The report outlines a global investment fund amounting to approximately 10 percent of global income, financed through taxes on the wealthiest 1 percent of the world’s citizens, intended for climate investments, education, and healthcare. Quantitatively projected through 2100, based on two centuries of historical data, with an outcome so improbable that you have to read it twice.
89 percent of the world’s population doubles its income, the planet warms by 1.8 degrees instead of 4, and by mid-century, people work half as much as they do now. If you also factor in free time and a habitable Earth, more than 99 percent of all people will be better off. Can a plan be more convincing?
And yet this plan has barely been discussed seriously. Criticism rarely focuses on the calculations and content, but almost always on the alleged unfeasibility of the underlying politics. Remarkable, because no new technology needs to be invented for this. In this respect, this report differs from many optimistic future scenarios that do enjoy public support. In those scenarios, innovation leaves the balance of power untouched and yet solves everything.
The necessary tax structures also already exist in rudimentary form. The international institutions required for implementation are no more institutionally complex than what was built up in just a few years after 1945. A global investment fund, an international system for mutual payments, a global wealth tax: no more exceptional than the World Bank, the United Nations, and the IMF were at the time.
Financed by billionaire capital and vested interests, even what we read in the papers and hear from politicians is shaped to keep the grapes sour.
But decades of neoliberal thinking have redefined “realistic”: markets as the starting point, growth as the goal, inequality as an inevitable byproduct. A wealth tax on billionaires? Unworkable and ineffective. A global “equity fund” of 10 percent of global income? Naive. The fact that after 1945 an enormous amount of public funds was deployed to build welfare states and international institutions does not fit into that framework. It is deemed impossible.
Their own reality
The global billionaire class, a fraction of the wealthiest 1 percent, sees its share of global wealth drop from over 6 percent to virtually zero in this study. Of course, they have every interest in continuing to sour the grapes, and they also have the means to do so.
Currently, Europe, together with North America and Oceania, has four times as much voting power at the IMF and the World Bank as their share of the population justifies, while Sub-Saharan Africa and South Asia experience exactly the opposite. Adjusting this is nothing more than modernising global decision-making power.
But this current unequal structure also produces its own reality. Through the media, think tanks, lobbying organisations, and the subtle weight of what is considered serious, it is determined time and again which ideas are deemed realistic and which end up in the category of wishful thinking. Financed by billionaire capital and vested interests, even what we read in the papers and hear from politicians is shaped to keep the grapes sour.
These adaptive preferences did not arise spontaneously. They are, in philosopher Elster’s terms, shaped by an environment that is itself structured by power. And that environment is still, right before our eyes, being carefully cultivated.
Lack of imagination
This also applies to the middle class in wealthy countries. According to the report, 45 percent of North Americans and 28 percent of Europeans will double their income. One would therefore expect them to want to discuss this plan seriously.
That lack of imagination is what determines the urgency of the report, more so than its technical workings. Every delayed reform is an extra tenth of a degree of warming. Every decade of institutional stagnation is a generation growing up convinced that progress is impossible.
And in the meantime, the concentration of wealth continues to grow, which increases the power to perpetuate that belief. That is what makes the time factor so crucial. The longer redistribution is delayed, the greater the concentration of power. It is a downward spiral, and we are right in the middle of it. A plan that is dismissed as naive today will not automatically become more credible in twenty years, unless the 90 percent who stand to benefit from it enforce it themselves.
The fox cannot reach the grapes because he is too small. Someone first told him they were out of reach.
This is a translation of an opinion piece by Hans Stegeman that was previously published in Dutch newspaper NRC.