The Limitations of Reductive Wealth Redistribution Strategies for Curtailing Inequality in the Era of Global Capitalism

Abstract

 Abstract. Poverty and inequality are in all likelihood the most pernicious problems in contemporary life. They contribute greatly to a wide and diverse range of suffering, injustice, and social ills. They have existed since the incipient forms of society emerged, and have plagued nearly every society. They have provoked criticism and resistance across millennia and geographic regions, and were inciting factors for many revolutions and social movements. There is evidence that inequality is rising globally, with economic growth and global capitalism as the primary culprits. Marx’s theory of infinite accumulation and Ricardo’s scarcity principle relate inherent structural qualities of wealth in capitalism to inequality and divergence in income and wealth. Abundant evidence shows that inequality will continue to increase unless there are political and economic measures to oppose it, and that inequality has increased since industrialization. The aims of these strategies is to promote income convergence, usually via reforms to taxes, redistribution, or minimum wage. Two of the most prominent proposals to curtail inequality are Piketty’s global tax rate and Standing’s basic income. However, neither sufficiently accounts for structural limitations in capitalism, such as those described by Marx and Ricardo, as well as Piketty’s study of greater growth rate of capital over income (r>g) and free market ideology. They fundamentally rely upon reductive redistribution and particularly money and income, which do not necessarily contribute to parity in wealth. In structural Marxism, inequality is created and perpetuated by the structural base and super-structure, and both must be somehow reformed or altered to achieve lasting and significant equality. In this paper, I approach inequality with this in mind, and propose a form of paternalism as a means of ensuring wealth redistribution achieves lasting equality..

Keywords. Inequality, Income convergence, Wealth redistribution, Global tax, Basic income, Equality, Structuralism, Paternalism, Capitalism, Structural barriers.

JEL. P19, I30, I38, D69, D63, A13, B14.