Wealth tax to correct ‘Restern’ imbalance
WHY is the gap between rich and poor widening so fast, globally? The World Economic Forum leaders meeting in Davos, Switzerland, last week had no structural or historical sense. Growing income inequality, environmental damage and ever higher financial-market risks have significantly impaired our ability to transform technological progress and wealth formation into a long-term sustainable developmental model.
We cannot hope to remedy the brokenness of our modern economic system without understanding the economic, social and political drivers that continue to dictate the narrative of institutionalised poverty and globalised inequality.
From 1500 until 1800, all the maritime empire-building countries were Western European nations engaged in empire building in the Americas, in Africa, in Asia, and in eastern Europe and Russia. The persistence of this phenomenon is the single most important factor in the Westernisation of the world.
Genocide characterised much of the Western expansion. As a consequence of European maritime empire-building, the indigenous populations in the present-day US, Canada, Australia and New Zealand have been almost exterminated.
People of European descent populated these four former European colonies, while the culture, civilisation and religion of western Europe were transplanted. All four were decolonised under conditions that encouraged their economic growth and the development of capitalist economic systems. During the second half of the 20th century, the US not only perpetuated the empire-building of the western European countries. It continues to do so in a way that is conspicuously draining the countries in the Restern world.
Not all countries in the non-European world (i.e. the Restern world) became official colonies of Western countries, but all of them were directly or indirectly exploited and disrupted by Western maritime empire-building.
The Rest of the world – Latin America, Africa, Asia and eastern Europe, including Russia – includes countries that are underdeveloped. Some have incomplete capitalist systems and many are not yet industrialised. The population of the Restern world (or the non-European world, excluding Japan) after 1500 was more than 76% of the world population, and is now 86% of the total.
The huge inequalities in the distribution of power, property, income and levels of industrialisation and education between the West and the Rest are among the greatest challenges that face our world. The inequalities emerged slowly over the period between 1500 and 1820, but increased dramatically in the 130 years from 1820 until 1950.
While the West’s share of World GDP (WGDP) increased from 18% in 1500 to 57% in 1950, the Rest’s share declined from 78% in 1500 to 40% in 1950. From 1950 until 2003 the West’s share declined to 43%, while the Rest’s share increased to 50.5%. (Japan’s share declined from 3.2% in 1500 to 3% in 1950 and then increased to 6.6% in 2003.)
Over the past 30 years the per capita income of Asia as a percentage of the per capita income of the West became somewhat greater than the 16.2% that it had been in 2003. T he central question is: to what extent can we attribute (at least until the middle of the 20th century) the lack of development – or the “development of underdevelopment” – and the lack of industrialisation in the Restern world to Western empire-building, Western capitalism, Western industrialisation, Western industrial militarism and Western ideological propaganda?
The underdevelopment of the black/ brown (mainly) non-European and (mainly) non-Christian people should not be judged – not by Western people – without taking into account the severity of the exploitation, repression and destruction by Western empires, Western capitalism, industrialism, war-making and propaganda. We are not denying the contribution the Western world has made to the scientific, cultural and economic progress of the world, and that the Restern world has also benefited.
However, the Western world’s spectacular progress would not have been possible without the exploitation, repression and destruction of the Restern world. We must never forget the important question of the West’s historic guilt with respect to the Restern world. A wealth tax is necessary to correct the apartheid legacy. Matters are not helped by the intervention of the Brics (Brazil, Russia, India, China and South Africa) and other Restern countries in Africa to get hold of Africa’s natural resources for their industrialisation.
It is time to correct this imbalance, not by going to Davos and doing as the New York credit ratings agencies and Brics governments say, but by developing a counter-force based on sound moral principles. Redistribution of that looted wealth is one place to begin.
●Sampie Terreblanche is a political economist and author of ‘Western Empires’, published by Penguin Books in 2014.