Citizenship - "Plutarch's Problem"

On the surface, Chile appears to be one of the great economic success stories. It has all the trappings of modern capitalism and numerous suitors knocking at its door at any one time to cement economic ties. Canada is an old friend, having signed a free trade agreement with Chile in 1996 – its first with any Latin American country. In fact, Chile presently has 47 trade agreements with other countries and is negotiating more. Surrounded by other countries struggling for stability, Chile is held up as a modern example of what sound economic policies can accomplish.In these troubling days of global economic turbulence, Chile and Canada both stand out as having defied the trend of financial decline. Liberalizing fiscal policies in the 1990s established economic bulwarks that stand both countries in good stead in difficult times.But there are other dimensions to Chile’s growth that reveals the soft underbelly of modern capitalistic success that have an eerie resemblance to Canada. No one ever seems to want to talk about it but Chile has some intractable problems that came with that success and which were never solved. The gap between Chile’s rich and poor is wider than it has ever been and continues to widen. The country’s top 20% earns 67% of the country’s income, while the bottom 20% earns just 3%. In more ways than it cares to admit, Chile resembles many other countries in the developing world where a small group of elite families and individuals dominate its economic landscape, and each of these families control the key enterprises – everything from natural resources, to media, the airlines and banking. In each of the country’s financial sectors a few companies dominate the rest, applying downward pressure on small and medium-sized ventures in an effort to maintain a monopoly.One might ask why a country that has evidenced so much economic growth continues to accept a growing inequality? It’s a good question because we are continuing to tolerate a similar trend in Canada, where the gap between rich and poor is widening and social equity is quickly becoming a dream of the past. To an important degree, Canada bought into the prevalent economic view that our future prosperity depends on loosening restraints on the free market, keeping taxes low for those companies that create jobs, and opening the Canadian economy up to globalization because that’s where the future’s headed anyway. We’ve been accepting that economic paradigm for some 25 years; how’s it going for us?As a kind of financial elitism continues to mount impressive force in places like Canada and Chile, its members use their political capital to fight for changes that directly benefit them. In both countries, the economic advantage has increasingly moved to the wealthiest, leaving the middle class in limbo and the poorest 20% in decline. There has been growth, impressive indeed, and we would be foolish to deny it. But the greatest benefits have gone to the upper income bracket. Markets don’t have a conscience; they exist to benefit the undertaking of business. They often seek the kind of efficiency that the corporate community touts but which after 25 years appear to have left the country increasingly fractured.We’ll look more at Chile and the comparisons in the next post, but its experience of remarkable economic growth that increasingly leaves casualties behind should be a cause of concern and study for all citizens. While democracy presently holds out economic growth as its mantra, it was never designed to be so lop-sided. Democracy is a political system that is meant to lift all boats, not just the selected ones who have the wealth and political power to protect their holdings.To date, Canadian citizens have appeared to accept this status quo, but as more and more families and individuals continue to decline in economic stability there is a growing sense that things aren’t right, aren’t equitable. That sentiment is sure to grow in the coming years as the massive corporate enterprises continue to squeeze out the smaller and medium-sized businesses that stand a far better chance at job creation, innovation, and community presence. As citizens we have pursued the compilation of goods to such a degree that we have a nation full of things while at the same time losing our grip on equality, sustainability, while we tolerate a growing uncertainty as to the future of job creation. Only a very few people are comfortable with this unpleasant reality, so why is it that it continues to be the prevailing view?The issue is not whether capitalism is good for us or not – it has blessed us far more than could be imagined a century ago. But it was meant to be balanced with good “public” policy, the kind that looks out for the benefit of all Canadians. It’s been 25 years now and the system of “trickle down” prosperity is now found wanting. It was just the kind of condition the old philosopher Plutarch spoke about when he concluded: “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” We’ve been at it long enough now to see where this ship is heading and if, in turn, it’s leaving more disparity in its wake, only citizens can change the course as long as the political parties continue to accept the status quo.