Capitalism is the answer

The lesson came from a wide variety of observations summarised best by Adam Smith's The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Both include the statement that the self-seeking rich are often "led by an invisible hand…without knowing it, without intending it, advance the interest of the society." Smith was saying that by solely pursuing their own self-interest - and not any conscious intention to be of help to others - and by trading with each other, they benefit their societies.

Marx and Engels were right when they observed in the Communist Manifesto that free markets had in a short time created greater prosperity and more technological innovation than all previous generations combined. A century and a half later, all evidence shows that capitalism has lifted millions and millions from hunger and poverty.

Today's story about global capitalism, shared by rightâ€wing and leftâ€wing populists, but also by large sections of the political and economic establishment, does not deny that prosperity has been created. But we need to ensure that we have a fair society, with those at the bottom able to earn a sufficient wage. Elton Musk has become the first person with more than $300 billion to his name. He is the richest person ever, according to Forbes. He takes the top spot from Amazon founder Jeff Bezos, who had held it since 2017. According to the World Bank, Musk's net worth exceeds the GDPs of Colombia, Finland, Pakistan, Chile and Portugal.

But the issue is not a question of how much more than the masses does the super-rich own. It is a question of income distribution or inequality. How is it shared among the masses? Income inequality is often unfairly distributed on the basis of sex or gender, race or colour and age. One of our prime objectives is to remove any of these barriers. One approach is to measure the

Gini coefficient representing the income inequality, the wealth inequality, or the consumption inequality within a nation or a social group. It was one of the measures often sought by this consultant when working in a country, but usually used only as background information. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income-and everyone else has no income. The level of income inequality in a given country can help indicate the quality of life for its average citizen. Income inequality impacts a nation both economically and politically, with effects that include political polarization, negative attitudes towards the wealthy, slower GDP growth, reduced income mobility, higher poverty rates, and greater household debt. On the other hand, income inequality that is extremely low can sometimes indicate a lack of economic growth.

Lorenz curve is a graphical representation of the distribution of income or of wealth developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. The opening sentence reads:

There may be wide difference of opinion as to the signiï¬cance of a very unequal distribution of wealth, but there can be no doubt as to the importance of knowing whether the present distribution is becoming more or less unequal.

President Obama said in his 2012 State of the Union address that the decades-long trend in inequality was "the defining issue of our time" undermining economic growth and social and political cohesion in the US.

The Centre for Ethics in the United States published its opinion September 25, 2020

Our nation's social fabric is torn by political polarization, distrust, disinformation, exclusion, coarsened public discourse, and divisions along geographic, cultural, and tribal lines. The precarity of that social fabric has been exacerbated by stagnating social mobility, widening socioeconomic inequality, and structural inequities, often along racial, ethnic, and gender lines.

Obama called for a rise in the federal minimum wage, something that neither chamber in Congress was likely to support, but otherwise offered no new policy prescriptions to address a problem that he said affected many developed countries.

He also tied redress income inequality to the success of his health law, which has struggled since its rollout in October.

Republicans opposed his call, and his health care plan, Obamacare - the Patient Protection and Affordable Care Act, which has been in limbo since 2010. In 2010, the top 5 percent of U.S. households received more than 24 percent of total after-tax income, while the lowest 20 percent received slightly more than 6 percent. Income inequality in the United States has been rising since 1979.

The impact of income inequality has largely been driven by a multitude of political choices. The embrace of neoliberalism since the 1980s has provided the key catalyst for political and policy changes in the realms of union regulation, executive pay, the welfare state and tax progressivity, which have been the key drivers of inequality. These preventable causes have led to demonstrable harmful outcomes that are not explicable solely by material deprivation. Inequality has been linked on the economic front with reduced growth, investment and innovation, and on the social front with reduced health and social mobility, and greater violent crime.

Ranking of countries Top five countries with the Lowest Gini Coefficients (%) by World Bank:

1. Norway Gini 22.70
2. Slovakia Gini 23.20
3. Slovenia Gini 24.00
4. Belarus 24.40
5. Ukraine 25.60

Australia was about 34; United States 39; South Africa was the highest at 63. The similarities in the Gini coefficient between the US and Australia raises some concerns. Are we headed down the same divisive path as the United States? Is the recent YES?NO referendum a signal? Is the massive emergence of the Teals a signal? Or the near national dislike of Scott Morrison? Is the near confrontational approaches of our two contending political parties a problem? This opinion writer does not know but suggests a less confrontational approach to our politics is a desirable answer. That the role of the party in opposition is not to oppose, but to work with the government to strengthen and improve. To oppose only if they can convince us that the government is wrong.

The General Social Survey (GSS) in the US is a survey administered to a nationally representative sample of about 1,500 respondents each year since 1972 and is an important source of information on long-run trends of self-reported life satisfaction in the country. As such, it is a key indicator of happiness in the US. For the first time, Americans who say they are "not too happy" outnumber those who say they're "very happy," according to a survey from the nonprofit group NORC at the University of Chicago. NORC is one of the largest independent social research organizations in the United States, established in 1941 as the National Opinion Research Center. The latest World Happiness Report finds that a separate measure of overall life satisfaction fell by 6% in the United States between 2007 and 2018.It places Australia and the US each about the same level but well behind the Scandinavian countries.

Australia is frequently called The Lucky Country. Fifty years ago, author Donald Horne described Australia as 'a lucky country run by second-rate people', adding that our leaders are mostly unaware of events around them. Is this still true? We have changed, but do we still need more? This opinion writer believes yes, mostly in strengthening the cooperation between our political parties, but will leave the answers to those who comment.