18 August, 2022


Privatised Charity & Systemic Poverty: Two Incompatibles In Neo-Liberal Economic Paradise!

By Ameer Ali

Dr. Ameer Ali

Dr. Ameer Ali

A systematic and unrelenting attack by neo-liberal economic orthodoxy on New-Deal-modelled economic structures built after WWII has made poverty systemic and left the onus of its eradication in the hands of private charity. Governments’ shift of priorities and programs from people to market, from households to corporations and from welfare to growth has created this horrendous outcome. The public sector has been progressively denigrated and rolled back to make way for private sector to expand and encroach into what was once consensually accepted as the legitimate terrain of state management, such as education, health care and welfare of the old and vulnerable. This radical transformation in economic priorities was undertaken in the name of economic efficiency and growth. In the course of this conversion even the vocabulary of budgetary allocations to health and education has been changed from investment to expenditure. In short, the neo-liberal phase of capitalism ushered in in the 1980s under a more fashionable cliché of globalization has made economic growth and poverty inseparable twins.

The global economic record of the past four decades – since this orthodoxy was enthroned by ‘Washington Consensus’ and its comprador intellectuals as the most desirable economic design ever invented by humanity – has exposed the hollowness of its promise of prosperity for all on the one hand and the stark reality of a class war pushed from the top by governments backed by a powerful corporate elite. However does one care to read the available economic and income data one cannot escape the horrible fact that the richest 20 per cent of the world population consumes 90 per cent of goods produced, while the poorest 20 per cent shares just 1 per cent. The Credit Suisse Research Institute in its 2013 report on wealth distribution among the world’s adult population carries this startling truth: Of a total 4,666 million adults and a total wealth valued at 241 trillion, a staggering 83 per cent of the latter is owned by a tiny 8.4 per cent of adults leaving the rest 91.6 per cent to share the remaining 17 per cent. An Oxfam report points out further that the wealth of the 85 richest people in the world is equal to the wealth of the poorest 3.5 billion, and that since late 1970s, tax rates for the richest have fallen in 29 out of 30 countries for which data are available. It is now public knowledge that the giant corporations do not fulfil their tax obligations in the jurisdictions in which they earn their profit. Their transfer pricing mechanism is a deliberate device to dodge taxes.

While the rich are able to employ experts in creative accounting at great cost to minimize (if not evade altogether) tax obligations the ordinary citizen is called upon by politicians to make sacrifices to balance national budgets. Governments’ inability or unwillingness to make the rich pay and their readiness to burden the masses with oppressive levies and diminutive benefits is also endorsed by comprador intellectuals and corporate media as responsible acts to protect the enterprising and eliminate the culture of entitlement. “There is no free lunch” is the modern cliché propagated by these champions which in reality sanitizes the economic injustice embedded in neo-liberal economic philosophy.

Zygmunt Bauman, the Professor Emeritus of Sociology at the University of Leeds, captures this development in his typical style: “almost everywhere in the world inequality is growing fast and that means that the rich, and particularly the very rich, get richer, whereas the poor, and particularly the very poor, get poorer – most certainly in relative, but in a growing number of cases in absolute, terms” (Bauman 2013: 10). While the rich enjoys a virtuous circle of affluence in the sense that they are richer because they are rich, the poor suffers from a vicious circle of poverty in the sense that they are poorer because they are poor. Inequality has deepened because of its “own logic and momentum” (Bauman: ibid.)

While the so called free market has created jobless growth in several nations, governments on the other hand have given up on targeting full employment as a worthy objective and instead are opting for a loosely defined concept of natural rate of unemployment, which also has another convoluted moniker, non-accelerating inflationary rate of unemployment (NAIRU). The latter obviously aims at inflation control over unemployment reduction thereby protecting capital from value erosion at the expense of employment growth.

Balancing budgets, freeing markets, privatizing public utilities and enterprises, maintaining credit ratings, and broadening tax base have become the essential ingredients of neo-liberal growth mantra. Diminution of foreign aid to poorer nations in the name of opening opportunities to free trade is another dimension of this recipe. The masses of poor, the involuntarily unemployed and the under privileged are the unfortunate collaterals in this economic avalanche.

Where is the salvation for the impoverished and immiserized? They are left to the tender mercies of private altruism. Whether it is the Salvation Army, the Anglicare, the Red Cross, World Vision or any other celebrated NGO, all of them ultimately depend on private philanthropy and individual contributions for resources. Charity has been privatised while poverty has become systemic.

Is there an alternative? From the anti-G7, anti-IMF and anti-WB protests that started in Berlin in 1988 to Occupation Wall Street in 2011 and to the anti-austerity marches in Europe in 2013 public discontent against neo-liberal economic regimes is spreading. The economy of Greece which is on life support is being forced by EU to sacrifice and control the discontent if it were to be resuscitated. In complacent Australia too, student protests against an ideology driven budget in 2014 has added to the worldwide discontent. Private charity cannot cope with systemic poverty. Pope Francis described the system as “madness’. Without destroying the foundations of the current economic system and replacing it with an economic structure that puts people’s welfare above economic growth there is no salvation to the immiserized and impoverished. Economic policy priority should shit from growth to people. Take care of the people GDP will take care by itself.

*Dr. Ameer Ali – School of Management and Governance, Murdoch University, Western Australia 

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Latest comments

  • 0

    Dr Ameer Ali

    You have touched on a topic that is hardly discussed in the columns of any leading Sri Lankan journals or media.

    The target of the neo-liberals is to create a global corporate power by crushing democracy and by replacing it with the rule of the international corporates with the help of neo-liberal oriented political parties. US which elects Presidents with the money power of the global coporates uses its military power and its world dominance to oust left leaning governments that promote people friendly measures.

    President Obama is now reportedly engaged in a project to impose global corporate rule intenationally. He is pushing through his Fast Track Trade Promotion Authority project under which international treaties will replace national democratic laws relating to environment, consumer rights and workers rights. International corporate control could be exercised by panel of arbitrators appointed under such treaties who would obviously come from the big corporates. Commentators have said that if any nation then tries to legislate stronger laws to protect the public than those panels approve under the given treaty, that nation will be fined by any corporation whose ‘rights,’ under these treaties have been ruled by those panels to have been infringed by that violating nation. ( read:

    India, until the advent of Manmohan Singh government was one of few developing countries that resisted the encroachment of the global corporates in many spheres of economic activities. Many areas reserved for local corporates were opened up by the Manmohan government to the global corporates. And now with the election of the right-wing BJP, that autocrat Modi has opened many more areas paving the way for the dominance of global corporates. The same thing has started happening in Sri Lanka with the installation of a UNP government. In Sri Lanka, in the very near future, free education and free health services will become things of the past.

  • 0

    We have been told innumerable times that private entities are better managed, more efficient and more productive. Truth be told there is some evidence for this. Yet a lot of the private charities love work under the radar, collecting funds from the public ostensibly for charitable work, often after some natural calamity. Yet the evidence of the work done remains elusive. We do know that they are run by many a high-titled individual and controlled by boards of directors, usually consisting of political spouses and the like with time on their hands. They are well paid for the privilege too. When examined closely it turns out that with most some 80% of the funds are consumed in Administration. The latest to be so-exposed was the RED CROSS, that once revered organisation, which collected nearly US$500 million after the earthquake in Haiti, for the benefit of the Haitians, yet allegedly built a mere 8 or so houses there. What hope is there of eradicating poverty at this rate ?

  • 0

    The colonial system was replaced by western educated elite in governing the country. Colnel Olcott introduced a buddhism as a philosephy. Anagarika dharmapala and many others fought for the sinhala buddhist minority.
    It was S.W.R.D. Bandaranaike who aftyer allieing with the UNP helped us gain independence. He was disapointed that the western educated elites and mission school passed out men gave no place to the sinhala educated Buddhist. The sanga backed him in 1956. The dismantling of neocoloniasm began. The vernucular and the ordinary man was given aplace and Prof. Malaresekera was appointed as Ambasador to Russia.
    We shook of the foriegn yoke and began a new journey. admitting that the tamil language be given a place the agreement was dissruprted by JR. Managing change is to correct wrongs created by fastchange which is necesary to breakthe yoke of neo colonism.
    The catholic church and cetain foriegn denominations get loclas to pay heavily for their granting funds. Many use such funds in a corrupt manner. While minoritie must be given a place foriegn interference should not be condoned. Buisness contact abroad for locals also have top pay a price. The catholic church manuvers. MR close ties with catholics had to paid by sinhala buddhist.

    It is to be remembered Bishop Lakshman Wickremesinghe RW s uncle struggle for a true indegeneos church. REligions have good qualities but unscruplous people should not be al0owwed to create a neocolonistic intrvention. RW’s father was for local industry and for the people of Sri Lanka. RW has shown that the private sector should be regulated but market has to be freed. Thios is the same policy that China followed succesfully. We can shke the shakeles of neocolonism by steering an non aligned path.

    Rw has indicated that peace s needed for India and Asia to continue to develop. We must fight for an peaceful and united Asia. America interfered in the middle east and the Soviet union. christianity is sometimes used to influ7nce people. They are now moving in China. Christianioty by having a persernal relationship with Jesus transforms lives. But not to stop fighting againts inequalities in a fleshy world.

  • 0

    Thank you Dr. Ali for your article. Hegel’s thesis, antithesis and synthesis can be used to understand mankind’s political and economic actions. I guess it is the middle path that is needed and tenable. Private sector and private enterprise are essential while at the same caring for the poor is essential.

    I think of countries like Sweden and Norway where we can see less inequality.

  • 0

    Anti-Western. Muslim policies can be camouflaged and painted in many colors like green, red,blue, white.. But what is the use? With out Britain and Dutch ruling and introduce to Lankave the Roman-Dutch law and Saudi and Iran had ruled ans Introduced Ayatollah ands Sharia, many commentators hand might have gone by now for writing these.

    China signed the Port City Project itself with out capturing the country. British government released the country which was sold by Ehilapola to East Indian Trading copy. A hundred years ago, the Railway, the ports everything they built are the one being used. The one Chinese built last and this year are abandoned. What would have happened if the China ruled with Maoism? Old King might have deposited 36 Billion Dollars in Swiss banks, instead of 18 billions, form the looted Mullivaikkal jewelry.

    Richest part, most educated part, most employed part in the country has lost all its characters. The most crime free part of the country is being used as drug hub by army. [edited out]

  • 1

    Given the widely reported economic crises it is clear that the current systems of government have not delivered, except for the very rich, the 1%.

    Generally the 1% have done quite well, which is a good thing since they have 1% of the world’s intelligence and the God-given ability to run things very well, after all we are still here and the world had not blown up yet.

    So continue as it is, let the gap between the rich and the poor get bigger and let unrest grow, that only increases the need for more expensive military hardware that makes the military industrial complex more profitable.

    In our case, our President, who has risen from the poor working masses will work to uplift the poor and middle class in this country, that is our hope. After all, this is the Democratic Socialist Republic of Sri Lanka (DSRSL).

    First thing for the President is to get permission from the West, perhaps there is something we can trade that they want, like our sovereignty? Or our Unitary Status?

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