Why all these social ills? Look at our income inequality

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Pardon me for ignoring the Cabinet reshuffle. It’s just a few new ambitious faces replacing a few tired personalities. Some minor hoo-ha over Mukhriz edging past Khairy into the Cabinet. There’s even a Green Technology Minister – and perhaps with this ‘green’ theme in mind a discarded state chief minister has been recycled into a cabinet minister.

But in the larger scheme of things, the basic economic orientation of the country remains the same.

Over the last few years, we have seen a drastic rise in social ills – crime, drug addiction, depression…you name it.

What is behind all this? One possible reason is the alienation of the human being/workers as a result of the industrialisation process. Another possibility is the disillusionment and discontentment fuelled by relative poverty and marginalisation under the “trickle-down” economic approach.

Then comes a newbook, The Spirit Level, revealing that countries with greater income inequalities experience a lot more social sicknesses. This doesn’t only affect the poor in these unequal countries but also the more affluent, who suffer from stress and a fear of the poor. (Think of how more and more of the rich and wealthy are retreating behind gated communities or guarded condominium complexes or installing burglar alarms).  The poor on the other hand suffer from uncertainty over how to make ends meet and a sense of anxiety over their low social status.

Download an audio lecture by the authors here (mp3 format).

Such inequalities did not happen by accident. They are the direct result of pro-rich economic policies. In the UK, for instance, much of this inequality arose as a result of neo-liberal policies (privatisation, cuts in social spending, policies that favour the rich) during the Thatcher years and which have continued under New Labour.

Now look where Malaysia, which has one of the most unequal societies in this region, stands. Mahathir copied some of these same privatisation policies while emphasising heavy industrialisation.

In 2004, our own top fifth to bottom two-fifths ratio stood at 7.6. (Rogayah bt Hj Mat Zin, Income Inequality in Malaysia, in Asian Economic Policy Review, 3, 2008).

From this, we can conclude that our top fifth to bottom fifth ratio is more like 10. Have a look at the chart here (pdf format) and see where we would stand.

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Bigjoe

The core of the issue is the penchant for our govt to resort to easy solutions to difficult problems. Looking at it as anti-capitalism or anti-free market is not the way to look at it. The issue really is poor protection of private rights. There is absolutely no reason why we should have as high a migrant worker population as the US and other developed countries. Even in hawkers stalls and small businesses we use migrant workers when pro-migration Singapore don’t use them. There is no reason why the orang Asli has not been going to schools for decades and… Read more »

sabahan

inequality a simple term for we made the minority rich especially the politician and the minority made us poor.

whispering9

I have been fascinated by the fact that this earth could be governed by the level of constant resolving spirit within her, besides physical mass. This spiritual mass could be resolving along a S curve/median within a Yin-Yen sphere. More white than black, then all white. Which will turn all black and henceforth more black than white. Along the median, we also experience equal white and black before the whole thing revolve again. It could be the current human physiology which does not permit a constant flux of spiritual energy. I read in many articles that we fear perfection because… Read more »

flyer168

Dear Anil, After all that “Cliff-hanger” & Electic 2 weeks leading to the great Bye-elections results….. The 9th April 2009 results was an absolute “Anti-Climax”. Senior Advisor will in time “Induce” his Incoming Macais to complete his master Plan to have one son as Dy Minister & the other as the “Businessman & SENATOR”….so APs bisa diator…. He once said that Najib will need a bank to run UMNO….yes young brother has CIMB…. Well the time has come….soon his brother Nazir (could become) a “SENATOR/Banker”…. KJ & his Deputy Azeez (could) be “WELL COMPENSATED with this Nation’s & Rayaat’s Expense”… Read more »

Penangite

Yes. The govt of the day should raise the minimum income level to at least RM1500 (non monetary benefits should not be included) for all Malaysians. The poverty level in the country should also be raise in tandem with the adjusted minimum wage. why should the big plantation companies make billions at the expense of the plantation workers??? why should multinationals make millions at the expense of the production workers???? If the minimum wage mechanism is set in place, many malaysians will be willing to up jobs offered by plantations and manufacturers. Eventually outflow of ringgit to foreign countries will… Read more »

SamG

Very interesting topic. I have been retrenched and unemployed for 3 months now & there has been so much of talk about the rescue package and helping the retrenched. I have registered everywhere, and nothing has happened about the re-training or Supplementary Bill (Mini Budget) by Najib. The home loan defermment will just put me more into debts, and let alone about buying a new house or car to take any advantage of the Tax deductions offered. As Marie Antoinette said “If they don’t have bread, let them have cakes…” I have been knocking on the doors of every other… Read more »

caravanserai

The rich; the poor It is abundantly clear God wants His people to know Love thy neighbors To unburden the sins He doesn’t ask much Do what one can to help A little help carrying a salvation Yet we are so burdensome ourselves Dividing line of beauty and sorrow You can read many professional books Telling you many technical words fooling ourselves By right the book of religions the answer can be found If only we open our eyes recognize the symptoms We are home free Nay…we are infested with wealth and glory We have forgotten our mission in life… Read more »

anna brella

Using only common sense, I think you will know that all human social ills are ultimately caused by bad Government and bad society that really only worships LIES, WEALTH and STATUS as its GODS. Thatcher’s and Reagan’s trickle down monetary economics only caused wider income and social disparities in their societies because when responsible Government and its social justice viewpoint gets out of the way of the market-based forces of the capitalist system, what really trickles down from the top to the bottom is the top’s shite. It’s eminently logical that greedy and stupid human beings, who believe the capitalist… Read more »

Tshiung Han See

Hi Anil,

Check out psychologist Barry Schwartz’s The Paradox of Choice. He finds that the common belief that more choice is inherently good is false. He finds that we prefer to have some choice, not a vast array of it. As a result, a more equal distribution of income won’t only make poor people happier, but the rich happier too.

Here’s a talk he gave at TED (I’ve been glued to these videos lately)

http://www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html

Han

oneworldmaybenot

The problem is not disparity of income but more of our income has stayed stagnant through the years. Household debt to income is high compared to other Asian countries….why? not because Msians overleveraged but because income never grew over the years. Hence, our standard of living has fallen. I am not talking about tycoons, certain politicians or bangsar residents here but ever wondered why families are finding harder and harder to buy their first house? The economy is over protected and needs to be freed up although free market is a bad word now. Socialism is not the answer, it… Read more »

My2cen

Yes, all these petty thefts have a close relationship to the earning power. It’s still a class struggle at the end of the day – a struggle to make ends meet eclipsed by the agenda of the govt to bail out crony companies. The economic policy practised from Washington all the way to the East has failed the global citizens. Income disparity is a huge problem.

Phua Kai Lit

Hi Anil

Professor Richard G. Wilkinson argues that
more unequal societies (societies with greater income inequality)
experience (1) greater health differentials between the social classes as well as (2) poorer quality of social relations e.g.
his book “The Impact of Inequality: How to Make
Sick Societies Healthier”.

Note: it must also be said that his first assertion is disputed.