The end of the inequality debate?

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Inequality has become a central political issue in New Zealand and around the world. But there’s always been some argument, from the right, that inequality just happens, or provides an incentive for people to pull themselves up with their own bootstraps.

Now, a new OECD report is fairly straightforward about the issue:

New OECD research shows that when income inequality rises, economic growth falls. One reason is that poorer members of society are less able to invest in their education. Tackling inequality can make our societies fairer and our economies stronger.

New Zealand gets a specific mention:

Figure 2 shows by how much the GDP growth rate would have increased or decreased over the period 1990-2010 had inequality not changed between 1985 and 2005 (The most recent inequality trends since then are not taken into account as they affect future growth patterns).

Rising inequality is estimated to have knocked more than 10 percentage points off growth in Mexico and New Zealand…

As Grant Robertson put it on Morning Report, “This isn’t the Socialist International. This is the OECD – the conductor of the Trickle-Down Economics Choir – saying that the show’s over.”

So you might think that’s the end of it – surely this is an unequivocal explosion of the trickle-down economics theory, and we can all turn to finding actual solutions to reverse inequality and the real harm it causes in people’s lives.

But unfortunately, our Minister of Finance has taken the John Key line of saying he doesn’t accept the findings of the report. It’s one of the great strategies of this government, acting like there’s no such thing as objective fact and the only thing that matters is how you frame something.

We’re not going to see any kind of shift in their behaviour or policies (though I’m sure we’ll definitely hear them talk about inequality more, as we did in the lead-up to the election.) But what this report gives us is another tool to use against the National/ACT narrative – that the right are pro-growth, that tax cuts and penny-pinching will lead to prosperity, that there’s no alternative to their mean-spirited policies.

About Stephanie Rodgers (15 Articles)
Stephanie Rodgers is a campaigner, communicator, and commentator on New Zealand politics. She provides advice on messaging and communications strategy, media and social media, organisational culture and crisis management for progressive and community organisations.

8 Comments on The end of the inequality debate?

  1. Yes increasingly ‘Team Key’ just deny & reject anything that contradicts their ‘rock-star economy’ rhetoric ! They obviously know better than anyone else ? (oh really)

    BUT my real concern is that increasingly they just seem to act as if its all ‘a Bloody great BIG JOKE’ everything is the subject of Key’s latest giggling fit..
    I’m not laughing though !!


  2. It’s hard to see how economic inequality means much. There are people with a zillion times greater wealth than me, but it doesn’t make me any better or worse for it. What really matters is whether or not I can live reasonably well, not whether or not someone has more money than I do. None of us are poorer just because Bill Gates is richer.


    • Actually, there’s a large body of evidence to show that societies with greater inequality have worse outcomes overall.

      If you’re doing well, good for you – but there are many, many people who aren’t doing well, and some of the causes of that are to do with the accumulation of wealth and property by those at the top of the ladder.


  3. Good!

    Let’s say the OECD report is 100%, A++ correct that stealing (sorry, taxing) from the rich to give to the poor is good for economic growth. So what? The government *SHOULD NOT* be plundering individual citizens’ income for the bettermemt of the state’s growth rate.

    There *SHOULD BE* inequality between those who spend 10-11 hours every day away from their families working their ARSE OFF to support themselves; and those who never really have a job, spend 25 years in the same state house, and expect stuff to just come to them anyway, for free.

    We need *MORE* inequality, not less! But it’s great to see we are moving in the right direction!

    [Stephanie: This comment is clearly trolling. We do not support rightwing myths about poor people being lazy, nor that wealth is proof of hard work, on this blog. Further, there’s nothing admirable about celebrating the fact some people, through absolutely no fault of their own, are unable to make ends meet.

    You’re in auto-moderation unless you can comment constructively and with a minimum of human empathy.]


  4. Hmm, my apologies. I see your comment was to rrm22. I’m not sure why my reply was moderated out though. I thought it a reasonable post.

    [Stephanie: Your comments rely on rightwing stereotypes about “hard work” and “laziness” and wealth being “honestly gained.” They don’t address the subject matter of the post and they’re boring.

    Leaving snarky comments, including telling moderators that they “didn’t read your comment carefully” is not a good approach to take if you want to take part in the conversation here.]


  5. There’s a great post on the OECD report by Max Rashbrooke over at Public Address.
    Y’all know how to google, so imma not linking 😉


  6. You know what generates real inequality? the continual transfer of wealth from workers to the central banks through usury.


  7. This sort of issue reminds me of the story of the man, who built himself a mountain of gold. He climbed to the top & looked out & smiled at all he had achieved.. then he noticed an even bigger mountain & thought.. “I’ve got to have it !”

    Some people are NEVER satisfied (or happy) with what they’ve got…


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