“The inherent vice of capitalism is the unequal sharing of blessings; the inherent
virtue of socialism is the equal sharing of miseries.” ~ Sir Winston Churchill
The 2020 Edelman Trust Barometer — a worldwide survey now in its 20th year — shows that
societal institutions such as government, business, and media are simply not trusted
anymore in developed countries with the majority of people now distrustful of these institutions.
Essentially, a growing sense of inequality is undermining people’s trust.
If we look at the data, we can see that many developed countries have entered a state of
distrust.
Countries with a trust index of less than 50 are considered to be distrustful of their
institutions.
In 2020, these include Australia, the US, Germany, France, Ireland, Japan, and the UK,
just to name a few.
Russians are the most distrustful of their societal institutions.
People in China, India, and Indonesia are the most trustful of their institutions and
have all increased in the rankings since 2019.
It seems that as you turn away from democracy, the trust of the people go up.
The report shows that capitalism is increasingly under fire.
Only 18% of recipients say that the system is working for them (a decrease of two percentage
points since last year), with 48% of people saying that the system is failing them (an
increase of three percentage points).
All in all, 56% of people now say that capitalism, as it exists today, is doing more harm than
good in the world.
83% of people are worried about losing their jobs due a number of factors including the
gig economy, looming recessions, and the threat of automation.
66% of people do not have confidence in their leaders to successfully address their country’s
challenges.
Religious leaders come in as the third least trustful; Government leaders come in second;
and The very wealthy are considered to be the most distrusted in society with only 36%
of recipients trusting their ability to address social challenges.
57% of people fear that the media has been contaminated with untrustworthy information,
with 76% of people worried about false information and fake news being used as a weapon.
More than 60% of people are worried that technology is out of control, with 66% worried that it
will become impossible to know what they are seeing or hearing is real.
Income inequality is severely impacting people’s trust with high inequality linked to less
trust in government in both developed and developing markets.
More and more people are pessimistic about the future.
Only 32% of Australians believe that they and their families will be better off in five
years’ time (a fall of two percentage points since 2019).
The US is the least pessimistic of the bunch sitting at 43%.
However, Germany, France, and Japan are extremely pessimistic about their future with only 15%
of Japanese having a positive outlook.
It must be noted that the report found two different trust realities.
65% of the informed public (that is, people who are university-educated, and in the top
25% of household income) said they trust their institutions, whereas only 51% of the mass
population (everyone else) said the same.
In Australia, these results are even more extreme with 68% of the informed public saying
they are trusting of their institutions, but only 45% of the mass population can say the
same.
There are now a record eight markets showing all-time-high gaps between the two populations
— an alarming trust inequality.
None of this is very surprising.
Oxfam have recently released a report showing that although the number of Australian billionaires
has decreased, their collective wealth has increased.
The world’s richest 1% have more than twice as much wealth as 6.9 billion people.
In Australia, the divide isn’t as bad, but still pretty staggering.
The richest 1% (250,000 people) have more than double the wealth of 50% of our population
(12.5 million people).
They own about $2.3 trillion in wealth, which equates to about 22.2% of all of Australia’s
wealth.
The problem is, once people secure extreme wealth, their fortunes take on a momentum
of their own.
Over the last 10 years, the super rich have watched their wealth grow by an average of
7.4% per year.
Bill Gates, despite admirably committing to give away most of his money, is still worth
around US$110 billion, which is more than double what he had when he stepped down as
head of Microsoft.
Although he has already given away a lot of money, he has also gained a lot of money.
The net effect is that he isn’t really giving anything away.
He’s just sucking some money up from over here, keeping some of it, and then giving
some of it away to charitable causes.
The net effect is that he and his charities win, but a lot of people lose in the process.
He’s completely failing at giving away his wealth, although, I don’t think he sees
it like that.
Anyway, inequality is on the rise.
We can’t trust that the super-rich will voluntarily redistribute their wealth, because
even the most philanthropic of the elite are still getting rich.
The truth is, they can only get richer if a lot of people get poorer.
Why is this extreme inequality so bad?
According to Oxfam,
“With extreme wealth comes the power to influence the rules.
That means that we end up with government policies that favour the super-rich, regardless
of what would work best for the rest of us.
These policies increase poverty and create economic instability.
So extreme inequality isn’t just unfair — it’s downright dangerous.”
Who pays the price for inequality?
“All of us.
Right now, Australians are seeing the direct results of economic inequality.
Over the past decade the number of billionaires in Australia has tripled, while real wages
have stagnated.
The Australian Tax Office estimated that in 2016-17, large corporations avoided paying
$2 billion in taxes – the same amount as the entire National Bushfire Recovery Fund.
The Australian Government must ensure that multinational corporations are paying their
fair share of tax.
This would boost public funding to allow it to provide better services to all Australians
and better respond to disasters, both here and across the world.”
Inequality is hurting us.
So what are we going to do about it?
Let me know your thoughts below.