The decline of the middle class
In this era of globalisation, social inequality is increasing.
by Roberto Savio
It is now generally accepted that the North-South divide created at
the end of the colonial era and the coalition of New Countries against
the powerful North of the world ended with the arrival of globalisation.
There are now areas of the Third World inside the North, and areas of
the North inside the South.
The world is no longer bipolar, with the two big powers creating the
other divide, the East-West divide. We now inhabit a multilateral world,
where a plethora of acronyms (such as BRICS, G20 and TPP) show how it is
now fragmented into multiple layers.
Yet, while the East-West divide has basically disappeared, the
North-South divide is culturally and politically alive, while trade and
especially finance are powerful forces for integration.
At a cultural level, the people of the North continue to maintain a
strong geocentric view of the world, and the statistics on cultural
exchanges show that only a small quantity of cultural products flows
from the South to the North; the dominant flow is always between the
United States and Europe.
Movements
In political terms, the two halves of the North interact much more
with each other than with the South.
The growth of China and Asia, as the powerhouses of the 21st century,
is not reflected at all in the fields of culture and politics.
While people feel a bond and a communal sense among themselves,
campaigns against immigrants continue to grow and as the North becomes
less important in the new multipolar world, the stronger is the reaction
to take refuge in populist, xenophobic and nationalist parties which
dream of a return to the old days. This is why we have new political
movements like the Tea Party in the US and similar parties in Europe
which will play an important role in the forthcoming European elections.
In political and cultural exchange, there is little doubt that the hub
of the North remains the US. Its citizens are not very interested in
Europe, which is considered a different world, intent on protecting
welfare and with a touch of socialism (Rush Limbaugh of Fox News has
denounced Pope Francis as instilling pure Marxism). But, on the
contrary, Europe is looking towards the US, which is widely still
considered the leader of the world.
The US exerts on Europe what in sociology is called a demonstration
effect, which happens when there is a process of admiration and
identification with a winning model. Therefore, in this era of
neoliberal globalisation, what happens in the US still has many chances
of reverberating in Europe.
No example can be more definitive than the financial sector. European
banks are increasingly behaving like US banks, and Wall Street is the
point of reference for behaviour and style.
Demonstration
According to the European Banking Association, nearly 2,000 European
bankers earned more than 1 million euro in 2013 (1,186 in the United
Kingdom alone), and this is creating another demonstration effect, which
is also being emulated in the industrial sector: a growing divide
between what bosses make in relation to their employees.
This tendency shows absolutely no sign of slowing down and we can be
sure that it will continue.
Recently, at the end of January, JP Morgan announced that for the
closing of the 2013 financial year, it had increased the compensation of
its President, Jamie Dimon, by a startling 74 percent to a total of 20
million dollars.
This, for a year in which the bank had to pay 20 billion dollars in
fines and narrowly escaped a plea of criminal guilt.
The New York Times (NYT) then conducted interviews in the world of
finance, to find how this was seen.
In its summing up, the NYT reports: In the world of executive
compensation, especially when viewed from the rarefied perspective of
other chief executives, and more broadly on Wall Street, Dimon's pay and
how it was determined is not only defensible, but laudable. Ten days
later, Francisco Gonzalez, President of the Banco de Bilbao y Vizcaya (BBVA),
modestly echoed Dimon, announcing that for 2013 he will earn seven
million dollars.
In Europe, youth unemployment is high. A survey in Italy found that
the majority of single over-35s are still living with their parents. And
other data show that stores for the lower middle class are in crisis,
while stores for the rich are booming.
So, social inequality is on the rise, and we have all the statistics
showing how nearly all the growth in recent years has gone to the top
one percent of the population. The middle classes, the result of a
century-long fight for social justice and redistribution from growth,
are fast disappearing.
According to a study by the London School of Economics, in 16 years
we will have returned to the level of social inequality in the days of
Queen Victoria (1837-1901). All this, against a background of general
indifference among the political classes, engaged in a self-referential
fight on day-to-day issues. The capacity to deliver anything which goes
beyond the day-to-day dimension seems, unfortunately, absent in the
North.
In 2000, heads of state throughout the world committed themselves to
a number of social goals, the so-called Millennium Development Goals.
Those goals remain elusive.
- Third World Network Features
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