The communists certainly went too far when demanding that everybody should be treated absolutely equally, regardless of innate or acquired ability. Yet, the pendulum has swung too far in the opposite direction when the average CEO remuneration in the United States is more than 300 times that of the average salary of employees. Great inequality is bad for proper governance, the rule of law, and long-term economic growth. Great inequality tears apart the fabric of society, and is ultimately in nobody’s interest, not even in that of the most privileged. Having been blessed by a long period of relatively broad based wealth in the West, we are now seeing the devil’s hoof of inequality in the increased elite influence on the political process, challenges to the rule of law, and increasingly demotivated and frustrated middle and working classes.
All this is well-known and half-hearted attempts are made to remedy the situation. Half-hearted perhaps because the heart of elites is not truly in it! Occupy Wall Street was on to something, but was mistaken in believing the problem lies in Wall Street, when it lies with the legislature, and ultimately with us, the electorate. The anti-globalisation movement believes that the enemy is globalisation, when it really is our lack of global solidarity and lack of global mobilisation of the middle and working classes. Workers of the World Unite! is as relevant a slogan now as in the nineteenth century but has been overtaken by national parochialism.
A main problem in addressing inequality is perhaps that we have been addressing it only in political terms rather than in rights terms! We are saying that it is bad that we have inequality, that it is destructive to have inequality, but we tend not to say that we have a human right to live in a society of reasonable equality!
As soon as we accept the existence of a human right to live in a society of reasonable equality, we elevate the debate to a different plane. We start to concentrate on the ‘how’, rather than the ‘why’. A human right to a society of reasonable equality is not an easy or unambiguous thing, of course, but few human rights are. Yet, some things flow easily from such a human right. The right of employee representation on corporate boards, for instance. Germany has shown how exactly this curbs the excesses of management compensation, how it helps build a fairer society. Speculative and short-term profits must be taxed much more, shareholder influence strengthened, minimum wages raised significantly, high quality education made available to all, youth employment fostered through salary subsidies and a prohibition of unpaid internships. This is not socialism by any measure, but life support for a capitalist system run amok.
We should have little problem accepting that Mark Zuckerberg and Bill Gates are allowed to be phenomenally rich, because they have created immense value for society. But we should have a problem with the 10 leading hedge fund earners each making more than 400 million dollars in 2014. To avoid excesses like that we must invoke our human right to a society of reasonable equality. It is a right – not a political bargaining chip!