Create economic systems that serve the many, not the few

World economies have experienced economic growth, the billionaires club has grown, and significant numbers of people have been lifted out of poverty across the world, but these are barely surviving. How economic benefits from the globalising world are spread remains a major global concern with visibly widening inequality. There is growing public resentment of unjustified concentration of wealth in the few politically connected corporate businesses. The idea of trickle-down economy that for years has been successfully sold to the public is now coming under increasing scrutiny with evidence clearly illustrating that wealth does not automatically trickle down, and it never has.

Questions need to be asked of governments failing to meet their bargain of the social contract: Are governments breaking the social contract with their citizens when they employ systems that enable the brazen hoarding of wealth by the elite leaving the poor struggling for basic needs?

Despite traditional capitalist models of development arguments that extending substantial tax breaks for the large corporations will lead to economic growth and that the resulting economic benefits (wealth and opportunities) will trickle down to the public, evidence persistently shows growth of wealth for the rich and worsening levels of poverty for the average person and even widening inequality in society.

Lived experience is that trickle-down economics has not worked for the average person in the past, and it is highly likely that it will not work for the future citizen. Governments statisticians obsess with GDP but not the real experience of the average person.

The obsession with the GDP, GNP, and the facile belief that the GDP growth would trickle down to the poor invariably ignores the genuine concerns of the poor who cannot access economic opportunities or meet their daily basic needs because of low, stagnant wages and the rising cost of living.

“Fool me once, shame on you; fool me twice, shame on me”. The public can no longer be convinced by the GDP growth and trickle-down economics gambit. The reality is that wealth is used to entrench inequality, not to trickle down and solve it. What is happening every day is more of the trickling up of wealth where the wealthy enjoy humongous tax-breaks, where banks and politically connected businesses receive bailouts from states for poor business decisions while the poor face eviction from rented properties for failing to pay rent due to poor wages; the everyday person sees through this injustice.

Inclusive growth is not only morally right, but also fundamental to global stability; any system that – whether by design or oversight – excludes masses from economic benefits and access to opportunity while extending and concentrating these to the politically connected business enterprises increases chances of a public revolt with each passing day of injustice.

Economic designs must be reviewed so benefits from economic growth are distributed fairly across society. It is morally wrong that wealth, income and opportunities are concentrated in the few political elites while the poor must hope (and pray) for a trickle down of benefits as though they were an afterthought in the capitalist economic model.

For the benefits of economic growth to trickle down, it will take more than the once in million chance of the bottomless economic pockets of the very wealthy allowing an escape of a few pennies; it will take moral clarity and the political will to make sure that there is a benefit for those with less who are far removed from the palace.

Changes in how benefits of economic activities are accessed and distributed across society is essential. Adopting social democracy would be fundamental to ensure a thriving but regulated capitalist economy, progressive taxation so economic benefits do not just serve the wealthy but serve the whole society through progressive taxation and a comprehensive welfare state is sustained.

Ensuring economic benefits reach all parts of society must be a major focus for governments and economic policymakers, including the localisation of economic initiatives. Unregulated capitalism has failed the public; when it comes to addressing inequality, it has failed dismally. Wealth does not automatically trickle down in a world where the instinct seems to be to encourage greed and hoarding material wealth is the definition of success. In the absence of political interventions, economic benefits will not trickle down. Moral clarity is required to adopt social democracy principles to ensure that benefits of economic growth reach everyone.