The upsurge of economic and social inequalities, following the crisis of the capitalist system in the 1970s, is largely due to the domination of neo-liberal ideology, initially in Great Britain, and later almost throughout the Western world.
A key feature in the re-issue of the ideas of economic liberalism of the 18th century was the emphasis on the pursuit of individual economic freedom and the primacy of free markets, with no corresponding concern for individual and collective political rights and individual freedoms.
In this context, the unprecedented concentration of wealth and power in the hands of an oligarchy was a political choice – it is neither a natural phenomenon nor a deterministic development of History. And, much more, inequalities are “contrary to human nature” and not the other way around, as Mr. Mitsotakis affirmed in his speech at the Thessaloniki International Fair of 2017.
What really runs counter to human nature is the erosion of democracy, to which this over-concentration leads. Because, withdrawing itself from the economic realm, the political system transfers not only economic but also political power to the private capital, which then, institutionally unhindered, invests its profits in the field of communication technologies and the mass media.
It is now well established, though, that the provocative over-concentration of incomes, wealth and power threatens social stability and democracy, acting as a springboard for far-right populism.
Nevertheless, the democracy problem caused by the extreme inequality of income and wealth lies not only within societies – it is also a global issue, which concerns power relations on an international scale. It is caused by the states’ loss of sovereignty, induced by uncontrolled multinational “giants” who avoid tax through tax haven countries, whose tolerance is also a political choice. The problem is also attributable to the great speed at which funds move around the world.
Homeless tents can be seen on the streets of Paris. In Europe, 5% of the wealthiest citizens own almost 40% of private wealth.
The report of the Independent Commission for Sustainable Equality in Europe 2019-2024, established on the initiative of the Group of the Progressive Alliance of Socialists and Democrats of the European Parliament, ascertains that, if we view the European Union as a single country and not as just the average of its member states, income inequalities in it are greater than in the US.
Greece, unfortunately systematically – that is, before and after the financial crisis – is ranked by the German Bertelsmann Foundation as a straggler in the European Union in terms of ensuring social justice. The SYRIZA government, while taking over the Greek economy in the most difficult fiscal period, has worked to alleviate inequalities by prioritizing reforms and policies to combat extreme poverty and inequality. The establishment of Social Solidarity Income, the reform of subsidy policies with priority given to the fight against child poverty, the housing subsidies for thousands of needy households, and even the annual distribution of social dividend – all these initiatives had the same objective.
The over-concentration of wealth and power is a political choice of neo-liberal governments; thus, a political choice and priority for democratic and progressive governments should be to halt and mitigate the consequences of neo-liberalism.
There is no doubt that the distribution of income and wealth is largely a political issue, so the fight against social inequalities outlines today the basic dividing line between political forces.
The progressive forces, at national, European and global level, ought to seek interventions in defense of democracy and in the fight against inequality and the consequent uneven accumulation of wealth.
Such as, for example, the introduction of uniform tax measures and rules for multinational corporations and speculative short-term capital movements, and the facilitation of economic policies aimed to reinforce the social state and reduce inequalities. Or the imposition of a mild version of the European Tobin tax on short-term financial transactions, so as to “throw sand on the wheels of speculation”, as Tobin himself would say. Or the taxation of digital and multinational giants where they ensure their highest profits, as well as the introduction of a common corporate tax base, in order to prevent tax competition and the ability of multinational corporations to transfer gains and profits from the country where they obtain them to another, to take advantage of the lower tax rates.
At a national level, since its first months in office, the Mitsotakis’ government has been rapidly moving, as we expected, in the opposite of the requisite direction. In terms of tax policy, it is rushing to capitalize on the fiscal space that the SYRIZA government has secured, “giving little to many and a lot to few”. Both by modifying the ENFIA relief so that it will eventually cover large assets, as well as by corporate taxation, where the reduction will be felt only for those with high profits. At the same time, it is handing gifts and immunity to financial criminals. It is unfreezing their frozen accounts and it changes the Competition Commission in an underhanded manner, in order to control it “suffocatingly”.
The set of the dividing line between the Left and the Right, in the crucial question of how the accumulation of wealth in the hands of fewer and fewer people should be confronted, was attempted by SYRIZA’s proposal to revise Article 21 of the Constitution, introducing the state guarantee of a decent standard of living for all citizens, the social right to health and the public control of basic social goods, such as water and electricity.
This proposal was voted down by the current ruling party in the previous Parliament and, unfortunately, the same will happen in the present one, thus it will not receive the 180 votes required for its introduction in the Constitution of our country.
*Alexis Tsipras is the President of SYRIZA, Leader of the Loyal Opposition