Tag Archives: USA

Gini in a bottle

What does the United States share with El Salvador, Rwanda, Bolivia and Zimbabwe ? The answer is a high Gini Index. The Gini Index is a measure of overall equality in a country, and values are compiled by a number of organisations, including, for example, the CIA.

In a society, if wealth flows to a small section of the society and the majority have an increasingly eroding quality of life, there become a point in a democracy where change takes place. At some point, in most democracies, the “have nots” can outvote the “haves”, and move to reverse the imbalance, whether by progressive tax laws or other means. Not so in the USA, where one man’s vote in Wyoming is very different to one man’s vote in California.

The 2020 election has brought this into sharp focus, where the US Senate will spend the next 4 years thwarting the popular vote by preventing Biden from implementing policies the population gave him the mandate to effect.

The issues are well known, and there is no point in Grumpy repeating them here, other than to note that in California 40m+ residents get the same number of senators (2) as some 700,000 in Wyoming. This has the potential – as the “have not” numbers grow – that huge unrest will be created because a Republican manjority is not only baked in, but they increasing perpetuate that by gerrymandering the voting constituencies.

Globalisation has added to the strains by allowing large corporates to export not only the jobs of low level workers, but their profits. From 1978 to 2019, the average salaries of CEOs grew by 1000% compared with just 12% for the average worker in that period,

The barriers to reform are insurmountable in the current structure, which means that pressure for change will build in society without any democratic means for release. Critically, in the next 15-20 years, America will see unprecedented change, in that the world will see played out the inevitable battle for supremacy between China and the USA. In many ways, the odds are probably against America; China has more than 4 times as many people, and the luxury of being able to plan ahead with a consistent strategy by virtue of the lack of constant political change and democratic constraints.

Niall Ferguson authored a book (“Empire”) on the growth and decline of British Empire, and “Colossus” which argued that the USA was heir to that mantle whether it declared it or not. More tellingly, as the aftermath of the first Trump reign closes, Ferguson noted in a conclusion that the history of empires shows that most collapsed in a generation or less, but – as the American inequality Gini escapes from its bottle – that collapse came not from opposing blocks, but from within the empire itself.