Inspirational Quotes for Education and Learning

I originally read this in a blog by Dr Maryellen Weimer and found it very inspiring and instructive. I’ve made some minor amendments to the original post in the link above and hope this inspires anyone who’s an educator or a student (which should really be each and every one of us!).

“Education breeds confidence. Confidence breeds hope. Hope breeds peace.”

– Confucius, 500 BC

Tell me and I forget. Teach me and I remember. Involve me and I learn.

Xun Kuang, Xunzi – Ruixiao: The Teachings of The Ru, Book 8, Chapter 11,250BC

“All discussion of reform must begin with the ordinary student, not the genius, not the prospective scientist or professor of abnormal psychology but the citizen of the republic who must earn a living in addition to living a humane life.”

– Paige Smith, Killing the Spirit: Higher Education in America, 1990, p. 200

“Good students are those who learn. Whatever their preconceptions, barriers or deficits—whatever their story—they take new information and new experiences, and to the best of their ability, make them tools for transforming themselves and their world. And at last I’ve learned that a good teacher is someone who can recognize and connect with good students—in all their forms.”

– Mark Cohan, “Bad Apple: The Social Production and Subsequent Reeducation of a Bad Teacher,” Change, November/December, 2009, p. 36

“Our students live in cacophony. Clamour, chatter and din fill their ears, and may even injure them. To many, a moment of silence in unendurable. I cannot ask them to put their heads down on their desk and be quiet, as Mrs. Morgan commanded me to do in Grade 2. But we can educate ourselves to be models of intellectuals who trust and value silence, who practice what we have always known; when no one is speaking, someone is learning. We can create oases of silence where cool springs of insight trickle and flow.”

– Ron Marken, in Silences, 2008, p. 115

“Most teachers resist showing students the dirty part of real learning and by the dirty part I don’t mean the hard work…. I mean the part where we fail nine times in a row before we find a good approach. I mean the parts where we are confused about our project, defensive in the face of criticism, doubtful of our abilities…. Whatever the venue … teachers like modeling their knowledge, not their ignorance, and they avoid referring to the muddy paths, fear-filled moments, and just plain failure that are the unavoidable parts of getting the knowledge we possess.”

– Marshall Gregory, “From Shakespeare on the Page to Shakespeare on the Stage,” Pedagogy, 2006, p. 324

“Skills as complex as questioning, listening and response are learned step-by-step; mastery is a climb up a ladder, not a pole vault.”

– C. Roland Christensen, Education for Judgment: The Artistry of Discussion Leadership, 1991, p. 156

“If members of another profession—say surgeons—were like college teachers, they would perform in isolation without apprenticeships, learning to cut and sew by trial and error. They would know anatomy but be ignorant of biology. They would hold colloquia discussing incision tips and suture innovations. To demonstrate the quality of their work, they would ask surviving patients to fill out bubble-sheet questionnaires with items like: ‘Does the surgeon demonstrate a commanding knowledge of his field? Is the surgeon well organized? Did she show respect for patients?’ No one would look at survival rates.”

– Larry D. Spence, “The Case Against Teaching,” Change, November/December, 2001, p. 14

“The teaching life is the life of the explorer, the creator, constructing the classroom for free exploration. It is about engagement. It takes courage. It is about ruthlessly excising what is flawed, what no longer fits, no matter how difficult it was to achieve. It is about recognizing teaching as a medium that can do some things exquisitely but cannot do everything.”

– Christa L. Walck, “A Teaching Life,” Journal of Management Education,November, 1997, p. 481

“Learning is my daily bread. It is wholly selfish, I fear, but I feel more alive in a community of learners than anywhere else. I am a voyeur, a peeping tom. I like to watch other people doing it almost as much as doing it myself. But unexpected (yet dependable) flashes of intuition or dogged discoveries or familiar ideas enlighten and warm me and make my joy complete. Every day.”

– Peter G. Beidler in Distinguished Teachers on Effective Teaching, New Directions for Teaching and Learning, No. 28, 1986

“The highest education is that which does not merely give us information but makes our life in harmony with all existence.”

– Rabindranath Tagore, Siksa Herfer, 1917

Robots! Clear and Future Danger For Economies

I was at a conference recently and there was a speaker who was extolling the power of robots, technology, automation and artificial intelligence (AI) in the modern workplace and how it was going to revolutionise the global economy.

There was quite a catalogue of achievements as a result of increased robotics and AI including lower ‘FTE’ (or ‘Full Time Equivalent’ of human labour) requirements and greater efficiency, productivity and decreased errors and mistakes. These were achievements that were backed by undisputed statistics and data.

The ability to create consistently high economic value using systems, robots and AI which do not make mistakes, which do not break down often, which can even be self-correcting becomes very appealing.

However amidst the glories of robotics and AI, I felt increasingly concerned about where the world was heading with the increased introduction of automation, robotics and AI and the impact this was going to have on employment, social mobility and income equality.

My concerns

Technology as a displacer of jobs.

Technology, automation and robotics initially replaced blue-collar jobs and roles from the economies. Increasingly greater sophistication of AI means that white-collar jobs are also being replaced. We read various reports about the jobs of the future being technology-related roles that help create, maintain and repair robots and their related technology, but I postulate that robots can fix themselves (and their ‘peers’) better than people ever can and over time, robots can create other robots to do the tasks which they need done.

In the past, technology was an enabler. It was a great source of enhanced productivity for nations’ economies.

However, technology has now become a replacer or displacer – of jobs, of people, of roles. It has now become a tool to enhance economic output but ends up depleting people and their earnings.

This is going to be a longer-term fundamental problem and challenge to societal and economic growth and development.

The impact on developing economies

Let us consider Philippines and India. They have spent billions of dollars investing in the infrastructure and ecosystem to help create thriving shared services and business process outsourcing (SSCs / BPOs) businesses. This was to help meet the needs of multinational companies. However, with AI and automation increasingly taking on a majority of the roles and jobs that are currently being done by millions of people in both countries, it is going to lead to a significant job loss and risk the potential collapse of the SSCs and BPO sector in both countries.

Over time, with increasing automation and AI, multinationals need not outsource various roles to locations of lower labour cost. They will instead seek to outsource the roles to nations with the lowest tax and the best technology infrastructures in which they can base their systems and robots. 

The moral obligation and income inequality

With increasing AI and automation, I struggle to see how the job losses faced by millions as a result of robots taking on their roles are going to be mitigated. There also seems to be little alternative sources of formal employment.

Whilst it is easy to highlight how automation can reduce expenses by 66% and reduce ‘FTEs,’ I think we need to look at people beyond merely being an ‘FTE’ or as a mere factor of production.

 

Over time, it is going to also exacerbate the issues of income inequality which is already one of THE pressing moral issues of our time. I’ve covered this topic at length previously.

The factors of production, the technologies, the AI and robots are going to be in the control of a very small segment of society. Whilst it may create vast economic growths, it does not lead to growth in income or wealth for the majority of the people. This will lead to societal fractures which can be devastating to nations and society.

What then the moral obligation to people and society?

Possible solutions?

Leaving this issue to be dealt with purely by market forces will not result in resolution and frankly will be disastrous in my opinion. There needs to be a concerted governmental approach to resolving this and finding solutions that work.

Using levers such as tax policies will be ineffective, particularly in a world with little tax harmonisation. For instance, increased taxation for robotics-led solutions will only encourage a beggar-thy-neighbour policy and in a world with little tax harmonisation, it becomes a useless endeavour.

 

If we accept that robotics and automation are an inalienable part of the development of society, then we need to accept that the current economic models  will not be best suited for what the world needs. Maybe it is time for us to seriously consider and contemplate universal income as a way to mitigate and tackle some of the problems coming our way as a result of robotics and automation.

Universal income is something a number of countries are experimenting with to tackle income inequality which as I’ve explained earlier will only be growing with greater automation and robotics. Finland for instance has started a pilot programme, the Swiss held a referendum in June 2016 to consider universal basic income which did not pass as only a quarter of the Swiss agreed with it, the Dutch will be carrying out a pilot programme this year, and this is just a start.

What is increasingly clear is that it is not enough to simply hope the challenges brought on by AI and robotics are going to go away, there needs to be a concerted and strident efforts made to mitigate them.

China / Japan? History repeating itself?

japanchina2

Too far fetched?

Let’s consider briefly the facts and also some important caveats.

Population demographics

The results of a census taken in 2015 has placed Japan’s population at just over 127 million – a decline of about 1 million in about 5 years. Japan’s birth rate has been long below the total fertility ratio of 2.1 (currently 1.4) and nearly a third of all Japanese citizens are now over 65. This is already a source of policy and economic challenges for Japan and one that is likely to keep growing.

China’s one-child policy starting in the 70s has had a major impact. Whilst the policy has now been relaxed, the population control genie, once out of the bottle can rarely be controlled. Changing economic trends, mindset shifts, and a movement towards an urban citizenry means less people are keen on having children. The United Nations estimates that that the number of Chinese over 65 will increase by 85% to 243 million in 2030 (from the current 131 million). The Chinese working population saw its biggest decline in 2015 – a fall by a record 4.87 million.

Both Japan and China have very restrictive and insular immigration policies which will only serve to further exacerbate the population and demographic challenges. These demographic issues will also impact economic growth and development as in time both economies will have inverted population pyramids, where one active working individual will be supporting two parents and four grandparents – and better medical facilities and healthcare will lead to a greater demand on the working population.

Perhaps the spur in investment in robotics will help alleviate these challenges?

Economic growth history

Japan’s economic growth started with the development of its manufacturing base following World War Two with support from the USA and other Allied nations. Japan’s growth was an average of 9% between 1955 and 1973 (when the first ‘oil shock’ impeded growth).

In the case of China, following a debilitating post-war economic situation and the challenges of the Cultural Revolution, the opening up and reformation of the economic system from 1978 was instrumental in China’s economic story. China’s growth has averaged between 7% and 10% since.

The main engine of growth both in the case of Japan and subsequently China was manufacturing. It will surprise users of top-notch Japanese products today to learn that from the 1950s to around the 80s, ‘Made in Japan’ meant low-quality and cheap and people preferred to use American or European produced goods. However, the Japanese investment into their manufacturing processes, research and development over time meant that they started developing high-value and high-quality goods and products. It’s a process that took decades and systemic investment into innovation.

In the case of China-made products, there are still some challenges around quality and value, but this is something that is being addressed as we now increasingly see greater investment into research and innovation.

Funding world’s developing needs

Japan became development donor from as early as the mid-50s and by the early 90s, Japan became one of the largest officual development assistance (ODA) providers in the world. Grants, aids and soft loans were provided through agencies such as the Japan International Cooperation Agency (JICA) to countries across Asia, Latin America and Africa.

Japan then became instrumental in the establishment of the Asian Development Bank (an institution for which it has maintained presidency since inception in the 60s).

This allowed Japan to project its soft-power and help foster policies favourable to Japan across recipient nations.

If we examine China’s development assistance, aid and grants – it has grown from less than US$1 billion in 2002 to over $25 billion in 2007 to currently over US$100 billion. Due to differences in the way ODAs are valued, it is possible that China’s current aid and grants may be undervalued.

China also was instrumental in the set-up of the Asian Infrastructure Investment Bank (AIIB) with an express aim of building infrastructure across Asia-Pacific. Whilst both ADB and AIIB officials have been at pains to stress that they do not see each other as competitors (indeed they have already co-financed a number of projects), a primary reason why the AIIB was set up so as to have greater autonomy by China and other partners in multilateral banking institutions.

Slowing growth and liquidity trap

In the late 80s, Japan was running a very large trade surplus and the stock market and property prices were booming (there were properties which were valued at US$1.5 million per square meter – or ten square feet in Ginza!) which collapsed in the 90s. There was an asset bubble across both the stock and property markets and when the bubbles burst, it led to the loss of trillions of dollars of value.

Deflation set in and whilst the Japanese government tried its best to promote spending (including setting interest rates at near zero levels), there was little effect. Growth has been anaemic and in 2009 the GDP fell by 5.2%.

Japan found itself stuck in a classic liquidity trap where where its monetary policy had little or no impact on economic output and production levels. This led to the ‘tragedy of Japan’s lost decades.’

Let us now consider China. Relatively easy loans made by banks? Check. Booming property prices? Check. Booming stock market? Check. Corrections across all three areas? Check.

China’s economy has been slowly significantly and it’s GDP growth rate has fallen to a level not seen since 1990. A report from the Wall Street Journal indicated that investors are hoarding cash rather than investing – a classic sign of a liquidity trap. The stock market debacle in Shanghai in 2015/2016 has also dampened investor enthusiasm.

The Chinese Communist Party Politburo has also cautioned against debt-fuelled growth and rising asset bubbles. There is also evidence to suggest that the stimulus packages initiated by the government are having little impact.

Some key differences.

Whilst there are some similarities, it is important to note a number of major differences and caveats before any quick conclusions are made. Firstly, China starts off with a much bigger population base and the reverberations from the impacts will take a much longer time before they are felt.

Secondly, China’s political system lends itself to a greater continuity in policies which may be effective in warding off economic downturns and avoid ‘lost decades’ the likes which Japan went through. Japan on the other hand went through nine prime ministers in the 11 years between 1989 and 2000 which hardly allows for lasting measures and policies.

In order to avoid the liquidity trap challenges, the Chinese government will need to focus on its war against graft and corruption and instil trust in the public institutions. Long-term and difficult policy decisions in the areas of state-owned enterprises reform need to be made in order to boost productivity. There needs to be continued efforts to keep narrowing the inequality gap and create greater employment opportunities which will in turn boost spending and help deter deflation.

The road ahead is a difficult one but there is no reason for history to repeat itself as long as the mistakes of the past are not repeated.

 

The Indonesian Connection – Islam in South Africa

 

During my exploration in the beautiful city of Cape Town, I came across a most remarkable tale. It is the story of one man’s perseverance against immense odds and the profound influence he left on a society hundreds of years later.

It is the story of how Islam spread in South Africa, from Cape Town through a man from Indonesia who was jailed in Robben Island (the very same island another great man was jailed for 27 years almost two centuries later – Nelson Mandela) by the Dutch. Globalisation was very much a part of life then as it is now! Robben Island also has now the dubious distinction of having hosted (against their will) of a number of great reformers!

This is the story of how the Auwal Mosque came to be in the Bo-Kaap (the Cape Malay part of Cape Town) and the fascinating tale of a man fondly known by all as Tuan Guru (or Sir Teacher in Malay).

20161112_194513
Auwal Mosque, Bo-Kaap, Cape Town

Tuan Guru or Imam Abdullah Qadhu Abdus Salaam (born 1712)was a man belonging to royalty from the Sultanate of Tidore ( part of the Maluku Islands in Indonesia). Abdullah led the Indonesian resistance against the Dutch invasion in the 1700s until he was finally captured along with a handful of other Indonesian resistance fighters. (It is worth bearing in mind that the Dutch East India Company brought slaves, political exiles and other prisoners from India, Indonesia, Malaysia, Ceylon amongst other places to South Africa from the 1700s onwards).

The Dutch made it a point to remove all religious paraphernalia especially the Quran from Abdullah and his men before they were sent into exile to Robben Island. The rationale for this was that by removing Islamic religious material, Abdullah will not be able to propagate Islam in South Africa and in the process curtail his ability to lead a religious resistance against them.

Abdullah was incarcerated in Robben Island from 1780 to 1792. Now, the Dutch were confident that Abdullah’s ability to preach Islam was going to be limited due to the lack of religious materials. However what they failed to understand that merely removing the Quran physically from Abdullah wasn’t going to be sufficient because Imam Abdullah was a hafiz or someone who had committed the entire Quran to memory.

During his time on Robben Island, Imam Abdullah wrote several copies of the Quran entirely from memory, two of which are preserved top this day. One of the handwritten copies is now on display at the Auwal Mosque in Bo-Kaap in Cape Town. Imam Abdullah also wrote a book on Islamic Jurisprudence which became a reference manual for Muslims in South Africa in the 18th and 19th centuries. Imam Abdullah did not allow his incarceration to fulfill what he felt was his manifest destiny nor quench his zeal to remain free spiritually whilst he was imprisoned.

20161112_191447
One of the remaining copies of the handwritten Quran by Tuan Guru at the Auwal Mosque in Bo-Kaap, Cape Town

When Imam Abdullah was released, he was already 81 but that did not dampen his enthusiasm nor his sense of purpose. He stayed on in Bo-Kaap in Cape Town and started the first madarasah or Islamic School and he taught Islam and Arabic to freed slaves. Over time, he also organised prayers and established the first mosque, the Auwal mosque in 1794

20161112_172358
Tuan Guru (Imam Abdullah) teaching children at his madrasah. An mural in Bo-Kaap, Cape Town

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It is worth bearing in mind that the practice or indeed the propagation of Islam was deemed a criminal offence until 1804. It was Tuan Guru’s unstinting efforts that led to the establishment of the first mosque in Southern Africa.

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Auwal Mosque (est 1794) in Bo-Kaap, Cape Town
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Interior of Auwal Mosque

Imam Abdullah or Tuan Guru died when he was 95 (in 1807) and left behind the foundations of what is Islam in South Africa today. Tuan Guru remains a testament to the indomitable spirit and will to effect change in a society despite the challenges and opposition to any reforms. This remains inspiring today as it was over two centuries ago.

20161112_171353
Mural depicting the development of Islam in South Africa, Bo-Kaap, Cape Town

Of Pianos and Harmony

At the Africa National Congress office in Kliptown

This is Thamba (in the photo next to me), originally from Swaziland but who was born and brought up in Soweto, Johannesburg. I had the pleasure of Thamba’s company as he showed me Soweto and helped me understand the history of South Africa, the impacts of apartheid era on society and on him personally. He went to school with Mandela’s daughter and therefore had the unique experience of having walked with Mandela and been very much a part of the struggle for equality as a young man.

Thamba recounted a very interesting anecdote about Nelson Mandela’s view on social cohesion and the need for harmony between the different races in post-apartheid South Africa. Madiba  (as Mandela is known fondly in his homeland) used the parable of a piano to highlight why everyone needed to march together to achieve progress. He explained that playing the piano with just the white keys or just the black keys, whilst able to produce a tune, will never be as rich as the symphony one can create if one was to use both the black and white keys together. This, he explained, was the route towards a  better and greater society and stressed the need for the white, black and other communities to all work together to achieve social progress. 

A simple message, elegantly put and to very powerful effect!

The unassuming flower – The books that shaped the life of APJ Abdul Kalam

 

apj-kalam-my-journeyI recently read Abdul Kalam’s (the 11th President of India and one of India’s greatest sons) biography, ‘My Journey – Transforming Dreams into Actions,’ which was a brief book about his early childhood, his development and anecdotes about how his life was shaped.

In the book, Abdul Kalam touched on the topic of books that shaped his worldview. I wanted to share his thoughts about books and the ones that shaped his life as he himself said: “the transfer of thoughts and ideas, ideals and principles is a part of the circle that is life.”

Abdul Kalam describes books having always been “close companions” in his life life and how he used them to help him“understand the world.”

The works of Leo Tolstoy, Walter Scott and Thomas Hardy were constant companions of Abdul Kalam. He also was moved profoundly by the poetry of T.S. Eliot, Lewis Caroll and Wlliam Butler Yeats.

He however highlighted a few books that had a last impact of him.

lightfrommanylamps
The first was ‘Light from Many Lamps,’ which was an anthology of inspiring stories by various authors and edited by Lilian Eichler Watson. He describes the impact this book had on him as thus: “If I am ever in danger of being swept away by my own emotions, this book brings about a balance in my thinking.”

 

 

thirukkuralThe second book was the Thirukural by Thiruvalluvar, a collection of Tamil rhyming couplets.

Written over 2000 years ago, the Thirukkural is arguably one of India’s greatest written work and discusses the human condition, ethics, morality and virtue.

He describes this particular kural (or rhyming couple) as one that has influenced him profoundly:

 

உள்ளுவ தெல்லாம் உயர்வுள்ளல் மற்றது

தள்ளினுந் தள்ளாமை நீர்த்து

(Think of rising higher. Let it be your only thought.

Even if your object be not attained, the thought itself will have raised you.)

 

 

quran-gita
Finally, the religious texts of India, including the Quran, the Vedas and the Bhagawat Gita were also instrumental in Abdul Kalam’s development.

He considered that these religious texts “all hold deep philosophical insights into the plight of man and have helped me resolve many dilemmas.”

 

From the Quran, he narrated how an excerpt from verse 35 of Surah An-Nur (‘The Light’) had a particularly profound impact on him,

نُورٌ عَلَىٰ نُورٍ ۗ يَهْدِي اللَّهُ لِنُورِهِ مَنْ يَشَاءُ

“Light upon light. Allah guides to His Light to whom He wills”

From the Bhagavat Gita, Abdul Kalam narrates the words of Lord Krishna to Arjuna in the battle of Mahabharata (during another vision of the garden where all the flowers which blossomed in the morning now fall to the ground)

See the flower,
how generously it distributes
perfume and honey.

It gives to all,
gives freely of its love.

When its work is done,
it falls away quietly.

Try to be like the flower,
unassuming
despite all its qualities.

 

Abdul Kalam once wrote a poem which he used to recite to young people he met which best describes his feelings about the written word:

Books were always my friends
Last more than fifty years

Books gave me dreams
Dreams resulted in missions

Books helped me confidently take up the missions
Books gave me courage at the time of failures

Good books were for me angels
Touched my heart gently at the time

Hence I ask young friends to have books as friends
Books are your good friends.

This was the legacy of the great Abdul Kalam.

“Hard work and piety, study and learning, compassion and forgiveness – these have been the cornerstones of my life.”

Former Indian President APJ Abdul Kalam Died At Age Of 84

 

 

FW: INCOME INEQUALITY RE: MAJOR PROBLEM

 

“I believe this [income inequality] is the defining challenge of our time.”
Barack Obama (2013)

 

“One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy.”
Christine Lagarde (2015)

 

There is a clear recognition of the risks, dangers and the pain which income inequality imposes on society. Despite the recognition, it is a problem which seems to constantly be forwarded on to successive generations to resolve rather than finding a decisive set of solutions.

We will all do well to pay heed to the US Senator John Sherman who in 1890 when he introduced his landmark Sherman Antitrust Act said that he sought to “put an end to great aggregations of capital because of the helplessness of the individual before them” and also because he fundamentally believed that amongst all of the nation’s problems, “none is more threatening that the inequality of condition, of wealth and opportunity.”

So why does inequality matter? Why is it important that we all strive towards resolving it? Societies that are hugely imbalanced and unequal ultimately become fractured which in turn lead to painful social and economic consequences that affect everyone. Neither the rich nor the poor will be able to avoid the huge social costs of a fractured society.

The stark facts

  • 62 of the richest people in the world own what the bottom 50% of the world’s population own.

  • 1915: The richest 1% of Americans earned 18% of the national income.
    1930s to 1970s: The share plummeted and remained below 10%
    From the 1970s: The share has increased to almost 30%

  • 1980: The top 0.1% wealthiest Americans controlled about 9% of all household wealth
    2015: The top 0.1% own 22% of all household wealth.

  • USA: The top 1% of America control 40% of America’s wealth

  • Germany: Poverty has risen by half since 2000.

  • 1965: CEO pay at the largest 350 U.S companies was 20 times as high as the pay of the average workers
    1989: The figure is 58 times as high
    2012: The figure is now an astounding 273 times as high.
    (It is worth bearing in mind that Peter Drucker argued that the pay ratio between the top executive and the humblest worker should be no greater than 20 to 1.)

  • OECD: The gap between the rich and poor is now at its highest level in OECD economies in 30 years according to a report produced in 2014. The overall increase in income inequality has been driven by the richest 1%.
  • 2008: The United Nations University (UNU) and the World Institute for Development Economic Research (WIDER) estimate that the global Gini coefficient (a measurement of inequality between 0 – representing complete equality and 1 – representing complete inequality) was 89.

    An alternative way to interpret this is that in a population of 10 people, if one person had $1000, the other nine have only $1 each.

  • 2014: The Credit Suisse Global Wealth report estimates that that the richest 0.7% (who hold over US$1 million in wealth) held 44% of the global net worth.

Some context

The economic success stories of many countries hides a dangerous truth – that a significant majority of economic gains are going to those at the very top of the income distribution whereas those lower down have seen real incomes stagnate or diminish.

This has in turn perpetuated further inequality as those in a position of privilege often use their wealth and influence to shape policies that further increase their concentration of power. These policies have not necessarily been in the interests of those lower down the income ladder.

A research conducted by Martin Gilens, a political scientist at Princeton, lends credence to the notion that the US government responds more positive to the most affluent ten percent of Americans whilst “the preferences of a vast majority of Americans appear to have essentially no impact on which policies the government does or doesn’t adopt.” (A video of Gilen’s lecture can also be viewed here.)

The erosion of the social compact

This wasn’t always the case though. Whilst there has always been inequality, it has never been to this extent or been as pervasive. There was also more concerted effort to reduce the level of inequality and dampen its deleterious impact on society.

The experience of the First World War revolutionised American attitudes towards taxation and redistribution of income. When the War Revenue Act of 1917 was passed, there was talk of “conscription of income” and “conscription of wealth” at a time when young men were enlisting en masse. “Let their dollars die for their country too,” one congressman said. The call for fiscal patriotism helped legitimate the progressive income tax in the United States, and by 1944 the top marginal rate had risen as high as 94 percent.

Across Europe, a fear that the lack of reform could lead to social and political turmoil and the horrors of two World Wars meant that policies such as social insurance, minimum wage, a strong welfare state and progressive income tax were implemented leading to more egalitarian societies and economies.

inequality 2The experiences of global ears produced visions of a social bond holding countries together and nurtured the notion that every single person owed a debt to the welfare of the broader community and society.

However since the 70s, the disappearance of these conditions has meant that the support for egalitarian public policies has also diminished.

We now live in a world where even high skilled jobs are being commoditised so that even highly educated workers are not making sufficient progress as gains in economic growth are limited to a very elite group of financiers, entrepreneurs and managers. In the past only unskilled workers lost jobs to automation, now even highly skilled occupations are at risk with the advancement of artificial intelligence, robotics and automation.

The social structure of Silicon Valley provides us with an instructive view of the future: One where expert systems have replaced the majority of people and a tiny but well-remunerated minority direct the economy whilst the majority exist to serve them alone.

The conflict is no longer just between the working class and the middle and upper classes – it is now between a tiny elite and the great majority of citizens. As the majority develop a sense of common interest, or what Marx may have termed ‘class consciousness’, the need to resolve inequality will become more acute as the resentment of it intensifies.

 

What happens when income inequality starts to become entrenched?

  • Health: Societies that are more unequal tend to have lower life expectancies, higher infant mortality, higher levels of infant mortality and high levels of diseases and conditions such as HIV/AIDS.
  • Human capital development: As inequality rises, scores on the UNICEF index of child well-being become significantly worse. Literacy rates are also lower and youth unemployment also becomes a major issue. A higher level of equality also leads to a greater level of innovation as a result of greater access to opportunity.
  • Social mobility: Inequality restricts social mobility – equality of opportunity is enhanced by greater income equality. Reduced social mobility further exacerbates income inequality and this becomes a vicious spiral from which an effective functioning economy becomes more and more difficult.

    inequality1 2
    (C) Walt Handelsman
  • Economic progress and stability: An IMF report highlights that by reducing inequality and bolstering longer term economic growth are “two sides of the same coin.” In both rich and poor countries, inequality is strongly correlated with shorter spells of economic expansion and growth over time. Unequal economies are also more susceptible to severe boom-and-bust cycles leading to greater volatility and crisis. Extreme levels of income inequality depress economic growth. An OECD report estimates that inequality has had a cumulated loss of GDP across OECD economies of 8.5% over twenty-five years.
  • Social challenges and issues: Inequality breeds corruption. Unequal societies also lead to greater economic instability. If one considers the root causes of the Arab Spring, the lack of economic opportunity or equality is one of the main drivers leading to revolt.

A blueprint for change and resolution

The solution and change required for income inequality is not a zero-sum game. There will be those who are impacted more than others, but it is essential in calibrating the world in a more equal way.

It is very easy to be dangerously complacent and ignore equality, but chronic economic inequality hurts everyone, both the rich and the poor.

Resolution of a problem like inequality requires a revolutionary approach. We need to accept a fiscal revolution or risk a social one.

I’ve highlighted below briefly some key practical steps that need to be considered as we seek an urgent resolution to the problem of income inequality.

  1. Tax reforms – Income taxes need to be more progressive (the way they were previously in times of greater equality). There needs to be a reform in the way the transfer of wealth is also taxed. The OECD has suggested that attempts to reduce inequality tax and transfer policies will not harm growth as long as the chosen policies are well designed and implemented. The OECD further argues that redistribution efforts should focus on families with children, on the youth and the improvement in human capital investment through the promotion of skills learning and development.
  1. Continued focus on economic growth and employment – Policies targeting economic growth need to continue as growth ensures jobs are created and ensures employment. Employment will support social mobility which is essential to the reduction of inequality.
  1. Ensure emphasis on social mobility – Social mobility is a key driver towards the reduction on inequality. Emphasis on education, skills learning and development is vital to support social mobility.
  1. Support small savers and small businesses – Policies should not be tilted towards just merely taxing the rich but also be aimed at increasing the wealth of small savers and businesses. For instance we should consider the introduction of accounts for small savers and businesses that guarantees positive returns in excess of inflation. It is also a widely observed phenomenon that lower income families borrow more to support their consumption and this in turn creates a systemic risk.
  1. Enhanced social policies – Governments and policy makers should also consider more directed interventions to enhance the social conditions of lower income families. For instance, in the UK, the Child Benefit offers a weekly allowance to parents for every child they raise. The transfer could be better targeted by making the income taxable as personal income, which will reduce the size of the benefit for those in higher tax brackets or who do not have face any other mitigating circumstances. In the UK, child poverty has dropped sharply whilst in the USA; it has risen by a third between 1969 and 2013. A child-benefit programme will help make a major dent in child poverty and also represent a powerful investment in the future. Introducing a child-benefit program in the US will make a major dent in child poverty and represent a powerful investment into the future.
  1. Minimum wage – Governments should also take an active review of the minimum wage policies in their countries and recalibrate them to local conditions. There is always a temptation to keep minimum wage lower because neighbouring countries are keeping theirs lower, but this beggar thy neighbour policy will not benefit anyone in the long run. Countries that make the effort to ensure greater equality will be healthier in the long term.
  1. Automation and technological change – Governments should take an active interest in the direction of technological change. It is mostly governmental grants and labs that are responsible for the underlying research that has led to the progress in automation and technology and they therefore have the right to ensure a clear review is undertaken to mitigate the social impacts of technological change through appropriate fiscal and taxation policies.

It is crucial that we as a collective rise up to face the challenges of income inequality and work closely to create a more equal society. The corrosive impacts of inequality will affect us all and the sooner we can find solutions to achieve an equal society, the better, for all.