by Guillermo Sullings
translation by Pressenza London
We are resigned, like mere spectators, to a brutal and inhuman process of concentration.
This resignation is often
based on the certainty that there are enormous powers capable of
resisting any attempt at change, and also on the fact that
populations are sometimes contradictory and individualistic, and
their behavior is functional to a consumerist capitalism that
inevitably leads to such concentration.
But we doubt when we see that it is often taken over by economic power, and its policies exacerbate the problem.
Because that power has the capacity to manage the media that influence the electorate, has the resources to buy wills in the three branches of the State, and has the strength to pressure, blackmail and discipline.
Of course, this perverse mechanics tends to have fissures, because sooner or later it generates suffering in the populations, and political crises offer opportunities for change.
But it is not a
sufficient condition, because in the immediate and immediate history
there are examples in which, even counting on state power, the
search for alternative models failed, perhaps because not all the
factors that gravitate in the concentration of wealth were
understood and the consequences were addressed more than the causes.
They forget that Piketty himself in "The Economy of Inequalities" also affirms that the improvement in the standard of living of the populations was fundamentally due to progress and not so much for having achieved some more point in the percentage of the distribution of the cake.
But this is a half-truth, because for accumulation to turn into investment and progress, there must be a potential demand that encourages such investment, and such a demand would not exist if the populations did not increase their incomes, and much of the bid for the distribution of the cake has to do with that.
There must be an unstable equilibrium for the dynamics of development to work.
Up to a certain scale capital accumulation can favor investment and multiplication (and we say "can" because business decisions do not always coincide with that romantic vision of liberal capitalism according to which the surplus is always saved and the savings are always invested).
But from a larger scale this accumulation begins to function as a black hole, an enormous gravitational force that begins to absorb companies in order to dominate markets and form prices.
It begins to impose brands by outsourcing and delocalizing production, disciplining small and medium enterprises that become a sort of "emproletariat" forced to compete with each other while minimizing profits and salaries (as Naomi Klein explains in "No logo").
This dominant position
achieved by concentrated capital allows them to increase their
profitability to the detriment of productive companies and workers,
and in that instance capitalism stops "multiplying the fish," and
begins to give birth to a monstrous giant fish that swallows the
And so the wheel continues to spin and concentration continues to increase.
That wheel is increasingly far from the reach of any brake that is attempted, thanks to,
The distributive bid
between workers and employers is limited to an ever smaller portion
of the cake, because big profits are beyond the reach of labor
demands, and that union weakness is another factor that feeds the
Of course, through adequate labor policies, the income of workers could be improved a little, but the margin of maneuver in many companies is less and less because of what has been explained above, and that also puts a wage ceiling on the rest.
So labor policies could generate relief, but would not move too much the ammeter of income distribution. It is necessary to intervene strongly from the fiscal policy to balance the burdens.
In this sense, one of the limitations that the State encounters from the economic concentration is the increasing difficulty to have a progressive tax system, not only because those who concentrate wealth have better tools to evade, but also because when the concentration increases the rates should be higher and higher for the concentrated sectors.
In other words, in a kind of demonstration by reduction to the absurd, if in a country the Gini coefficient were equal to 1, the State should charge a single person a tax rate of 99.99% to finance itself, which would be illegal because of the confiscation, and unfeasible in practice because that person would own the country.
Without going to that extreme, we can understand that the more unequal a society is, the greater the tax pressure it would be necessary to exert on a few taxpayers to finance public policies in an equitable manner.
But as this is often
difficult for legal and political reasons, the tax pressure ends up
falling on a larger base of taxpayers with less contributory
capacity, and the system becomes highly regressive which can
stimulate the growth of informality.
The solution of the "modernizing liberals" is to increase the retirement age, which in addition to postponing the deserved retirement of workers, postpones the entry of young people into the labor market.
One solution would be for the benefits of technological advances to accrue to workers, either by reducing the working day while maintaining the level of income, or by allocating a basic income.
Others will say that it is not bad for employers to keep the higher profitability resulting from technological advances because they will invest it in new projects that will generate work, but in practice this does not happen in sufficient measure to compensate for what has been lost.
In order to alleviate
these consequences, the State seeks to increase its spending on
social services, in a context in which, as we explained earlier, the
tax pressure becomes unsustainable due to the regressive nature of
The tax on profits or income, both for individuals and companies, should include progressive rates up to very high levels, but not only in proportion to the magnitude of the profit, but also in proportion to the number of workers employed, so that this rate is inversely proportional to the number of jobs that were generated to obtain this profit.
Differential rates should also be contemplated depending on whether this gain is reinvested in the country where it was generated, or escapes abroad, or is channeled into financial speculation.
This would have a simultaneous impact on the labor market, lowering unemployment and consequently strengthening salaried workers in the distributive bidding, and would increase the collection for the pension system.
Progressive rates, which would heavily tax high yields that are not reinvested, would balance the overall tax burden, making the tax system less regressive, and consequently tend to reduce evasion and informality at lower profitability levels (provided that this is accompanied by effective controls).
The evasive vocation
would surely concentrate on the highest profitability levels, but
which will be better identified to exercise over them an intense
monitoring and control that minimizes capital flight and evasion.
Of course we will have to coexist with some limitations imposed by globalization, but it is possible from national policies to take important steps to reverse at least in part this concentration of income and wealth that marginalizes more and more people.
In some countries it will
be possible to advance faster than in others, and the staggering of
rates will be able to be adapted to the rhythm of what is possible,
but what must not be doubted is that it will not be the
market itself that improves the distribution of income and wealth,
if the states do not force a substantial change in the distributive