Greed is not good: social critic Stuart Sim on the indignities of neoliberal capitalism

“How much inequality are we willing to put up with?” Stuart Sim, author of Insatiable: The Rise and Rise of the Greedocracy, told me. “That is the question.”

According to a Pew Research Center study, income inequality in the United States is as high as it’s been since 1928, just before the Great Depression. The trendlines are similar in Europe.

Sim — a former literature professor at Northumbria University in England — sees this data as evidence that the West is teetering on a precipice. His book argues that we’ve allowed the profit motive to pervade every corner of society — from government to finance to health care to education. This is especially true of America, where he believes the politics of greed infects ... everything.

The villain in Sim’s story is neoliberalism, the prevailing economic ideology of our time. In the past three decades or so, he argues, policymakers have embraced four overlapping principles:

1. The government’s role in public services like health care and education should be diminished as much as possible.
2. Government regulations should be maximally eliminated.
3. Good and services should be privatized whenever possible.
4. Free enterprise should be completely liberated from regulatory bonds.

The promise of neoliberalism, Sim says, was that the market would deliver benefits for everyone. But instead, it has incentivized greed, glorified competition, and concentrated wealth in fewer and fewer hands.

When Sim is condemning the effects of neoliberal policies, his book resonates. In the end, though, he fails to deliver a satisfying solution. Most readers will agree that a society addicted to excess will, ultimately, collapse. The question is what to do about it.

Sim’s answer, such as it is, is that Western societies have to do a better job of restraining our greedy impulses, and citizens have to apply more political pressure to their respective governments. But it’s not entirely clear what that means, or why it will work. Whatever it means, it’s not the bold plan progressive activists are searching for.

Nevertheless, I reached out to Sim at his office in England two weeks ago. Given how short his book is on conclusions, I wanted to know what he thinks ought to be done. I also pressed him on a question he evades in the book: Do we need a moral and political revolution?

Our conversation, lightly edited for concision, follows.

Sean Illing

So what’s the “greedocracy”?

Stuart Sim

The title came from my editor, but it is something that's being mentioned all over the world. It's widely known that the very top end, the ones controlling the corporations and the tax havens, are endangering us all. This is true in Britain, where I live, and in America, where you live. Those in control of the world’s wealth have, in the last few decades, taken more and more for themselves and in so doing have destabilized the global economy and our collective political order.

Sean Illing

Can you offer specific examples backing up your claim that greed has run amok? I want to be clear about your thesis here.

Stuart Sim

Thomas Piketty's work (Capital in the Twenty-First Century) provides extensive statistical detail on the economic relationship between the top levels of Western societies, such as the US, and the lower levels. Whereas in the postwar years of the ’40s, ’50s, and ’60s the gap in wealth between those at the top and bottom had narrowed significantly from prewar, it has since the ’70s and ’80s sharply increased again. His research shows that the top decile's share of national income in the USA has risen from 30 to 35 percent in postwar years to 45 to 50 percent now. Salaries at the top end have soared, while those at the bottom have in real terms declined.

Neoliberalism has fought regulation of economic life very successfully, and this has been exploited by those in control of large corporations and multinationals, to increase profits. Globalization is good news for corporation profits, but bad news for the working population in general.

The pressure on governments to deregulate the financial sector and cut taxes (to encourage entrepreneurs we are invariably told), has led to large-scale cuts in welfare spending, which always affects those at the bottom end of the socioeconomic scale most. Bailing out the banking industry in 2007-’08 has led to austerity programs being implemented by most Western governments, and these hit the poor the hardest.

Sean Illing

You said a second ago that you think these policies have “destabilized” the political order. Can you draw a straight line between the greedocracy and the destructive political consequences?

Stuart Sim

The more that economic inequality has increased, the more the public has come to distrust the political class. One of the consequences of this has been the rise of populist politicians and political parties, claiming to represent those left behind by the system. Donald Trump ran on just such a platform, and various far-right parties in Europe have exploited this public discontent about falling wages and job opportunities as well: the Front National in France, for example, and nationalist parties in Germany and Hungary. Even if such parties don't come to power, they have helped to change the climate of public opinion, as when it comes to blaming immigrants for causing a nation's economic problems.

Globalization has reduced the job market in the West, and induced a feeling of powerlessness amongst the general public; immigrants have been turned into scapegoats for this situation, and many parties have made political capital out of this.

The Brexit vote in the UK effectively turned into a campaign about immigration, and the far right were very successful in exploiting this issue. Donald Trump has vowed to build a wall to keep Mexican migrants out of the USA, as well as threatening travel bans on Muslims. The wave of refugees from the Middle East — Syria, for example — that has swept across Europe in the last couple of years has seen political parties deliberately rousing prejudice against them, and in many cases preventing them from getting into Western Europe. The tabloid press in the UK has been almost hysterical in its opposition to immigrants, and that has not helped the general political climate of the country.

It is globalization that needs to be reformed, as well as neoliberal economic policy and the whole drive toward deregulation, not immigration. But it has to be conceded that the far right has been very successful in stoking up prejudice about immigration (outsiders in general), and this has had a very destabilizing effect on the Western political order. The Trump presidency and the Brexit mess in the UK constitute hard evidence that we are, as the old Chinese saying had it, living in interesting times.

Sean Illing

The subtitle of your book implies that this is something new, but isn’t this is a very old story — the rich growing richer, the poor poorer?

Stuart Sim

It's a bit different now. I tried to tie it in with neoliberal economic theory, which is been more or less the dominant theory for 30 years now. We’ve created a situation where more wealth flows to the top, and various things have happened at the bottom end of society relating to workers’ rights and the way employment contracts are being done, which means there is a definite shift in both power and money toward the top.

There's always been a class of people with more money than the rest, but there's something different that has happened since neoliberalism came in with the idea of completely unregulated economic markets, stock markets, etc. So I think what’s different now is the scale and scope of the machinery behind the inequalities.

Sean Illing

Can you elaborate here? What sorts of things have happened at the bottom end of society in terms of workers’ rights and employment contracts? I think people generally understand what’s happened on the inequality front, but I’m not sure that’s true of workers’ rights.

Stuart Sim

Salaries at the higher management level have soared out of all proportion in the last few decades, reinforced by a bonus system which has become a source of considerable political controversy. Even in the aftermath of the banking crisis, with the industry having to be rescued by the public purse (in the UK, large-scale institutions such as the Royal Bank of Scotland and Northern Rock, for example), the bonus system has gone on regardless. It seems at times as if failure is being rewarded as much as success.

The use of tax havens by corporations — and indeed, high-earning individuals in other walks of life, such as the arts, and sport — has increased the wealth of those able to take advantage of this system, and many international organizations pay little or no tax at all in the countries they trade in. Both Starbucks and Facebook have been guilty of evading tax this way in Europe, and although the UK government has made some efforts to ensure that they do contribute something to the country's tax revenues, the bulk of their income still flows out of the country — a process that has been dubbed “profit shifting.”

In the job market, meanwhile, there has been a marked shift toward zero-hours contracts, which do not even guarantee a regular weekly wage, as hours cannot be predicted from week to week; employees find themselves at the beck and call of the companies. Many of those on such contracts are considered to be self-employed, meaning that they have no access to holiday pay, or sickness benefit, from the companies they work for. Or they may be hired by companies from agencies, which again means that the companies are not liable for holiday or sick pay (and neither are the agencies, of course).

Sean Illing

You've mentioned neoliberalism a couple of times now, so let's linger on that. We have this system of capitalism, which precedes neoliberalism, and that system is predicated on greed and self-interest as reliable guides to human behavior. What is it about neoliberalism in particular that you think has amplified this instinct?

Stuart Sim

Well, it’s less about human nature and more about this neoliberal idea that markets should be less and less regulated. What neoliberal theorists from Milton Friedman onward have done is to campaign fairly exhaustively for monitoring of stock markets and economic markets to be reduced. In fact, they would prefer if there were no regulations at all. That, to me, means a willingness to unleash and amplify greed without limits or constraints.

Sean Illing

Who gave us neoliberalism? Where did it come from? What are the forces and institutions behind it?

Stuart Sim

It was a body of ideas promulgated by influential economists like Milton Friedman that argued in favor of a less regulated and essentially fully privatized system. These ideas caught the attention of government leaders like Margaret Thatcher and Ronald Reagan, both of whom tried to put these plans into force. What was being said by people like Friedman, and the right in general, was that this would lead to greater wealth across all of society. That just has not happened, so their bluff has been called on that.

In many ways, they were reverting to a previous kind of capitalism. The kind of 19th-century capitalism that Karl Marx was arguing against, which is a form of laissez-faire capitalism. This is what neoliberalism and neoliberals wanted to reintroduce. But the wealth this has created has gone increasingly to those at the top, and this is not what was promised.

What we’ve got, instead, is more greed and globalism and wealth concentration.

Sean Illing

Can you give me an example or a particularly egregious stat, something that illustrates your point about greed?

Stuart Sim

Well, consider this: The world’s eight richest people are now as wealthy as half the global population. Is that not clear enough?

Sean Illing

Oh, it’s clear, but what’s less clear is what to do about it. We live in exactly the kind of world you’d expect greedy, self-interested creatures to produce.

Stuart Sim

What I was trying to argue in the book is that you will never get rid of that side of human nature completely, but you do need to keep it in check, and until quite recently, for most of the 20th century let's say, particularly since the Second World War, that notion of keeping the worst aspects of greed in check has been followed by most Western governments. But the global rise and adoption of neoliberalism in the ’70s has upended that.

Sean Illing

I suspect a lot of people will nod affirmatively when you say that we should check human greed, but they’ve no idea that actually means or how it would work in practice.

Stuart Sim

Avarice has always been with us, and the creative arts have been fascinated by it down the years (Charles Dickens's Scrooge, for instance), but there are several practical examples of what governments can do to rein in the greed impulse. Tax havens could be abolished if there was the international will to do so — difficult, I agree, but possible all the same. They exist only because they are allowed to, and because most governments turn a blind eye toward them.

In the interest of financial transparency, Gabriel Zucman has called for a “global financial register” to be set up, to determine who owns financial holdings, investments, stocks, etc., anywhere in the world, so that there is no longer any “hidden wealth.” At least in theory, then, governments could start retrieving taxes from those avoiding them in their country of origin. Tax increases for those at the top end could at least ensure that wealth there did not spiral out of control. Governments need to make it clear that tax is necessary for the running of a civil society.

The notion that the state is at best a necessary evil, which must be kept to a minimum, and that tax is stealing from the individual has to be countered by strong messages that without tax revenue, nation-states cannot function properly for the benefit of all their citizens. After all, how much money do wealthy individuals like Bill Gates actually need?

Greediness can and should be restrained, but the combination of neoliberal economic theory, deregulation, and globalization has actively encouraged it. Governments ought instead to be arguing for a greater sense of responsibility, and pointing out that without “fiscal consent” (as economists describe it), societies become sharply divided between haves and have-nots, which carries the threat of social unrest.

Sean Illing

I worry that there just isn’t much we can do, that we live in a system that allows for material inequalities and material inequalities translate to political inequalities, as people with resources and influence are better able to manipulate the system in their favor.

Of course we need more and better regulations, but our system is designed, for better or worse, to produce the inequalities against which you’re protesting.

Stuart Sim

No question. That’s a scary reality of our system. People with a lot of money have more political power, and they wield it irresponsibly. But we can only do what a democratic system will allow us to do, which is to start pushing harder for regulations and laws that check reckless, greedy overreaches.

Ultimately, we have to work through the system we have, but it would be pretty depressing to think there's absolutely nothing that can be done about those with lots of money rigging the political system to their favor.

Sean Illing

I certainly don’t think there’s nothing we can do, but I do think we’re condemned, under the current system, to live with more inequalities than a lot of us would prefer.

Stuart Sim

Some periods are worse than others, but we seem to be in a pretty bad place at the minute. Between Trump and Brexit, something has gone drastically wrong in terms of how money and power is used in politics. But we have to work to improve things. What other choice do we have?

Sean Illing

You don’t go this far in the book, so I’ll ask you: Do you think we need a total paradigm change? And by “paradigm change,” I mean something like a revolution that results in a different political and economic order, be it socialism or some kind of non-market-based system.

Stuart Sim

Well, that’s a big question, which sets up the dispute between the left and the right. I’d rather have a more socialist kind of society, as we did in various periods of the 20th century in Britain. But there’s no final answer here. There is no perfectly good or just society, and there will always be excesses.

So no, I’m not expecting any grand paradigm changes, but I think we have to fight for a better version of present society. We are in a system right now which is more unequal than it was, in economic and political and social terms, even just 20 or 30 years ago. So there has already been a paradigm shift toward the right. I’m not proposing a communist takeover, but we don’t have to accept the status quo either.

Sean Illing

Is capitalism the least worst economic system insofar as it harnesses our baser instincts into something ultimately constructive? I mean, you’ve already admitted that greed and self-interest are facts of human nature, so why not have a system that relies on those impulses?

Stuart Sim

I think I could agree with that, though the socialist part of me that doesn't want to agree with that at all. But yes, you might say that capitalism is the least worst. Still, even capitalism requires a strong government, and it’s clear, given what’s happened in the last couple of generations, that the trend toward less and less government has not helped most of society.

The question now is how much inequality are we willing to put up with?

Photo by Jack Taylor/Getty Images

Sean Illing

I guess that’s really the question. Do you see Trump and Brexit and some of these right-wing populist movements across the world as a direct response to the growing inequalities?

Stuart Sim

I’m not sure. A populist boom is likely to occur in any country that permits large-scale social inequalities, and there’s plenty of examples in history to affirm that, particularly in the 20th century.

Sean Illing

You say near the end of the book we've reached a kind of crossroads. Do you really believe that? Are you expecting a pendulum swing to the left?

Stuart Sim

Well, I hope so. Looking at a country which is still trying to work out how to exist after Brexit, I sometimes wonder if there has been enough of a shift that way. A lot of countries and a lot of electorate are doing irrational things right now, and it's because of a worldwide topple economically. We're still living with the austerity measures a decade after a supposed one-off economic crisis. I was hopeful it was about to shift.

Here’s what I know: Society is capable of becoming far worse than it is right now. Let’s hope things shift in the right direction.

Ultimately, pressure has to come from below — it has to come from ordinary people who have had enough.

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