Fernando Alcoforado*
This article aims to demonstrate that wealth and poverty cannot be treated in isolation, since they are the sides of the same coin forming an irreducible set. The analysis of wealth cannot be dissociated from poverty, as the concentration of wealth generates exploitation, which is a founding element of poverty. This means saying that the dogma that promoting the concentration of wealth and income would be the means for economic development and overcoming poverty is a capitalist fallacy. There is a general thought that the causes of misery and poverty are linked to family maladjustments, the individual’s educational unpreparedness for the world of work and the individual’s lack of capacity to undertake. As will be shown in the following paragraphs, the causes of poverty are related to social inequalities resulting from the concentration of wealth in capitalism.
However, why associate poverty with capitalist society, if there has always been poverty and inequality throughout human history since society was divided into social classes at the dawn of humanity? Does this phenomenon, always present in the various social organizations throughout the history of humanity, present some central characteristic in the capitalist mode of production, different from other social systems? Does capitalism generate a poverty that is founded on different bases from other societies? The answer is that, in capitalist society, poverty is the result of the private accumulation of capital, through the exploitation (of surplus value, that is, the part of the work not paid by the employer to the worker), of the relationship between capital and work, the relationship between the owners of the means of production and the owners of the workforce, the relationship between exploiters and the exploited, the relationship between the direct producers of wealth and the usurpers of other people’s work.
In capitalist society, it is not precarious development that generates social inequality and poverty, as many people think, but development itself. In capitalism, the greater the accumulation of capital, the greater the wealth and the greater the poverty. The more wealth the worker produces, the greater the exploitation, the more wealth is expropriated (from the worker) and appropriated (by the capitalist). Thus, it is not scarcity that generates poverty, but abundance (with the concentration of wealth in a few hands) that generates inequality and absolute and relative impoverishment. Thomas Piketty, French economist, wrote a book called Capital in the Twenty-First Century published by The Belknap Press of Harvard University Press, Cambridge, Massachusetts, 2014, in which he advocates progressive taxation and taxation of wealth as the only way to stop the trend of growing inequality of wealth and income in the capitalist system. To reduce social inequalities, Thomas Piketty proposes, therefore, a measure that is considered utopian, which is the taxation of large fortunes.
Piketty suggests, among other things, the fight against economic inequality and the concentration of wealth in the hands of a few. With about 500 pages, Capital in the 21st Century is divided into four parts in which it deals with the question of income, production, capital and its transformations throughout history, mainly from the Industrial Revolution in the 18th century, and makes a true genealogy of the question of income, above all, with an extensive survey on wage policies with a focus on France, the United Kingdom and the United States, which were very useful for a reading about the history of global capitalism and its problems. Thomas Piketty also analyzes inequality, income concentration, the rentier as an enemy of democracy, the global inequality of wealth in the 21st century, the issue of families holding global wealth and, finally, the taxation and regulation of global wealth.
Piketty challenges the widely held view that free-market capitalism distributes wealth. What Piketty shows statistically is that capital has tended, throughout history, to produce increasing levels of social inequality. This is exactly Marx’s theoretical conclusion, in the first volume of his version of O Capital (Boitempo Editorial, São Paulo, 2013). In Marx’s Capital, inequality is seen not as the result of the distribution of wealth as Piketty’s Capital in the 21st Century presents, but as an inevitable result of the production of wealth under capitalism. Today we have fewer and fewer families owning almost half of global wealth. The disparity between the average pay of workers and chief executives was about thirty to one in 1970. Today it is well above three hundred to one and, in the case of MacDonalds, about 1200 to one [OUTRAS PALAVRAS (OTHER WORDS). David Harvey: leia Piketty, mas não se esqueça de Marx (David Harvey: read Piketty, but don’t forget about Marx). Available on the website <http://outraspalavras.net/posts/david-harvey-leia-piketty-mas-nao-se-esqueca-de-marx/>%5D.
The United Nations has published a report on the situation of poverty in the world. The UNDP survey was carried out in 109 countries, bringing together a total contingent of six billion people. Of this total, what was found is that 1.3 billion human beings – that is, a quarter of the investigated population – live in poverty, which is a very startling fact. In Brazil, data from the IBGE (Brazilian Institute of Geography and Statistics) show that the monthly income of the richest 1% of the country is almost 34 times higher than the income of the poorest half of the population. These data show that the income of the poorest 5% fell by 3%, while the income of the richest 1% increased by 8%. About 889 thousand people are considered rich in Brazil. This number represents only 0.42% of the Brazilian population. Approximately 45 million Brazilians live on a monthly income that is less than the minimum wage. The population living in poverty in Brazil, according to the most recent data from the IBGE, corresponds to 52 million inhabitants, of which 15 million people are in extreme poverty. Among those who live in extreme poverty and are homeless in Brazil, there are approximately 221,869 people according to the Institute of Applied Economic Research (IPEA). Poor are also those who do not have housing, who do not enjoy the right to housing, which totaled 5.8 million homes in 2019, of which 79% were concentrated in low-income families.
According to Marx, all wealth in society is the product of work, created by the physical and mental efforts of the working class. Profits, which mean the return on capital, are as Marx explained in O Capital (Boitempo Editorial, São Paulo, 2013) nothing more than the unpaid work of the working class, that is, the difference between the value that is produced of good or service and the value that reverts to workers in the form of wages. An increasing rate of profit, therefore, only implies an increasing exploitation of the working class, which necessarily means more of the wealth in society accumulating in the hands of capitalists. Marx demonstrated in his three volumes of Capital how, by various means, capitalism can exploit the working class for greater profits: 1) by extending the working day, through an intensification of work within a given time; and, 2) increasing workers’ efficiency and productivity, by replacing labor with machines, etc. All this is reflected in the increase in the proportion of unpaid work in relation to the value of what is produced by workers.
The stark contrast between the colossal economic, scientific and technological development achieved by humanity and the presence of immense population contingents subjected to hunger, poverty and misery is proof of the absolute failure of capitalism as a civilizing project. After two and a half centuries of the Industrial Revolution, which consolidated the material bases of the capitalist mode of production, triggering an exponential rise in labor productivity, more than 1/4 of humanity still experiences the scourge of hunger daily of poverty and misery. The problem lies in the extreme concentration of income and wealth. In a fully commodified society, those who are deprived of money have no means of accessing food. The growing mismatch between the unbridled expansion of wealth and the perpetuation of poverty with gigantic social needs is a reality inherent to the capital-labor relationship. Hunger, poverty and misery of a large part of the population are the maximum expression of the social inequality inherent to the capitalist mode of production. The presence of a large mass of impoverished workers who live on the threshold of biological survival lowers the traditional standard of living of the workers as a whole. Poverty and misery on a large scale thus work as an anchor that reduces the cost of reproducing the workforce, enhancing the extraction of surplus value and raising the rate of profit. The relationship between accumulation of wealth and accumulation of poverty is direct and inexorable.
The current neoliberal strategy of “confronting” poverty with the adoption of state policies of income transfer is different from the classical liberal conception until the 18th century, when the individual-personal problem of lack was thought of as the cause of poverty, and which responded to with the organization and encouragement of philanthropy, is different from the policy put into practice by governments after 1835 in Europe, when there were the struggles developed by the proletariat between 1830-48, which considered poverty as begging and as a crime, thus treating it with repression and reclusion, and it is different from the Keynesian orientation (20th century until the 1973 crisis) that considered the “social question” as a problem produced by the development of capitalism (or as an insufficient development), internalizing the “social question” and dealing with -a systematically through the adoption of state social policies with the concession of rights and through the provision of goods and services.
Is there a solution that leads to the reduction of social inequality? The answer is that the end of social inequality will only be achieved when the Welfare State is implemented along the lines of that practiced in Scandinavian countries with the necessary adaptation to each country, because it is the most successful social system ever implemented in the world because embodies the most positive elements of both socialism and capitalism. In 2013, The Economist magazine shows that the Nordic countries are the best governed in the world. The UN World Happiness Report 2020 shows that the happiest nations in the world are concentrated in Northern Europe. Nordics have the highest ranking in real GDP per capita, the longest healthy life expectancy, the greatest freedom to make choices in life, and the greatest generosity. This model of society should be adopted because throughout the history of humanity, liberal capitalism, socialism and neoliberal capitalism have failed to build an economically, socially and politically just and humane society in several countries of the world, leaving as a legacy the barbarism that characterizes the world we live in.
Scandinavia is therefore the birthplace of the most egalitarian model that capitalism has ever known. Its origins date back to Sweden in the 1930s, when the social democratic hegemony in the government of the Nordic country took hold, initiating a series of social and economic reforms that would usher in a new type of capitalism, in opposition to the failed liberalism of previous decades. Thus, the so-called Scandinavian model was born, which would quickly go beyond the Swedish borders to become influential in Northern Europe, but also an important reference in the formulation of heterodox (progressive) economic policies across the planet. The success of the Scandinavian countries’ model of society was due to the combination of a broad Welfare State with rigid mechanisms of regulation of market forces, capable of putting the economy on a dynamic trajectory, while achieving the best social welfare indicators among capitalist countries. To end barbarism, promote economic and social progress and establish civilized coexistence among all human beings, it is urgent to build a new model of society in the world, which is, therefore, the Welfare State in the Scandinavian molds adapted to the conditions from each country.
* Fernando Alcoforado, 82, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional Development by the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning and planning of energy systems, is author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019) and A humanidade ameaçada e as estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021) .
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