Monday 23 October 2017

Tom Molloy: Unequal wealth is a threat to our democracies

Former Greek Prime Minister George Papandreou
Former Greek Prime Minister George Papandreou

Tom Molloy

The ISEQ is soaring, outperforming indices all over the world. House prices in south Dublin are jumping at the top end of the market with property website daft.ie alone offering 110 houses in the capital for more than €1m.

Car sales are down but the proportion of luxury cars with a 131 number plate is rising. Range Rovers and other Donnybrook tractors are making a return. The auction rooms are drawing crowds again and the art scene is showing signs of life after a long hibernation.

Optimists say that the rising wealth among the country's rich is a sign that the economy is on the mend. Let's hope that they are right, but there is a less benign interpretation which we need to consider.

That analysis suggests the economy is performing rather like the economy of the US, and the economies of many other countries, where the various bailouts have benefited the rich but left the middle and working classes worse off.

We don't like to talk about class in Ireland, pretending like the Americans, that everybody belongs to one big class clustered around the middle. That's a comforting thought in a small society, but it is far from accurate.

It probably also explains why we have no accurate figures on wealth distribution here, which makes it hard to get a real handle on what is happening in society and who has benefited and lost out following our own expensive bailout.

Elsewhere, the debate is a little more honest. At the TED Global gathering in Edinburgh last week, business leaders and former politicians were blunt about the shortcomings of the recent bailouts which have done so much to help the wealthy and so little to help everybody else.

Former Greek prime minister George Papandreou (below) criticised "plutocrats hiding their assets in tax havens" and "powerful lobbies protecting the powerful few".

These thoughts led him to worry aloud about the state of our democracy. "It's no wonder many political leaders, and I don't exclude myself, have lost the trust of our people," Mr Papandreou said during his talk. "When riot police have to protect parliaments, a scene that is increasingly common around the world, there is something wrong with our democracies."

Those remarks and speeches by other participants including author and reporter Gillian Tett who wrote tellingly about the conference led an economist to tweet that the "intellectual ascendancy of neo-liberalism since the 70s may be in retreat."

That's a theme that seems to be recurring at the moment. In Davos earlier this year, it seemed to me that many of the world's plutocrats are also worrying about the distribution of wealth these days and what it means for democracy and economic stability.

The winners in the global economy fear that they could go the way of the Russian aristocracy in the early 20th century unless more is done to help the rest.

We are a long way from this here in Ireland, despite our deep problems. But it is a worry.

Irish Independent

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