Why haven't we found a way to fix global wealth inequality yet?

Why haven't we found a way to fix global wealth inequality yet?

Ahead of Facebook's initial public offering in March 2012, Mark Zuckerberg wrote a letter to prospective investors explaining the purpose of the company. The mission isn't to "build services to make money; we make money to build better services." By raising $16 billion for Facebook (and $19 billion for Zuckerberg himself), he said the company could further its egalitarian crusade to decentralize information, speech, and political power.

"We believe building tools to help people share can bring a more honest and transparent dialogue around government that could lead to more direct empowerment of people, more accountability for officials, and better solutions to some of the biggest problems of our time," he wrote.

Five years later, wealth inequality has not improved, undemocratic governments are exercising greater power globally, and Facebook has delivered on very little of its social promise. Rather than fostering a well-informed citizenry, Facebook has incentivized the rapid dispersal of gossip, hyperbole, facile partisan memes, and outright fabrications. Rather than opening up the public discourse to new ideas and "better solutions," Facebook has imprisoned us in filter bubbles.

Meanwhile, Zuckerberg himself has become richer and richer. The anti-poverty organization Oxfam recently reported that Zuckerberg and the seven other wealthiest men (according to Forbes) have a net worth equal to that of the poorest half of everyone else on earth. Oxfam blames a variety of factors, from forced labor to tax dodging to money in politics. And it offers a variety of solutions centered around promoting a "human economy" that creates more opportunity and political representation for all people.

At heart, the transformation from a market economy to a human economy is a change of mindset. "Together we need to create a new common sense, and turn things on their head to design an economy whose primary purpose is to benefit the 99 percent, not the 1 percent," wrote Deborah Hardoon, head of Oxfam Great Britain's research team and author of the report.

Martin Luther King Jr., whose birthday we celebrated recently, was saying a similar thing almost 50 years ago. "We as a nation must undergo a radical revolution of values. We must rapidly begin … the shift from a thing-oriented society to a person-oriented society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, extreme materialism, and militarism are incapable of being conquered."

Since then, American and Western values have only shifted further away from this ideal. Right-wing politicians, particularly since the '80s, promoted market solutions and praised the virtues of the wealthy. And yet, Oxfam argues, billionaires would find it difficult to justify their vast wealth. It cites a 2013 paper from the Institute for the Study of Labor, in which researchers found wealth inequality either has no effect on economic growth or, when the wealth is acquired through political connections, actually reduces growth. The paper mentions Carlos Slim, the Mexican billionaire (number four on the Forbes list), whose telecoms company has benefitted from government favoritism. Slim's wealth not only doesn't trickle down, it actually makes Mexicans poorer by gouging them for phone service.

The World Bank definitively stated the failure of trickle-down economics in October 2015, when income inequality was becoming a major issue for voters in the U.S. presidential primary race. "A focus on GDP growth is simplistic," World Bank Group President Jim Yong Kim said in a statement to governments. "We reject 'trickle-down' approaches that assume any undifferentiated growth permeates and fortifies the soil and everything starts to bloom even for the poor. We need to find an economic growth model that's inclusive, that lifts up the poorest citizens rather than maintains those at the top."

Whenever the super-rich gather in Davos, Switzerland, for the World Economic Forum and Oxfam admonishes the world for the wealth gap, there's a spike of indignation and then a swift return to the status quo. Americans never see major tax reform or legislation to reduce the influence of money in politics or more funding for poverty-reducing measures, like programs for poor children, even though most people say they support such measures. In fact, some developed countries have made their tax systems less progressive in recent decades. Many factors could explain the inertia, including political gridlock (caused by gerrymandering and polarization), lobbying, and the disproportionate voter turnout of high earners. But there's something more powerful preventing us from addressing wealth inequality.

"There is no widespread sense that high incomes are illegitimate per se," wrote American political scientists Adam Bonica, Nolan McCarty, Keith T. Poole, and Howard Rosenthal in a 2013 paper, "Why hasn't democracy slowed rising inequality?" "Executive compensation went essentially unscathed in the Dodd–Frank financial regulation legislation passed in 2010. Entrepreneurial wealth derived from providing valued goods and services is admired, even revered."

This reverence could explain the relative tolerance among even far-left groups of certain wealthy individuals, such as Zuckerberg and others on the top-eight list like Bill Gates (Microsoft), Warren Buffet (Berkshire Hathaway), and Jeff Bezos (Amazon). It's not just that they support philanthropic causes, a strong press, and tax reform even when it would harm them personally. It's that they're perceived as self-made men. "We had Occupy Wall Street, but no Occupy Silicon Valley or Occupy Walmart," wrote Bonica and his colleagues.

Even as Silicon Valley preaches technology as a great equalizer, the facts prove otherwise. The San Francisco metro area is now the richest in America, but the International Monetary Fund says those gains aren't making their way down to the lower class, where unskilled workers are being left behind. Companies like Uber and TaskRabbit are changing the definition of employment, offering freedom and flexibility to workers but also eroding labor protections and social security. "In many countries, key slices of the social safety net are tied to full-time employment with a company or the government," writes Arun Sundararajan of the New York University School of Business.

It should seem obvious by now that when workers are feeling precarious, they become disaffected, and disaffected people vote in troubling ways. Many of those same people in the U.S. could soon lose their health coverage. That's where Facebook steps in, right? To promote direct empowerment of people and accountability of officials.

The new social paradigm Zuckerberg created with his online network helps us connect with old friends and share valuable life moments, but it just as often encourages us to be snoopy and superficial. Facebook gives us a tool to organize and exposes us to vast amounts of information, but it also polarizes us, misleads us, and frustrates us when likes and shares fail to move Congress.

And Facebook does this because it is not a social enterprise, much as Zuckerberg would like us to believe. It's a business, and all it wants is for you to keep scrolling.

Keep scrolling down your news feed. That's another dollar in Zuckerberg's pocket. Keep liking those partisan memes. That's another dollar in Zuckerberg's pocket. The longer you scroll, the more ads you'll see and the more information Facebook will collect.

You can like this column all you want, but it sure as hell won't lift your neighbor out of poverty.

Ben Wolford

About Ben Wolford

Ben Wolford is a journalist based in the Middle East. He is the editor of Artificial Intelligence and a quarterly magazine called Latterly.

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