The newly-released Oxfam report has asked governments to impose a one-off 99.9 per cent tax on the 10 richest men in the world, which would still leave those men with more wealth than 99 per cent of the rest of the world. Oxfam Ireland has estimated that a 1.5 per cent wealth tax on Irish billionaires could raise more than €700 million in revenue and a tax on Irish millionaires owning more than €4 million could raise €4 billion.
Tax and the redistribution of income are necessary to reduce inequality, but they are not enough. The political tensions and escalating threats to democracy in the United States demonstrate why any policies aiming to confront inequality must also build solidarity.
In the US, both the left and the right use inequality and injustice to justify their political stances and policy initiatives. They lambast billionaires for their extraordinary wealth and for the influence they have over politics and policy. They also both contend that dismantling this influence will allow for more just policies to be implemented and for those who have been oppressed and neglected to gain greater dignity and social recognition.
Successive Irish governments have corrected inequality with income transfers without parallel investment in universal public services or indigenous industry
The similarities end there but the fact that increasingly hostile political opponents utilise the same argument reflects the importance of not just increasing income but also overcoming social divisions and elevating social respect, especially for those who have felt neglected by politicians for so long.
Irish policymakers may regard the deterioration of democracy and political life in the US as peculiar to the country’s two-party political system, geographic divisions and diversity. However, politicians here should still pay attention to the political fallout from inequality and the need to think beyond redistribution, which has formed the basis of welfare policy.
Successive Irish governments have corrected inequality with income transfers without parallel investment in universal public services or indigenous industry. The result is the perpetuation of a segregated economy, with certain sectors heavily reliant on low-wage workers, inequalities in health and education that limit life chances, and a rising cost of living that overshadows any government assistance, such as rebates on energy bills.
In the US, right-wing leaders such as Rachel Bovard and Nathanael Blake have manipulated the issue of inequality to justify cultural conservatism and, increasingly, one-party dominance. They call political elites, including the civil service, ‘incompetent’ and ‘malicious’, as evidenced in the existential anxiety Americans feel about the future and the lack of social cohesion. Bovard labels American ‘woke’ political elites “a totalitarian cult of billionaires and bureaucrats” and contends: “Federal social policy is written almost exclusively by rich, white, progressive elites who attended the right schools, watch the right Netflix comedy specials and park their hybrid cars next to their Black Lives Matter yard signs.”
As wrong-headed, noxious and even dangerous their rhetoric often is, these right-wing thinkers make a point about the need for policymakers to show greater understanding of the damaging political consequences of economic insecurity and social division and, likewise, the role of an effective state in generating greater public trust.
Research in Ireland conducted at NUIG by Prof Cathal O’Donoghue showed a jump in public trust in government between 2019 and 2020. The increase was attributed to state intervention to ameliorate the effects of the Covid pandemic. The State moved decisively to protect incomes, renters and mortgage holders, and co-ordination between the State and business. The rise in public trust arguably made imposing necessary restrictions to contain the virus easier for the Government.
Any realistic effort to reduce inequality and risk of poverty would also require progress with Sláintecare, especially universal access to primary care
This finding has implications for addressing inequality as the pandemic subsides or at least becomes more manageable. The recent Social Justice Ireland report on the effect of housing costs on poverty shows that income redistribution must be accompanied by ambitious investment in social housing. Any realistic effort to reduce inequality and risk of poverty would also require progress with Sláintecare, especially universal access to primary care but also investment in public hospitals and staffing.
However, even these measures to increase economic security and improve standard of living, as important as they are, should be accompanied by efforts to build solidarity. As the NUIG report put it, government intervention to protect purchasing power “was a demonstration of ‘we are all in it together’”.
Greater organising power for unions and more investment in civil society and co-operatives would logically be expected to generate greater solidarity. Government support for organisations and institutions that expand social networks, give individuals greater self-confidence and provide critical information about subjects ranging from banking to healthier diets should have a positive social impact.
A recent article in the New York Times by Vanessa Veselka about an effort to organise care-home workers spoke of how labour union members can feel empowered enough to leave abusive relationships, return to education or take better care of their health.
Reducing income inequality is critical here and around the world. However, greater relative income does not necessarily mean more social respect, individual sense of belonging or trust in the state.
These come from policies that bring people together and, before this, government recognition that all these issues are urgent priorities now and in the long term.
Shana Cohen is director of Tasc, the think tank for social change