"Markets are not autonomous, spontaneous phenomena operating according to their own natural laws. In reality, markets are social constructions whose rules are set by institutions and regulated by governments that should be accountable to the participants and citizens. When there is growth and diminishing inequality, the rules governing markets are working of the middle classes and the poorest sections of society. However, when only the rich are gaining, the rules start bending towards their interests exclusively.
"Oxfam has spent 70 years working to fight poverty and injustice in more than 90 countries. Oxfam has fought against unsustainable debt and against tax havens. Through these experiences, Oxfam has witnessed first-hand how the wealthiest individuals and groups capture political institutions for their aggrandizement at the expense of the rest of society. Today’s unprecedented levels of economic inequality tell us that left unchecked, representative institutions will decay further, and the power disparity between the haves and have-nots may become entrenched and immutable.
"Strong quantitative data support Oxfam’s concerns regarding rising wealth concentration and unequal political representation. A recent study presents compelling statistical evidence that the preferences of wealthy Americans are represented in their government, compared with those of the middle classes. By contrast, the preferences of the poorest people demonstrate statistical impact on the voting patterns of their elected officials. If this trend continues, public policies will most likely reproduce the conditions that are worsening economic inequality and political marginalization.23
"How do the rules governing national economies become subservient to elite interests? This is a problem inherent to the nature of politics. As we have seen, the influence of wealthy groups leads to imbalanced political rights and representation. The outcomes include the capture of legislative and regulatory decision-making functions by those powerful groups.24"
::: "Wealth begets wealth, and once the political and institutional system is rigged in favor of an elite, the consolidation of their privileges cascades down through different mechanisms. This ‘privilege cascade’ affects elements that otherwise should be conducive to fair opportunities and protection for all members of society. What, by some measure, looks and sounds meritocratic is a result of rules that are biased in favor of the elite. Good quality education and other public services overwhelmingly benefit the few, providing them with more opportunities for development. Equality of opportunity is a central tenet of inclusive modern societies. It implies that a person’s achievements or outcomes should not be determined by their race, gender, family, or any other immutable characteristic. There are strong arguments to defend a certain level of income inequality in any society as it may result from entrepreneurship, effort and merit, as explained earlier; but very few people would oppose equality of opportunity for everyone. Recent evidence shows that income inequality and inequality of opportunity are highly correlated: children’s life chances are strongly determined by their parents’ socio-economic status.55 In a truly fair society, social mobility would be high, but this is not the case where there are high levels of economic inequality. Academic Miles Corak plotted the Gini coefficient against the extent to which a person’s income is determined by their parents’ income (see Figure 6). In Denmark, for instance, a country with a low Gini score, only 15 percent of a young adult’s income today is determined by their parents’ income; in Peru, which has a Gini score that is among the highest in the world, two-thirds of what a person earns today is related to what their parents earned in the past. This relationship is known as ‘the Great Gatsby curve’. As F. Scott Fitzgerald said, the rich ‘…are different from you and me’. And so their offspring are too."
"WORKING FOR THE FEW
: Political capture and economic inequality" (Oxfam briefing paper, Janurary 2014)
23 (2005) 'Economic Inequality and Political Representation’, Working Paper,
August 2005, http://www.princeton.edu/~bartels/economic.pdf
24 See also different examples in (2012) Why Nations Fail: The
Origins of Power, Prosperity, and Poverty, New York: Crown Business.