Paradox of Affluence or (the Logic of Unbridled Capitalism?)

By Jeff Shalan

Affluence: accommodation of wealth in society

How can we live in a country with so much wealth and so much poverty?

Paradox: something that seems self-contradictory or doesn’t make sense, if you approach this using

logic it does make sense, it’s true

Of 4.4 billion people in developing countries, 3/5 lack basic sanitation, 1/3 have no safe drinking

water, 1/5 are undernourished, 1/5 have no access to modern health services

$40 Billion: cost to achieve and maintain universal access to basic education, healthcare, food, water

sanitation; more than $36 Billion are wasted on cosmetics, dog food, and ice cream

$40 Billion: 4% of combined 225 richest people; $1 trillion is their combined wealth

$1 Trillion: annual income of poorest of 47% of Earth’s population or 2.5 billion people

GDP of 48 least developed countries= assets of the world’s three richest people

1 children born in London, Paris, NY will consume, waste, pollute more in a lifetime than 50 children

in a developing country

1960: Gap between world’s richest and poorest 20% was 30 to 1

1991: It was 61 to 1; 1994: it was 74 to 1

Top 1/10 of 1% US income earners (300,000) earn=bottom 50% (150 million)

Top 1% owns more wealth than bottom 90%

2006 Bush Tax Cuts: Bottom 20% of income earners received $23, middle 20% received $448, and

top 10% received $202,523

Between 1979 and 2005, income of top 5% increased from 11x as much to 22x as much as bottom

20%, whose real income declined by 1%

1970s: CEOs earned 30-40x more than average worker; in 1990, they earned 100x more; in 2005,

they earned 00x more

U.S. Personal Savings Rate declined from 11.2% in 1982 to -1.1% in 2006

Neoliberalism in a Nutshell

Deregulation: removal of state control, oversight, intervention in the belief that markets are self-

regulating and function most effectively when left alone by government and its regulatory agencies

Privatization: transfer of ownership and management of public enterprises to private companies in

the belief that private business and industry can move effectively produce and deliver goods and

services

Free Trade: removal of barriers to trade (taxes, tariffs, subsidiaries, and controls on foreign

investment in the belief that the free form of goods, services, and capital across national borders is

the best means of economic growth)

Logical Effects of an Ideology

Decline of unions, stagnant wages, shifting tax burden, corporate-led globalization, downsizing, loss

of good-paying secure union jobs with benefits in manufacturing replaced by low-wage jobs in

service sector often without benefits, all contributing to upward redistribution and concentration of

wealth

WTO policies and free trade agreements have empowered the expense of workers, peasants,

indigenous peoples, environment and a rising tide may lift all boats but many are pushed overboard

Deregulation banking and credit industries makes it easier to borrow at a time when borrowing

become increasingly necessary to stay afloat, leading to the increasing debt for ordinary people

Commodity: something bought and sold in the marketplace

Everything is for sale, which discourages critical slide and undermines society