land clearing, unwise agricultural practices, and increased soil salinity and waterlogging, largely from irrigation.
The causes of that poverty are complex. Mr Sainath points to the long-term collapse of markets for farmers' produce. About half of all the suicides occur in the four states of India's cotton belt; the price of cotton in real terms, he says, is a twelfth of what it was 30 years ago. Vandana Shiva, a scientist-turned-campaigner, also links failures of cotton farming with the farmer suicides: she says the phenomenon was born in 1997 when the Indian government removed subsidies from cotton farming. This was also when genetically modified seed was widely introduced.
So we have the obscene situation where even resource rich nations are succumbing to elevated levels of mass unemployment and increasing poverty rates amidst the 'plenty' because the ideological currents at the moment that has spawned an obsessive neo-liberal Groupthink are intent on shifting national income distribution in favour of those at the top end at the expense of everyone else.
(Bill Mitchell, , Bill Mitchell - Billy Blog, Posted on Thursday, February 11, 2016)
Discretionary income is income which is surplus to the provision of 'necessities'. The growth in perceived 'necessities' in Western communities tends to absorb discretionary income. When individuals find that there is a regular surplus income, they tend to commit that surplus to expenditure which becomes a part of future 'need provision'. If, at a later time, a person is no longer able to fund such a commitment, that person feels a genuine sense of deprivation, of impoverishment.
Over the past decade, income inequality has come to be ranked alongside terrorism, climate change, pandemics, and economic stagnation as one of the most urgent issues on the international policy agenda. And yet, despite all the attention, few potentially effective solutions have been proposed. Identifying the best policies for reducing inequality remains a puzzle.
It can no more successfully be grafted onto other cultural communities than the Potlatch could successfully be grafted onto Western communities (see Walens S. 1981 Feasting with Cannibals: An Essay on Kwakiutl Cosmology for an excellent examination of the nature of the Kwakiutl Potlatch). Hence the catalogue of failures amassed by those most deeply involved in this enterprise. And hence, also, the disorientation and disruption of communities, and cultural and material poverty of so many people in the world affected by those intent on global modernization.
Regard the vagaries: the hours of work cannot be reduced because that would lower productivity; but if they were reduced, it wouldn't lower unemployment because the shorter hours would be just as productive as the longer hours. The hours of work don't have to be reduced because new consumer demands will create more jobs; but they cannot be reduced because there are so many unmet needs of those living in poverty. The economy will adjust automatically to reabsorb workers displaced by automation; and there is no need for government intervention because government policy will lubricate the self-adjustment process. History gives proof that future reductions are inevitable because in the past they always have occurred; but history shows that the economy has always generated sufficient jobs, implicitly without any need for reducing the hours of work....