Social Equality and the Idol of Growth

by Marcel Koníček

I come from the Czech Republic, a country with one of the most equal distributions of wealth in the world. However, even the Czech Republic has recently felt the change in the policies of employment in many parts of the economy that are supposed to raise the competitiveness of the economy on the global markets but which also rob the employees of much of their job security. This change became very tangible after the crash of the US banks in 2008, which started the tsunami of economic crisis that sent all European economies into disarray. Suddenly, the broad group of debt-ridden people whose employment depended on the short-term needs of their employers, beingsuddenly shifted from permanent employment into agency work and short term contracts, living from payday to payday, appeared and it has not disappeared ever since.

This is not a local phenomenon. The changes in the Czech Republic coincide with the systematic worldwide shift that Standing describes in his book The Precariat. In the book he is describing the social group of the same name (which is an allusion to the proletariat), a very broad group of people that are living in constant uncertainty. The growth of this social group is mainly caused by the globalisation of the world economy and the effort of the corporations to cut their costs and keep them competitive with the newly rising economies in Asia (Standing 2011:40-50).

It is possible to assume that being part of the precariat is not something that most people would like to experience. Losing your job security is certainly not a good thing. Still, it is not only the companies that are making this change happen. More and more, it is the policy makers of the countries who contribute to the raising social inequality and job insecurity. They argument with neo-liberal ideas of equality being stifling for the economic growth and job security being a barricade for creating new jobs. They speak about economic growth and statistic measures such as GDP as if it was some kind of pagan idol, a cure-all for all the ailments of the human race. That the only thing that is important in the end is the bottom line.

However, things such as job security and social equality have many merits that are hard to evaluate by simple economic statistics. If somebody does not have to be afraid about the future of his job, he is probably less likely to try abuse the social system. If he lives in a more equal society, it is less likely for him to search for easy-sounding but radical political solutions. In this context, the neo-liberal laissez-faire policies look more like a trade-off that might be or might not be worth it. However, this is only true if their initial assertions are true. Is economic equality really slowing down the economic growth?

According to Lane Kenworthy this might not be so. In his study he is comparing economic equality and growth in many developed countries. He finds that:

“Affluent countries with egalitarian institutions and policies have so far been fairly successful at maintaining relatively high levels of income equality. And that success does not appear to have come at the expense of income growth for the middle class or the poor. There may be a trade-off between earnings equality and job growth, but its magnitude appears to bemodest.” (Kenworthy 2011:32)

If that is so, should the politicians be trying to reverse this shift towards inequality and job insecurity? I believe so. Sadly, it seems that both politicians and businessmen perceive growth and spending cuts as some kind of idol that has to be worshiped despite the consequences. This is in my eyes not a healthy sustainable attitude.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s