Capitalism gone mad


Thursday, February 07, 2019

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Back in the 1980s, when the contest between capitalism and socialism was its hottest, Trinidadian calypsonian Francisco Slinger, better known as the Mighty Sparrow, penned and put to song these memorable lyrics:

“You got to be a millionaire, or some kind of petit-bourgeoisie, any time you living here in this country.

You got to be in skulduggery, making your money illicitly to live in this country.

To provide for your family on your present salary is an impossibility in this country.

So many bills to pay, there is no conceivable way to save for a rainy day in this country.

Big business making everybody feel the Government give them a licence to steal.

It's sad, things getting more bad, Oh, Lord, capitalism gone mad.”

Forty years later the tune may have changed, but the words are almost the same. In his bestselling book, Capitalism at the Crossroads, author Stuart Hart describes the pitfalls of an economic philosophy and a system, which, although successful in creating wealth, has widened the gap between rich and poor.

At the November 2018 Conference in Los Angeles, hedge fund billionaire Ray Dalio, with over US$18 billion to his name, made this stunning admission: “Capitalism is not working for the majority of people. That's just the reality.”

The three richest people in the US – Bill Gates, Jeff Bezos and Warren Buffet – with a combined wealth of US$248.5 billion, own as much wealth as the bottom half of the population or 160 million people. On a world scale, according to the Wealth-X Billionaire Census, in 2018 there were 2,754 billionaires with a combined wealth of US$9.2 trillion — more than the combined wealth of the bottom 80 per cent of the world's population.

The debate about which is better, capitalism or socialism, was settled with the break-up of the Soviet Union and end of the cold war. Today, the two bastions of communism, China and Russia, rank No 2 and No 6, respectively, on the list of countries with the most billionaires. Capitalism is the runaway winner in its capacity to produce wealth, but it continues to be dogged by the twin demons of inequity and lack of inclusiveness.

How to produce economic growth measured by gross domestic product (GDP), and at the same time improve a country's performance on newer metrics such as the genuine progress indicator (GPI), which factor into the equation social costs such as rising poverty and the cost of damage to the environment, was a major topic of discussion at the just-concluded World Economic Forum attended by the world's richest countries and individuals in Davos, Switzerland. At last the world is coming to the realisation that with balancing the books it is important to balance lives to give everybody a chance at gaining a piece of the pie.

The tourism industry is the case-book example of the need for balance between wealth creation and wealth distribution. In his opening address at the Government of Jamaica/United Nations World Tourism Organization Second Conference on Jobs and Inclusive Growth held last week at the Montego Bay Conference Centre, Jamaica's Minister of Tourism Edmund Bartlett stated that at least 80 per cent of world tourism was made up of small and medium enterprises, but approximately 80 per cent of the revenue goes to the 20 per cent who are the big investors and operators. Many speakers after him expressed this disconcerting fact.

At the inaugural conference, two years ago, Taleb Rifai, the then secretary general of the United Nations World Tourism Organization, said all-inclusive hotels should do more to facilitate the spread of tourism earnings outside the walls of their own properties. At the time some took this as a slap in the face of the all-inclusive tourism product and insensitivity to the role that this had played in keeping tourism alive in a country like Jamaica when the environment was threatening to visitors and getting bad international press.

From the floor of the conference, I took Rifai back to his comments two years earlier. He was adamant and fulsome in his assertion that having successfully increased tourism revenue those entities that are in a position to do so should turn their attention to ensuring communities, as well as small and medium-sized entities enjoy the fruits of running successful tourism businesses. I shared the example of Island Routes Caribbean Adventures, the tour and destination management arm of Sandals Resorts International, which works with community-based operators such as JaMIN Tours in Trench Town to build capacity and to meet the very high standards of the demanding global tourism industry. This could serve as a model to be emulated by other players in the industry.

In June 2013 Cabinet approved the establishment of the Tourism Linkages Network to enhance the value chain between producers of, say, agricultural produce and consumers in the tourism industry. In keeping with its commitments as a signatory to the United Nations Sustainable Development Goals — especially goals 4, 8, 9, 11 and 16 — the Government of Jamaica, in March 2017, launched the National Financial Inclusion Strategy. These are commendable efforts that, over time, could correct the imbalance that is at the root of economic stagnation, social decomposition and environmental degradation.

Jamaica is near the bottom when it comes to inequity and lack of inclusiveness because of the trickle-down approach to managing the economy. If there is a consensus coming out of the Montego Bay conference it is that sustainable tourism can only exist where community is involved. The same is true for sustainable economic growth.

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