Turning the tide on inequality

1st June 2023

Jayati Ghosh, professor of economics at the University of Massachusetts Amherst, talks to Chris Seekings about how inequality is destroying the planet, and what we can do about it.

Inequality is the root cause of climate change, biodiversity loss and many of the social challenges facing countries across the world today. However, vested interests have long sought to distract us from this fact, enabling the unsustainable lifestyles that have brought us to the point of no return for the planet as we reach environmental tipping points.

These are the views of professor Jayati Ghosh, who, for decades, has argued that a redistribution of wealth and realignment of economic systems is necessary to tackle the greatest challenges facing humanity.

An author of various books on our unsustainable way of life, and the recipient of numerous awards for her work, Ghosh explains how inequality is driving us to destruction, and what we can do about it.

Below is an edited transcription from the discussion:

How much accountability should people in the West take for their ancestors giving rise to free-market capitalism, the Industrial Revolution and historical CO2 emissions?

There’s a historical carbon debt, as around 80% of emissions came from today’s advanced economies between 1850 and 2011. But I don’t think of it in terms of ‘the West’, because there is a lot of inequality within populations. There’s a broader issue of lifestyle and aspirational tendencies that exist all over the world, where everyone is aspiring to a material existence that is simply not sustainable. However, in terms of the remaining carbon budget, there must be more dramatic reductions in rich countries; not proportionate, but much larger. It must happen alongside increasing carbon emissions in some countries to provide basic human rights, such as access to electricity and transport. The Indian government is demanding more finance because we need to electrify, which is true, but they are allowing massive excess carbon consumption of the top richest 10% and 1%, which we need to curb.

How much more carbon is being emitted by the world’s richest people?

The World Inequality Lab has found that the top 10% of the world’s population, the richest, account for about half of carbon emissions. The bottom 50% only account for 20-30%, and that has been coming down in every region. So, the idea that you must make everybody change their lifestyles is completely misplaced. It’s a lie that is propagated by those who want to distract attention from this inequality.

What can we do to bring down the emissions of the top 10%?

I would go for a combination of severe taxing of types of consumption and outright banning. I don’t see the need for private trips to the moon. Private jets must be taxed, let’s say at 3,000% for every ride, and the revenue put into carbon funds. In the US, a sizeable proportion of carbon emissions come from second homes, so tax that, and there’s no need for SUVs in cities.

I would tax types of consumption that are excessively carbon-emitting instead of going after everybody. The only reason it’s not taken seriously is because of the political pressure of the elite, because economic power gives you political power, and they use it to change legislation, regulation and policy. There is so much scope for wealth taxes on the extremely wealthy, but you also need an asset register to know where the wealth is, and country-by-country reporting for all nations to share with other tax authorities.

An economist did an assessment of the 965 richest billionaire families in India and, since the pandemic, their wealth has increased threefold. But in 2019, if we had taxed their wealth by 4%, it would have increased GDP by 1%. To put that in perspective, that would double the health budget of central and state governments put together in India.

Do you think that we need a different perception of wealth and success, and that this could be taught in schools at an early age?

Absolutely, and this brings us to the broader question about the obsession with GDP as the indicator of progress. People have been talking about other indicators for a while now, but GDP remains crucial in everybody’s minds. We must get rid of that. We need a dashboard of at least three or four indicators, which all countries would be forced to collect data on. Flourishing can be better public services, more open spaces, more parks for children, less pollution – all the things that a lot of GDP destroys. The UN is working on this, but the process is very long and painful.

Are developing countries such as India learning from the mistakes made by advanced economies?

I wish that were true, but in India, the broad economic strategy is taking all the worst mistakes of the US and deciding to go down that route: extreme pollution, extreme environmental destruction, extreme appropriation of people’s land and livelihoods, and extreme inequality and privatisation of essential public services. It doesn’t mean that there are not great ideas out there, but I don’t see our current economic strategy as an example of those.

The book you co-authored, Earth for All: A Survival Guide for Humanity, outlines five major initiatives to put us on a sustainable footing: empower women, eliminate poverty, reduce inequality, transform food systems and overhaul energy systems. Why is empowering women so critical?

Women are responsible for provision within homes and, given the gender structure of our societies, they are still the ones who are responsible for these patterns of consumption. So, they can be agents of positive change if they are empowered. When we are thinking of transforming food systems, you cannot do that without a much bigger role played by women. Everywhere, there is displacement or loss of land and livelihood, and soil erosion, so women have a critical role in adapting to these changes because they have been the guardians of a particular way of life that is less ecologically destructive in many traditional communities.

It doesn’t happen overnight, but you must look at the labour market and recognise the contribution of unpaid work by women – that is huge. So much policy is based on the male breadwinner model, which doesn’t allow women to get the legal requirements for some autonomy and independence, and they are so inadequately represented in the political field. I’m a big believer in women’s reservation at the local bodies level all the way up to the top, and on company boards, because if there are enough women, it changes the culture in many ways.

Achieving the five initiatives outlined in the book is described as the ‘giant leap scenario’. What is the public’s role in ensuring that happens?

It can only be done if the public is actively involved in demanding these things. It’s not going to happen because a state suddenly sees the light and becomes good. Even if you elect well-meaning politicians, there are so many vested interests, so you need major popular mobilisation that will force governments to respond. Pre-pandemic, especially, we had young people and Fridays for Future, but it wasn’t focused. There wasn’t a specific strategy to demand of governments. But we do need public protest, civil disobedience, whatever it takes, because it’s all so urgent. Most of the mass media is presenting everything in a way that distorts or hides the reality. These Intergovernmental Panel on Climate Change reports should be front-page news. They are so deadly, so terrifying, and yet, they’re not; nobody is bothered.

Do you think COP summits are having a positive effect on tackling the climate crisis and inequality?

I suppose the last one that did was Paris. It got people to commit to something, and there was some progress. Since then, no. It has been very depressing, and it’s so ironic that these are also very climate-expensive summits, with all the private jets flying in with the big heads of corporations thinking how they can make yet another quick buck out of this latest opportunity of ‘greening’. Does it mean we can do without them? No, we can’t, but you have the Emirates as the host for the next one, and these people have lost all sense of irony or conflict of interest. The summits must be restructured, because right now they are just enormous and expensive talking shops.

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