«The debate on inequality is a highly charged one»

SDG; CDE; Sabin Bieri; Agenda 2030
Sabin Bieri is conducting research at the Centre for Development and Environment (CDE), University of Bern, on issues of global inequality.
Political article
The 2030 Agenda is a world constitution of sorts: it conceives of the world as a political, social and societal whole. Hence, existing challenges can only be met through joint action by rich and poor countries. Interview with researcher Sabin Bieri.

Alliance Sud: To what extent do current social inequalities hamper sustainable social and environmental development in the world?

Sabin Bieri: The analysis of inequality takes global power relations into consideration, whereas poverty alleviation is also possible without tackling that issue. By power relations I mean the very real political heavyweights. The growing inequality is worrisome, as it is both a cause and a consequence of the fact that political relations are dictated by those sitting at the upper end of the wealth ladder. If there is to be progress with the 2030 Agenda, it will require the participation of all stakeholders. We will not succeed in implementing the 2030 Agenda under the present political circumstances.

How does this political and economic inequality manifest itself in the leading multilateral institutions?

That is a tough question. In my view, inequality is most effectively tackled at the domestic level. It is also a problem for the implementation of the 2030 Agenda in that while it is a worldwide agenda, its successes are being measured on the basis of parameters from nation-states, and responsibility rests mainly on national governments. A closer look at domestic inequalities shows that wealth has largely moved into private hands. And this is so both in so-called Third World countries and in industrialized countries. States have less and less money, which also curtails their capacity for action. This contradicts the concept of the 2030 Agenda, whereby States and their governments are held accountable first and foremost. The multilateral institutions such as the World Bank, the World Trade Organization (WTO) or the International Monetary Fund (IMF) have played an active policy role in this development over recent decades. Meanwhile, both the World Bank and IMF pay lip service to the fight against social inequality. But when we observe what the World Bank, for example, is doing in practice, it must be said that it has not progressed beyond rhetoric.

Specifically, what is the World Bank doing wrong?

It does indeed assert that it is now focusing on the bottom 40 per cent of the world's population and on poverty alleviation. To that end, it has switched its statistics from relative to absolute poverty. What is still missing, however, is the systemic view, which would mean looking at the entire global distribution of wealth. It is not enough to try to lift the poorest 20 or 40 per cent of the world's population out of poverty. Instead, the question should be asked as to how wealth can be more fairly distributed worldwide. This raises uncomfortable issues such as what concentration of wealth is reasonable for us here in the North.

Yet in speaking of the wealth of the North, we must also be aware that the relative equality of wealth distribution in post-war Europe, that is to say between 1950 and the 1970s, constitutes a historically and geographically exceptional phase. Inequalities were much more glaring before that phase, and have since continued to be so, in Europe and around the world.

What is the role of the global taxation system in redistributing capital from the State to private hands?

With taxes the case is clear, in that recent history shows a distinct trend away from progressive taxation systems, under which large private fortunes and corporate profits were assessed more heavily, towards much weaker redistribution models. This trend has drastically reduced the room for manoeuvre of States. That too is creating more inequality. In the inequality debate, a distinction is drawn between pre-distribution and re-distribution. It is not hard to see that the tax issue belongs to the latter category. It is undoubtedly one of the most powerful policy tools for creating greater equality in societies. Conversely, it is highly vulnerable in that all redistribution measures are constantly at risk of being revoked by political decisions. In my view, "pre-distributional measures" are stronger. They aim to ensure that from the very beginning, created wealth is distributed as fairly as possible such that material inequalities do not arise in the first place.

What specifically do you have in mind here?

Minimum wages or caps on high salaries, for example. Broad-based access to high-quality education and political encouragement of employee representation are also part of the picture. Such measures are clearly more enduring than fiscal measures, for example. A case in point is the US city of Seattle, which does not tax corporate income, but only property. Because Seattle has a massive problem of homelessness and no public funds available for dealing with it, a corporate tax is to be introduced. Partly responsible for the increase in local homelessness is the economic boom, which drove up real estate prices. Meanwhile, Amazon has its headquarters in Seattle where it employs 15,000 people, in other words, any mayor's dream. But many people were displaced from residential areas in the city centre as they could no longer afford the rents. Amazon put its foot down and threatened to move elsewhere. The law has now indeed been passed, but only because companies are being taxed at a much lower rate than originally intended. That is a present-day example of the "winner takes all" mentality that has become the norm since the 1980s. The political debate around inequality is potentially explosive. This was also clear from the process of formulating the 2030 Agenda, where Goal 10, on reducing inequality, remained hanging in the balance until the very end of the negotiations. Meanwhile, Goal 8 on economic growth, which is in part diametrically opposed to Goal 10, was never controversial.

In your research you address agricultural marketing processes in Bolivia, Laos, Rwanda and Nepal. To what extent are Bolivia's small farmers being impacted by global power relations?

It already begins with the very concept of "small farmer" – this is not just about small farmers but also very much about agricultural workers. The former are owners of land, the latter are hired farm hands. In Bolivia we focus on quinoa cultivation. Quinoa has been a trendy product for some years now, as it fits in perfectly with our altered eating habits. Until about three years ago, quinoa was fetching fantastic prices on the world market. These prices have now plummeted. It is the old story all over again. In many agricultural sectors in developing countries people concentrate on a single product for the world market, thereby becoming much more dependent on trade in a particular product and the prices it can fetch. If on the other hand agriculture is oriented towards self-sufficiency, the supply situation for the local population will be more stable. Hence, in the processes under study, those who own land are the better-off ones. The most vulnerable are farm hands who have no land of their own.

How does this relate back to the question of inequality?

In all our countries, the question of inequality revolves most definitely around land ownership. Landowners are generally in a much better negotiating position everywhere. The matter of access to land for the population and how land ownership is distributed is a decisive one. Those who own a little land do not need to hire themselves out for starvation wages and work under abysmal conditions on a coffee plantation. They can choose between self-sufficiency and paid work. On the Bolaven Plateau in Laos, where we are looking at coffee cultivation, we observe that one to one-and-a-half hectares of land is already sufficient to allow for a life in dignity. Those who have the choice do not go to factories, but grow their own coffee, which they then sell to middlemen at better or worse prices. Factory workers on the other hand become seasonal workers in the coffee industry as they can just about make ends meet from their work in the rice paddies on the lowlands. Temporary shanty towns therefore invariably spring up around factories during the harvest season. Factory workers always act under the pressure of necessity: they go to factories because they may have to pay for a burial, their children may be about to start school, or simply because they are hungry. Migration of a family member is almost the only way to effectively improve the livelihood situation.

The 2030 Agenda seems to reflect the spirit of the social market economy. Based on your research in the countries concerned, would you say that this model is workable in the foreseeable future?

The social market economy model is highly dependent on preconditions. Above all, it needs functioning institutions, which in many countries are either non-existent or extremely fragile. My honest answer is therefore that it is becoming difficult. The social market economy phase that brought relatively good wealth distribution is already over, even in the North. Yet in development cooperation work we continue to suggest that it is the current model and the one to strive for. What we need are new labour models. And in this regard, there is a critical dearth of reflection in both the North and the South. What forms of work do we hope to develop with digitalization and dwindling job security? We are talking here about very different individual economic risks: when someone sets up a company in our country, there are strong systemic pillars, insurance, private law, etc., which ensure that that person is not risking their life if the venture fails. Becoming self-employed in the South, for example someone in Laos deciding to cultivate this or that coffee variety, or someone in Rwanda opting to grow one or another sweet potato variety, literally means risking life and limb. That too is a form of North-South inequality.

Commenting on these linkages, the sociologist Saskia Sassen – in reference to trends in industrialized societies – no longer speaks of inequality, but of displacement. For those who fall through the cracks of the system, there are no other structures available to rescue or support them.

It is therefore the exact opposite of one of the slogans of the 2030 Agenda: "Leave no one behind"…

Exactly. In an environmental context, Naomi Klein talks about sacrifice zones. Regions – whether geographical, environmental or even social sectors – which are sacrificed to all-consuming financial capitalism.

What should we do?

Work is highly valuable and one of the key mechanisms through which to ensure greater equality. In his book "Give a man a fish", anthropologist James Ferguson makes the case for no longer thinking in terms of traditional categories of the labour market, which regulates employment relations, as this either no longer exists or has never existed in the classical sense in many places. Again, it is about basic income models. No longer should income from work be taxed, but the fiscal system should instead focus on capital, data and energy. In the case of the capital tax, multilateral institutions again come into play, despite our now 45-year history of failed policy endeavours to introduce a financial transaction tax such as the Tobin tax. If we truly wish to combat inequality, then we cannot avoid raising crucial systemic questions. But this of course calls for the appropriate political will.

Interview by Dominik Gross an Sara Frey.