paradox of affluence
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Paradox of Affluence or (the Logic of Unbridled Capitalism?)
By Jeff Shalan
Affluence: accommodation of wealth in society
How can we live in a country with so much wealth and so much poverty?
Paradox: something that seems self-contradictory or doesn’t make sense, if you approach this using
logic it does make sense, it’s true
Of 4.4 billion people in developing countries, 3/5 lack basic sanitation, 1/3 have no safe drinking
water, 1/5 are undernourished, 1/5 have no access to modern health services
$40 Billion: cost to achieve and maintain universal access to basic education, healthcare, food, water
sanitation; more than $36 Billion are wasted on cosmetics, dog food, and ice cream
$40 Billion: 4% of combined 225 richest people; $1 trillion is their combined wealth
$1 Trillion: annual income of poorest of 47% of Earth’s population or 2.5 billion people
GDP of 48 least developed countries= assets of the world’s three richest people
1 children born in London, Paris, NY will consume, waste, pollute more in a lifetime than 50 children
in a developing country
1960: Gap between world’s richest and poorest 20% was 30 to 1
1991: It was 61 to 1; 1994: it was 74 to 1
Top 1/10 of 1% US income earners (300,000) earn=bottom 50% (150 million)
Top 1% owns more wealth than bottom 90%
2006 Bush Tax Cuts: Bottom 20% of income earners received $23, middle 20% received $448, and
top 10% received $202,523
Between 1979 and 2005, income of top 5% increased from 11x as much to 22x as much as bottom
20%, whose real income declined by 1%
1970s: CEOs earned 30-40x more than average worker; in 1990, they earned 100x more; in 2005,
they earned 00x more
U.S. Personal Savings Rate declined from 11.2% in 1982 to -1.1% in 2006
Neoliberalism in a Nutshell
Deregulation: removal of state control, oversight, intervention in the belief that markets are self-
regulating and function most effectively when left alone by government and its regulatory agencies
Privatization: transfer of ownership and management of public enterprises to private companies in
the belief that private business and industry can move effectively produce and deliver goods and
services
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Free Trade: removal of barriers to trade (taxes, tariffs, subsidiaries, and controls on foreign
investment in the belief that the free form of goods, services, and capital across national borders is
the best means of economic growth)
Logical Effects of an Ideology
Decline of unions, stagnant wages, shifting tax burden, corporate-led globalization, downsizing, loss
of good-paying secure union jobs with benefits in manufacturing replaced by low-wage jobs in
service sector often without benefits, all contributing to upward redistribution and concentration of
wealth
WTO policies and free trade agreements have empowered the expense of workers, peasants,
indigenous peoples, environment and a rising tide may lift all boats but many are pushed overboard
Deregulation banking and credit industries makes it easier to borrow at a time when borrowing
become increasingly necessary to stay afloat, leading to the increasing debt for ordinary people
Commodity: something bought and sold in the marketplace
Everything is for sale, which discourages critical slide and undermines society