We are all aware that there is inequality both within our country and all over the world. What a lot of us are not aware of is the fact that this inequality is getting worse year after year. The rich are getting richer, and the poor are getting poorer, meaning that more people are living in poverty and conditions that no-one should have to experience. Every year we have fundraising campaigns to donate funds to those in need, and while this helps, it is short term and makes no dent in the actual numbers of people living in severe poverty. It used to be that as a nation we would mainly fundraise for developing countries. For those people who we thought of as living in poverty and for a problem that we considered to be on the other side of the world. Poverty in these areas is still as devastating, but what we find now is that there has been a massive increase in the level of poverty in developed countries, countries that have more than enough resources to provide for each and every on of their citizens. Oxfam reports that the UK has the 6th largest economy and yet 1 in 5 people loves below the poverty line. That is 13 million people in an affluent country who do not have enough to live on. Even more concerning, 3.5 million of these are children who are yet to have the opportunity to live their lives. What is most frustrating about this situation is that there is enough money in the world for everyone to have a decent standard of living, both in developed and developing countries. Poverty is not a necessary evil of our world and it can be eradicated. We are in a position to make changes and there is no excuse for sitting back and allowing such inequalities to continue.
The Earth provides enough for every man’s needs, but not enough for every man’s greed
Gandhi summed the problem that leads to extreme wealth and extreme poverty in this one sentence. The super rich enjoy being super rich and do what they can to stay that way. Tax avoidance, tax evasion, tax havens. These are all terms that we have become accustomed to hearing and reading. The super rich can hide their money in offshore accounts to ensure that they don’t have to pay tax on it. The knock on effect is that there simply isn’t enough money left for everybody to live above the poverty line.
Inequality is the biggest problem and with such extremes of wealth and poverty, it is difficult to see how to end poverty around the world. However, the answer is glaringly simple – the distribution of wealth needs to occur. The resources in the world are finite, and so money cannot just be produced to give to the poor, the money that already exists needs to be shared more evenly.
It is calculated that £30 trillion is contained in tax havens, and that is just for super wealthy individuals, not including corporations. Oxfam reported that the net income of the top 100 billionaires (approximately $240 billion) would be enough to eradicate extreme poverty four times over, meaning that to eliminate poverty just once £60 billion is needed. The extremely wealthy are not expected to give their money easily away (although it would be embraced if they did) but if they stopped finding tax havens there would be an extra £30 trillion to be distributed. This suggests poverty could be eradicated 500 times over!
Benefits of reducing poverty
There are distinct advantages for the people experiencing hardship if overall poverty is reduced. However, the benefits to society, in general, should not be overlooked. In the past when inequality has been high it has been shown that the crime rates increase, economic growth slows, and there is an atmosphere of civil unrest. In addressing the inequality that is currently experienced societies all around the world will benefit, which in turn benefits everyone. Therefore, the super rich also benefit from an equal system, although it can be argued that they do not need these types of benefits.
Redistribution of wealth – is it possible?
There is a valid argument that forming an equal and fair system where every person has access to enough that they don’t live in poverty is unrealistic. Friedrich von Hayek argued that whenever a group of individuals becomes responsible for the distribution of resources, they will never have enough information to allocate reliably. Bureaucratic methods do not lead to inequality and so even if all the taxed that should have been paid were paid, this does not necessarily result in a fairer world.
The redistribution of wealth does appear to be a utopian ideal. The citizen’s dividend is a proposed policy based on the idea that the world is the property of all people and should, therefore, be shared equally. Under this idea, people receive regular payments from leasing or taxing land and natural resources. With everyone being equal this ensures that everyone receives enough to live above the poverty line.
Milton Friedman’s notion of the negative income tax has the potential to distribute resources in an equal way and is possibly more likely to succeed than the citizen’s dividend. In simple terms, the people who do not earn above a certain wage do not contribute income tax. Instead, they are allocated funds to ensure that they are on an equal footing with others. This produces a more even distribution and should allow for people living in poverty to escape. It means that everyone gets their share and does not depend on jumping through hoops as the current welfare system in the majority of countries demands.
It may seem like an unrealistic notion that extreme poverty could disappear, and this holds people back from trying. Complacency allows people to carry on with their lives and not attempt to make such a radical difference. However, history has shown us that the world is capable of progression in very fundamental ways. It may not always move as quickly as we would like but the world has progressed from slavery to a black American President. That would have been seen as a nonsensical idea, but it is real. The equal rights movement still has work to do but the progress that has been made is incredible. Women receiving the right the vote, same-sex marriage, the role of women in religion are just a few aspects that would have been thought of as impossible in the past. The fact that they exist should be enough to make us realise that ending poverty when there are more than enough resources in the world, is achievable.
The poor don’t need heroes
The distribution of wealth and finding a method that works are not the only considerations when attempting to do away with poverty. There is a misconception that people in poverty are to be saved. Those countries, organisations or governments need to be the heroes and rescue others from living in poverty. In reality, what people in poverty need are their fair share of the world’s resources. Living in poverty doesn’t make anyone a second class citizen, or imply that they are incapable of looking after themselves. The idea that people need to be told how to help themselves is degrading and wildly untrue. In tackling homelessness, the general approach is to try and get people off the streets and into hostels. This isn’t an unhelpful idea but it is very much a ‘one size fits all’ notion which isn’t always the most effective. When charity, Broadway, asked homeless people what they wanted and gave it to them the results were much more successful. 11 out of the 13 homeless people no longer lived on the streets and the average cost of what they asked for was just £794. The millions of pounds that are poured into homelessness schemes could be put to better used simply by asking what they need and not assuming that we know better.
Poverty is a topic that focuses on finances but this really is the tip of the iceberg. The impact of financial poverty creeps into every aspect of life and leads to other forms of poverty such as emotional or existential. Whilst financial poverty is not a prerequisite for other forms of poverty, the link is undeniable. Living without close links to others, happiness, a sense of self worth or experiencing constant ill health are all parts of life can lead to a poverty more devastating than a lack of finances. By addressing financial poverty, we can indirectly affect these issues as well.
The majority of discussion on tax avoidance comes down to whether it is illegal and whether it is morally wrong. However, these discussions are relatively redundant because most schemes are legal and morals are very much a subjective issue. The focus should be on what could be achieved if no tax havens existed. The eradication of extreme poverty is a much more important topic and is achievable. The world has enough for every person to live above the poverty line and it is the time that people stopped believing that there is nothing that can be done. Ending poverty and allowing people a decent standard of living is not an unrealistic idea and, as the past has shown us, radical changes are possible if we try hard enough. We need to view people in poverty as equals and stop feeling superior with a need to save them and the ‘tax havens’ need to stop being viewed as a way of avoiding paying taxes and should be considered as the piggy bank that will solve poverty.
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