By Guy Standing – Fostering globalization in the context of the ongoing technological revolution has been favorable for economic growth globally. But governments and international bodies have signally failed to counter adverse distributional outcomes within countries.
Similarly, in advocating labor market flexibility, negligible attention has been given to the widespread economic insecurities this has generated.
Meanwhile, the neo-liberal phase of globalization has evolved into ‘rentier capitalism’, in which more and more income is going to those possessing physical, financial, or so called intellectual property. Rental income has been boosted by increased firm concentration in many economic sectors – epitomized by the rise of ‘superstar firms’ = and by government action, most notably the strengthening of intellectual property rights protection and the growth of the subsidy state, as governments have chosen to compete by throwing subsidies at large corporations and rich individuals. In so doing, they have regressively depleted public budgets.
One term to describe this conventional fiscal policy is pluto-populism, hereby tax cuts and subsidies are concentrated on so-called entrepreneurs and ‘wealth creators’ while state benefits and public services are cut for low-income groups, ostensibly to reduce the budget deficits that result from the fiscal generosity to the rentiers.
Consequently, in most countries, the share of income going to capital has risen sharply and the share going to labor has plunged. Within the share going to capital, the share going to rentiers has risen; within the share going to labor, the share going to higher earners has risen.
If we wish to escape from the regressive economic paradigm, we must nurture a narrative and vocabulary that focuses on emerging socio-economic groups. In that regard, a global class structure has been taking shape, in which the new mass class is the ‘precariat’. more>