Friday 23 February 2018

Social inequality's a fashionable topic, but the views differ widely

It's unusual to see the rich at Davos debate working-class misfortune but the annual business mixer is a good forum for it

ONE of the paradoxes of Irish life is that almost no country has suffered more from the crisis but almost no country appears less interested in the consequences for social inequality.

Social inequality hardly made an appearance in last year's general elections, but it is a different story in 2012.

In the United States, where voters rarely worry too much about this sort of thing, social inequality and the ever-increasing wealth of the top 1pc look like dominating this year's presidential elections.

The millionaire candidates from both parties will weep tears about the poor, feel their pain and look for their votes.

On this side of the Atlantic, in the wealthy Swiss ski resort of Davos, a similar story is unfolding as billionaires and millionaires got together to bemoan the increasing gulf between the middle classes and the rich.

The businessmen and woman, the academics and politicians have all been gingerly picking their way through the deep Davos snow to enter the conference centre and argue the toss about how much social inequality is acceptable.

But it's the Occupy Wall Street protesters, having set up their makeshift igloos on site, that grabbed most of the attention yesterday.

Outside, despite high security, activists sent up huge red weather balloons carrying a big protest banner over the CEOs' and world leaders' meeting.

The banner read: "Hey WEF, Where are the other 6.9999 billion leaders?"

The 'Occupy' movement and other protests have drawn global attention to anger over inequality, stubbornly high unemployment in many areas, and increasing poverty.

It's all the more amusing, then, to see so many rich folk worrying about the coping middle classes and the struggling working classes who must cope with the collapse in blue collar jobs, but the subject is important and Davos is a good forum for a discussion despite appearances to the contrary.

"There is definitely a more sombre mood at the event this year," Dublin's Archbishop Diarmuid Martin said yesterday.

The Archbishop has been attending the conference for 12 years and has seen a lot of changes in attitudes.

"All of us have to learn to live in a different way, but austerity is not the only way. How do we develop social progress? How do we develop jobs?" he asked.

"There is a lot of talk about growth and equity, but we need to define what equity is."

He urged the Government to focus the austerity cutbacks more carefully so that those who can ill afford them don't get cut even more.

"The key to Ireland's success in the past was investment in our young people and now we are cutting back on this again.

"There needs to be a consensus on how we get back to balancing the books, but then we must look again about how we restart and rebuild the country," he said.

Commenting on an increase in those attending Mass, he said he wasn't one of those people who like the theory that bit of recession was "good for the soul".

"From my experience, those who are hit are the ones who are on the margins before and those who have lived very well in the past will continue to live reasonable well," he argued.

There is, of course, every sign that it could become even more difficult for the vast majority of westerners who have grown up expecting support from a fully funded social welfare system.

One could almost see the storm clouds darkening yesterday, with some commentators fearing we are returning to the red-blooded capitalism of the Victorian era now that the threat of communism has receded.

Others believe (and welcome) what they see as a profound and long overdue demographic shift that has begun, which will shift wealth and influence from the developed world to the developing world.

The point was perfectly captured by the founder of the World Economic Forum, Klaus Schwab, who bluntly announced that "capitalism is out of whack".

The German professor welcomed critics' ideas of how to fix it -- even from those camped out in protest igloos.

Mr Schwab also urged that more attention be paid by leaders and governments alike to jobs -- saying Davos participants should focus on "talentism" instead of capitalism.

Mr Schwab also said leaders should concentrate on winning back public trust.

David Rubenstein, co-founder of the Carlyle Group, said western nations had three or four years to fix their "severe problems" and reduce debt, or else Chinese-style "state capitalism" would prevail.

"The game will be over for the type of capitalism many of us lived through," he said.

State-capitalist countries "have the most efficient model right now", he added.

"We have to solve our debt problems, our deficit problems. We have three or four years to improve our economic model. Otherwise we have lost the game," he warned.

Angela Merkel, the German chancellor, did little to lift the mood in her opening speech, which was more a trudge into the future than the glorious march she might have intended.

Wincing slightly, as if she had unexpectedly swallowed a slice of lemon, the most powerful politician in Europe sat down at the end of a long speech knowing that the debate in Davos was taking place as Greece's bondholders were holding closed-door meetings in Paris to discuss how -- and whether -- to continue talks central to Europe's debt crisis.

This, of course, is not the first time the global economy has faced serious headwinds. Back in 2006 and 2007, there were high levels of personal debt, bubbles in housing and financial markets, and a seriously unbalanced global economy.

On that occasion, the warning signs were ignored. The question at Davos this year is whether lessons have been learned.

Indo Business

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