1FW2e8F

SECTION 1 2 3
EXTREME INEQUALITY
Ideologically, dominant elites in almost every sphere are much more likely
to support the market fundamentalist worldview than ordinary people.
Economists, in particular, are much more likely to strongly hold this view, and
this brand of economics has dominated public thought over the last 30 years.
Market fundamentalism, by leading to the concentration of wealth by elites,
is also in their self-interest. Elites, therefore, use their considerable power
and influence to capture public debate and politics to continue to push for
this market fundamentalist approach, as the next section shows.
CAPTURE OF POWER AND POLITICS BY ELITES
HAS FUELLED INEQUALITY
The second major driver of rapidly rising economic inequality is the excessive
influence over politics, policy, institutions and the public debate, which elites
are able to employ to ensure outcomes that reflect their narrow interests rather
than the interests of society at large. This has all too often led to governments
failing their citizens, whether over financial regulation in the USA or tax rates
in Pakistan.
Elites are those at the top of social, economic or political hierarchies – based
on wealth, political influence, gender, ethnicity, caste, geography, class, and
other social identities. They may be the richest members of society, but they
can also be individuals or groups with political influence, or corporate actors.
Economic elites often use their wealth and power to influence government
policies, political decisions and public debate in ways that lead to an even
greater concentration of wealth. Money buys political clout, which the richest
and most powerful use to further entrench their influence and advantages.
Other non-economic elites, such as politicians or senior civil servants,
use access to power and influence to enrich themselves and protect their
interests. In many countries it is not uncommon for politicians to leave
government having amassed great personal wealth. Political elites sometimes
use the state to enrich themselves in order to keep in power and make huge
fortunes while they govern. They use the national budget as if it was their own
to make individual profit. Non-economic elites also often collude with other
elites to the enrichment of both.
For instance, today’s lopsided tax policies, lax regulatory regimes and
unrepresentative institutions in countries around the world are a result of
this elite capture of politics. 277 Elites in rich and poor countries alike use their
heightened political influence to benefit from government decisions, including
tax exemptions, sweetheart contracts, land concessions and subsidies, while
pressuring administrations to block policies that may strengthen the hand of
workers or smallholder food producers, or that increase taxation to make it
more progressive. In many countries, access to justice is often for sale, legally
or illegally, with access to the best lawyers or the ability to cover court costs
only available to a privileged few.
In Pakistan, the average net worth of a parliamentarian is $900,000, yet
few of them pay taxes. Instead, elites in parliament exploit their positions
to strengthen tax loopholes. 278 The dearth of tax revenue limits government
59