The Gap between the Rich and the Poor Widens
It is inevitable that in any society you will have rich and poor people. This is the order of humanity. However in the Capitalist system which is the current economic system the wide gap between the poor and the rich is artificial’ .The fact of the matter being the system is meant to benefit the handful elites and the common man. The standard newspaper on 17th January 2017 printed on its front page the Oxfam’s finding which found out that the 8 richest people in the world own in equivalent of wealth to 3.6billion people. This means the eight people own the wealth of half of the worlds’ population.
With all the advancement in technology and “CIVILIZED” policies, the gap widens day by day. After the world war 2, the united states of America had the most gold and backed its dollar by gold, meaning that every currency note represented a worthiness in gold of the same value and this in turn made most of the other countries backing their currencies with the American dollar making it(America) economically superior than most countries. In 1968 after engaging in cold war, the American government used most of its gold and so was forced to print fiat money (money that is not backed by gold) that was pushed from $900 billion to $3.5 trillion of money in circulation in a span of 2 years. This is turn made the central banks of the governments that backed their currency with the American dollar to also print fiat money in order to buy more dollars. The government was forced to take charge of the economy and new policies and theories came to pass.
Kenya being one of the countries that backed its currency with the American dollar was not left behind and the policies and economic theories made by few powerful people to enhance their riches also affected our economy. These are some of the theories that are used to in economy
- Scarcity of the resources: – The basic of economy in the whole world today is scarcity. This suggests that human needs are repetitive and so all the resources in the entire world cannot satisfy his needs. In this regard the capitalist claim in order to satisfy the unlimited needs a production must be tackled. But this is not true because the reality that should be dealt with is the distribution of the wealth. Kenya for example has vast resources which are not distributed to the ordinary man thus making the gap always very between the poor and the rich. Minerals like limonite, that is mined by a private company called base titanium was able to extract 3million tones of limonite between September and December and with the prices being Ksh.14,000 per tonne, they were able to make ksh 42 billion in three months. This means that such mineral could earn this country ksh 168billion in a year. According to data published by Africa oil, an independent assessment undertaken by Gaffney cline in 2014 estimated just over 600 million barrels of probable (2C) contingent resource that could worth billions of USD. More oil has still been found since that time. Talk about magadi in Magadi, fluorspar in kerio valley, niobium, lead and silver in Kwale, the blue economy, agriculture and many more that has the capability of bringing more revenue that we can spend for years without any external borrowing. So this theory was put in place so that all this resources will be controlled by few corporates and rich few individuals as it stands now and starves the rest to poverty and stress.
- Trickle down economy :-This theory suggest that by lowering the taxes for the very rich people then they will in turn employ more people and so transform the economy of a region. This theory only made it easy for the corporates to earn more profits by paying very small or no taxes at all while the common man bears all the burden of taxes that bring him back to square one every time he tries to grow.
These and many more theories are influenced by corporates and financial elites who use them to run the economy. The unemployment rate has risen to 60% among the youth and the employment benefits to the 40% that have been employed have shriveled. The portion of workers with any pension scheme connected to their job has fallen. More than 10,000 workers were last year retrenched by over 20 companies e.g. Kenya airways(118), standard charted bank(300), equity bank(400), sidian bank(108), family bank(100), first community bank(100), nice bank(100), Telkom(500) farm karuturi(2,600), Kenya meat commission(118),airtel(80), samir Africa(600), Portland cement (1000), uchumi(253), Kenya fluorspar(700)and more expected.
The shilling has fallen a little bit compared to the dollar and the millers have already sent a warning that the acute shortage of the cereal will force an increase in market price that willbe passed at to the consumer at the shop and the prices may go up for a longer period of time.Despite all this,the GDP of Kenya grew to 6.2 in the second quarter of 2016 and then rose to a new height symbolizing good economic trends and World Bank ranked Kenya the third most improved country in the world in ease of doing business as it moved to number 21 among 100 countries with good business environment. This clearly shows the contrast between the economic theories and the reality of the pinching lifestyle of the ordinary person.
The few rich people have succeeded in accumulating vast some of wealth and later turn the ordinary people into debtors and consumers. They lend them so that they can buy some basic commodity that they manufacture and later work for them to pay for the loans that they have given them. The way out to this problem is going back to the gold standard as a backing to paper currency and change the system (CAPITALISM) under which theseunrealistic economic principles and theories are formulated to only pave way for a bigger gap between the rich and the poor.
Bakari Mohamed Dziphengo – Member of the Media Office
Hizb ut-Tahrir Kenya
From UQAB Magazine Issue 1