Political extremism is as high now in late 2018 as it was in the 1930’s. Extremism then contributed to the start of one of the worst conflicts the world has seen. Lately, Neoliberal social policy and commercial globalisation seem to produce great financial inequality. This manifests as extremism in countries with employment decimated in some industries. We see similar effects emerging in Italy, astern Europe and South American states. This article explores how globalisation and market forces contribute to extremism.
Pew Research Center perfectly Political Polarization in their study of Democrat and GOP voters. In the UK, the moderate Liberal Democrat party has lost two thirds of the voting intention since 2011. That’s down from 23% to 8%. This leaves UK politics more polarised as the Conservative right jostle for votes with the Labour left.
Policy has evolved from greyscale to monochrome. Outcomes being good or bad depend on whether you believe Trump is the liberator or Lucifer, whether Brexit is folly or fortuitous.
Globalisation seems to cause extremism as wealth reduces in large sections of society. Outsourcing call centres, knowledge workers and manufacturing all bear their share of responsibility. Productivity through technology such as PCs seems less disruptive. Perhaps since it’s distributed across wide areas of society. Consumers take for granted benefits of globalisation whilst negative factors often remain unaddressed.
Globalisation coincided with limiting tax liabilities by separating flows of goods and wealth . Globalised businesses often use tax-efficient schemes like the Double Irish Arrangement. Effective corporate tax rates (how much is actually collected) have fallen significantly, dropping from 34% to 24% since 2000. At the same time, personal taxation has risen since 2008 by around 6%. In OECD countries headline tax is rising again from a ‘low’ of 40% in 2008 to around 43% today.
Falling Tax Income
Falling corporate taxes reduces a major source of government income. Rising personal taxes transfers part of that burden onto workers. To cap or reduce expenditure governments introduced neoliberal market models with coercive commoditisation of welfare and financialisaton of social housing. Introduction of sanctions, fines and punishments threaten the least wealthy with even less wealth. Research by the London School of Economics has clearly shown how coercive commoditisation of welfare and sanctions are counterproductive.
Globalisation pressures tax income and encourages use of market forces and sanctions on the least wealthy. The seeming inability, or unwillingness, of legislators to conquer tax avoidance exacerbates injustice. Wealth extracted from a country by purchases from global industries pays low taxes. The taxes are not recycled to mitigate effects of globalisation in the country. It’s like not taxing tobacco would leave an unfunded healthcare burden. Instead of tobacco and health, it’s job losses as multinational businesses separate goods and wealth.
So remember the people disadvantaged by globalisation if you wonder what to say to canvassing politicians. Neoliberals have used market forces (“you’re only as valuable as your employability”) and sanctions (“fines for those with least money”) to turn the welfare safety net into a lasso.
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