By Roberto Savio
ROME, Jan 27 2016 (IPS)

The rich and the powerful, who meet every year at the World Economic Forum (WEF), were in a gloomy mood this time. Not only because the day they met close to eight trillion dollars has been wiped off global equity markets by a “correction”. But because no leader could be in a buoyant mood.

Roberto Savio

German Chancellor Angela Merkel is losing ground because of the way she handled the refugee crisis. French President Francois Hollande is facing decline in the polls that are favoring Marine Le Pen. Spanish president Mariano Rajoy practically lost the elections. Italian President Matteo Renzi is facing a very serious crisis in the Italian banking system, which could shatter the third economy of Europe. And the leaders from China, Brazil, India, Nigeria and other economies from the emerging countries (as they are called in economic jargon), are all going through a serious economic slowdown, which is affecting also the economies of the North. The absence of the presidents of Brazil and China was a telling sign.

However the last Davos (20-23 January) will remain in the history of the WEF, as the best example of the growing disconnection between the elites and the citizens. The theme of the Forum was “how to master the fourth revolution,” a thesis that Klaus Schwab the founder and CEO of Davos exposed in a book published few weeks before. The theory is that we are now facing a fusion of all technologies, that will completely change the system of production and work.

The First Industrial Revolution was to replace, at beginning of the 19th century, human power with machines. Then at the end of that century came the Second Industrial Revolution, which was to combine science with industry, with a total change of the system of production. Then came the era of computers, at the middle of last century, making the Third Industrial Revolution, the digital one. And now, according Schwab, we are entering the fourth revolution, where workers will be substituted by robots and mechanization.

The Swiss Bank UBS released in the conference a study in which it reports that the Fourth Revolution will “benefit those holding more.” In other words, the rich will become richer…it is important for the uninitiated to know that the money that goes to the superrich, is not printed for them. In other words, it is money that is sucked from the pockets of people.

Davos created two notable reactions: the first came with the creation of the World Social Forum (WSF), in 1991, where 40,000 social activists convened to denounce as illegitimate the gathering of the rich and powerful in Davos. They said it gave the elite a platform for decision making, without anything being mandated by citizens, and directed mainly to interests of the rich.

The WSF declared that “another world is possible,” in opposition to the Washington Consensus, formulated by the International Monetary Fund (IMF), the World Bank, and the Treasury of the United States. The consensus declared that since capitalism triumphed over Communism, the path to follow was to dismantle the state as much as possible, privatize, slash social costs which are by definition unproductive, and eliminate any barrier to the free markets. The problem was that, to avoid political contagion, the WSF established rules which reduced the Forums to internal debating and sharing among the participants, without the ability to act on the political institutions. In 2001, Davos did consider Porto Alegre a dangerous alternative; soon it went out of its radar.

At the last Davos, the WSF was not any point of reference. But it was the other actor, the international aid organization Oxfam, which has been presenting at every WEF a report on Global Wealth.

Those reports have been documenting how fast the concentration of wealth at an obscene level is creating a world of inequality not known since the First Industrial Revolution. In 2010, 388 individuals owned the same wealth as 3.6 billion people, half of humankind. In 2014, just 80 people owned as much as 3.8 billion people. And in 2015, the number came down to 62 individuals. And the concentration of wealth is accelerating. In its report of 2015, Oxfam predicted that the wealth of the top 1 per cent would overtake the rest of the population by 2016: in fact, that was reached within ten months. Twenty years ago, the superrich 1 per cent had the equivalent of 62 per cent of the world population.

It would have been logical to expect that those who run the world, looking at the unprecedented phenomena of a fast growing inequality, would have connected Oxfam report with that of UBS, and consider the new and immense challenge that the present economic and political system is facing. Also because the Fourth Revolution foresees the phasing out of workers from whatever function can be taken by machines. According to Schwab, the use of robots in production will go from the present 12 per cent to 55 per cent in 2050. This will cause obviously a dramatic unemployment, in a society where the social safety net is already in a steep decline.

Instead, the WEF largely ignored the issue of inequality, echoing the present level of lack of interest in the political institutions. We are well ahead in the American presidential campaign, and if it were not for one candidate, Bernie Sanders, the issue would have been ignored or sidestepped by the other 14 candidates. There is no reference to inequality in the European political debate either, apart from ritual declarations: refugees are now a much more pressing issue. It is a sign of the times that the financial institutions, like IMF and the World Bank, are way ahead of political institutions, releasing a number of studies on how inequality is a drag on economic development, and how its social impact has a very negative impact on the central issue of democracy and participation. The United Nations has done of inequality a central issue. Alicia Barcena, the Executive secretary of CEPAL, the Regional Center for Latin America, has also published in time for Davos a very worrying report on the stagnation in which the region is entering, and indicating the issue of inequality as an urgent problem.

But beside inequality, also the very central issue of climate change was largely ignored. All this despite the participants in the Paris Conference on Climate, recognized that the engagements taken by all countries will bring down the temperature of no more than 3.7 degrees, when a safe target would be 1.5 degrees. In spite of this very dangerous failure, the leaders in Paris gave lot of hopeful declarations, stating that the solution will come from the technological development, driven by the markets. It would have been logical to think, that in a large gathering of technological titans, with political leaders, the issue of climate change would have been a clear priority.

So, let us agree on the lesson from Davos. The rich and powerful had all the necessary data for focusing on existential issues for the planet and its inhabitants. Yet they failed to do so. This is a powerful example of the disconnection between the concern of citizens and their elite. The political and financial system is more and more self reverent: but is also fast losing legitimacy in the eyes of many people. Alternative candidates like Donald Trump or Matteo Salvini in Italy, or governments like those of Hungary and Poland, would have never been possible without a massive discontent. What is increasingly at stage is democracy itself? Are we entering in a Weimar stage of the world?

(End)

Excerpt:

By Pablo Piacentini
ROME, Sep 22 2014 (IPS)

The idea of creating Inter Press Service (IPS) arose in the early 1960s in response to awareness that a vacuum existed in the world of journalism, which had two basic aspects.

Firstly, there was a marked imbalance in international information sources. World news production was concentrated in the largest industrialised countries and dominated by a few powerful agencies and syndicates in the global North.

By contrast, there was a lack of information about developing countries in the South and elsewhere; there was hardly any information about their political, economic and social realities, except when natural disasters occurred, and what little was reported was culturally prejudiced against these countries. In other words, not much of an image and a poor image at that.A journalist specialised in development issues must be able to look at and analyse information and reality from the “other side.” In spite of globalisation and the revolution in communications, this “other side” continues to be unknown and disregarded, and occupies a marginal position in the international information universe

Secondly, there was an overall shortage of analysis and explanation of the processes behind news events and a lack of in-depth journalistic genres such as features, opinion articles and investigative journalism among the agencies.

Agencies published mainly ‘spot’ news, that is, brief pieces with the bare news facts and little background. Clearly this type of journalism did not lend itself to covering development-related issues.

When reporting an epidemic or a catastrophe in a Third World country, spot news items merely describe the facts and disseminate broadcast striking images. What they generally do not do is make an effort to answer questions such as why diseases that have disappeared or are well under control in the North should cause such terrible regional pandemics in less developed countries, or why a major earthquake in Los Angeles or Japan should cause much less damage and fewer deaths than a smaller earthquake in Haiti.

Superficiality and bias still predominate in international journalism.

While it is true that contextualised analytical information started to appear in the op-ed (“opposite the editorial page”) section of Anglo-Saxon newspapers, the analysis and commentary they offered concentrated on the countries of the North and their interests.

Today the number of op-eds that appear is much greater than in the 1960s, but the predominant focus continues to be on the North.

This type of top-down, North-centred journalism served the interests of industrialised countries, prolonging and extending their global domination and the subordination of non-industrialised countries that export commodities with little or no added value.

This unequal structure of global information affected developing countries negatively. For example, because of the image created by scanty and distorted information, it was unlikely that the owners of expanding businesses in a Northern country would decide to set up a factory in a country of the South.

After all, they knew little or nothing about these countries and, given the type of reporting about them that they were accustomed to, assumed that they were uncivilised and dangerous, with unreliable judicial systems, lack of infrastructure, and so on.

Obviously, few took the risk, and investments were most frequently North-North, reinforcing development in developed countries and underdevelopment in underdeveloped countries.

Pablo Piacentini

In the 1960s, those of us who created IPS set ourselves the goal of working to correct the biased, unequal and distorted image of the world projected by international agencies in those days.

Political geography and economics were certainly quite different then. Countries like Brazil, which is now an emerging power, used to be offhandedly dismissed with the quip: “It’s the country of the future – and always will be.”

At the time, decolonisation was under way in Africa, Asia and the Caribbean. Latin America was politically independent but economically dependent. The Non-Aligned Movement was created in 1961.

IPS never set out to present a “positive” image of the countries of the South by glossing over or turning a blind eye to the very real problems, such as corruption. Instead, we wished to present an objective view, integrating information about the South, its viewpoints and interests, into the global information media.

This implied a different approach to looking at the world and doing journalism. It meant looking at it from the viewpoint of the realities of the South and its social and economic problems.

Let me give an example which has a direct link to development.

The media tend to dwell on what they present as the negative consequences of commodity price rises: they cause inflation, are costly for consumers and their families, and distort the world economy. Clearly, this is the viewpoint of the industrialised countries that import cheap raw materials and transform them into manufactured goods as the basis for expanding their businesses and competing in the global marketplace.

It is true that steep and sudden price increases for some commodities can create problems in the international economy, as well as affect the population of some poor countries that have to import these raw materials.

But generalised and constant complaints about commodities price increases fail to take into account the statistically proven secular trend towards a decline in commodity prices (with the exception of oil since 1973) compared with those of manufactured goods.

IPS’s editorial policy is to provide news and analyses that show how, in the absence of fair prices and proper remuneration for their commodities, and unless more value is added to agricultural and mineral products, poor countries reliant on commodity exports cannot overcome underdevelopment and poverty.

Many communications researchers have recognised IPS’s contribution to developing a more analytical and appropriate journalism for focusing on and understanding economic, social and political processes, as well as contributing to greater knowledge of the problems faced by countries of the South.

Journalists addressing development issues need, in the first place, to undertake critical analysis of the content of news circulating in the information arena.

Then they must analyse economic and social issues from the “other point of view”, that of marginalised and oppressed people, and of poor countries unable to lift themselves out of underdevelopment because of unfavourable terms of trade, agricultural protectionism, and so on.

They must understand how and why some emerging countries are succeeding in overcoming underdevelopment, and what role can be played by international cooperation.

They also need to examine whether the countries of the North and the international institutions they control are imposing conditions on bilateral or multilateral agreements that actually perpetuate unequal development.

World economic geography and politics may have changed greatly since the 1960s, and new information technologies may have revolutionised the media of today, but these remain some important areas in which imbalanced and discriminatory news treatment is evident.

In conclusion, a journalist specialised in development issues must be able to look at and analyse information and reality from the “other side.” In spite of globalisation and the revolution in communications, this “other side” continues to be unknown and disregarded, and occupies a marginal position in the international information universe.

An appreciation of the true dimensions of the above issues, the contrast between them and the information and analysis we are fed daily by the predominant media virtually all over the world – not only in the North, but also many by media in the South – leads to the obvious conclusion that there is a crying need for unbiased global journalism to help correct North-South imbalance.

To this arduous task and still far-off goal, IPS has devoted its wholehearted efforts over the past half century.

(Edited by Phil Harris)

Excerpt:

India’s decisive stand last week not to adopt the protocol of amendment of the trade facilitation agreement (TFA) unless credible rules were in place for the development issues of the South was met with  “astonishment” and “dismay” by trade diplomats from the North, who described New Delhi’s as “hostage-taking” and “suicidal”. 

It obviously came as something of a shock for representatives of Northern interests that any party should have the brass neck to place the interests of its constituents on the negotiating table.

After all, why should such banal issues as food security and poverty get in the way of a trade agenda heavily weighted in favour of the industrialised countries?New Delhi was demanding nothing more than credible global trade rules to ensure that “development,” including the challenges of poverty, in the countries of the South take precedence over the cut-throat mercantile business interests of the transnational corporations in the North

In fact, it was India’s firm stand for permanent guarantees for public stockholding programmes for food security that turned this trade agenda upside down at the World Trade Organization (WTO) last week, putting paid to the adoption of the protocol of amendment for implementation of the contested TFA for the time being.

India and the United States failed Thursday at the WTO to reach agreement on construction of a legally binding decision on a “permanent peace clause” that would further strengthen what was decided for public distribution programmes for food security in developing countries at the ninth ministerial meeting in Bali, Indonesia, last year.

The Bali decision on food security was one of the nine non-binding best endeavour outcomes agreed by trade ministers on agriculture and development.

For industrialised and leading economic tigers in the developing world, the TFA – which would harmonise customs procedures in the developing world on a par with the industrialised countries – is a major mechanism for market access into the developing and poorest countries.

The failure to reach agreement came during a closed-door meeting between India and the United States organised by WTO Director-General Roberto Azevedo in an attempt to break the impasse between the world’s two largest democracies.

New Delhi was demanding nothing more than credible global trade rules to ensure that “development,” including the challenges of poverty, in the countries of the South take precedence over the cut-throat mercantile business interests of the transnational corporations in the North.

Trade diplomats from several developing and poorest countries in Africa, South America, and Asia say India’s “uncompromising” stance will force countries of the North to return to the negotiating table to address the neglected issues in the Bali package concerning agriculture and development.

These issues are at the heart of unfinished business in the Doha Development Agenda (DDA) negotiations, the current round of trade negotiations aimed at further liberalising trade.

“It is important to keep the battle alive and India has ensured that the big boys cannot simply walk away with the trade facilitation agreement (TFA) without addressing the concerns on food security and other major issues,” one African official said.

The industrialised countries and some rising economic tigers in the developing world are unhappy that they cannot now take home the TFA without addressing the problem raised by India and other developmental issues in the Doha Development Agenda negotiations.

Many developing and poor countries in Africa and elsewhere were opposed to the TFA but they were “arm-twisted” and “muzzled” by the leading super powers over the last three months. African countries, for example, were forced to change their stand after pressure from the United States, the European Union and other countries.

The TFA was sold on false promises that it would add anywhere up 1 trillion dollars to the world economy. During the Bali meeting last year, the Economist of London, for example, gave two different estimates – 64 billion dollars and 400 billion dollars – as gains from the TFA, while the International Chamber of Commerce gave an astronomical figure of 1 trillion dollars without any rational basis.

“Those predicted gains [from TFA] evaporate when one looks at the assumptions behind them, such as the assumption that all countries in the world would gain the same amount of income from a given increase in exports,” said Timothy A. Wise and Jeronim Capaldo, two academics from the Global Environment and Development Institute at the U.S. Tufts University.

At one go, the TFA will provide market access for companies such as Apple, General Electric, Caterpillar, UPS, Pfizer, Samsung, Sony, Ericsson, e-Bay, Hyundai, Huawei and Lenova to multiply their exports to the poorest countries.

It would drive away scarce resources for addressing bread-and-butter issues in the poor countries and direct them towards creating costly trade-related infrastructure for the sake of exporters in the industrialised world.

Here are ten reasons why trade diplomats from the developing and poorest countries say India’s stand will bolster their development agenda:

1.  India’s stand on food security brings agriculture, particularly unfinished business in the DDA negotiations, back to centre-stage.

2.  The Doha trade negotiations were to have been concluded by 2005 but remain stalled because a major industrialised country put too many spanners in the negotiating wheel.

3.  Major industrialised countries have been cherry-picking issues from the DDA which are of interest to them while giving short shrift to core “developmental” issues.

4.  Issues agreed in the Doha negotiations, such as the ”July package” agreed on August 1, 2004, the Hong Kong  Ministerial Declaration of December 2005 and the un-bracketed understandings of the December 2008 Fourth Revised Draft Modalities for Agriculture, have all been pushed to the back burner because one major country does not want to live up to them.

5.  The Fourth Revised Draft Modalities for Agriculture provided an explicit footnote to enable the developing countries to continue with their public stockholding programmes for food security. That footnote was the result of sustained negotiations and a compromise solution among key WTO members such as the United States, the European Union, India, Brazil, Australia and China, but the United States refused to accept the footnote because of opposition from its powerful farm lobbies.

6.  Trade-distorting practices in cotton which are harming producers in Benin, Burkina Faso, Mali and Chad are supposed to be addressed “ambitiously”, “expeditiously” and “specifically” by the distorting countries in the North. But cotton is now being swept under carpet because a major industrialised country does not want to address the issue because of its farm programme.

7.  Trade facilitation was one of the Doha issues but not the main item of the agenda at all.  It was actually dropped from the Doha agenda in Cancun, Mexico, in 2003 and was brought back in 2004 due to pressure from the United States and the European Union. The core issues of the Doha agenda were agriculture, services and developmental flexibilities.

8.  A major industrialised country which pocketed several gains during the negotiations refuses to engage in “give-and-take” negotiations based on the above mandates and has turned the Doha Round upside down.

9.  Industrialised countries along with some developing countries have formed a coalition of countries willing to pursue what are called “plurilateral” negotiations, only to undermine the DDA negotiations which are multilateral and based on what is called a “single undertaking” (that is, nothing is agreed until everything is agreed). Currently, these countries are negotiating among themselves on services, expansion of information technology products and environmental goods even though these issues are being negotiated in the Doha Round.

10.  Delay in the adoption of protocol will pave way for a healthy debate to reinvigorate the multilateral trading system which is being undermined by those who created it in 1948. The developing and poor countries want credible and balanced multilateral trading rules to replace what was agreed over 25 years ago in order to continue their “developmental” programmes with a human face.

Herein lies the crux of the issue – are the major powers of the North prepared to go along with a global trading system that puts the interests of the majority of the world’s people before their own interests?

(Edited by Phil Harris)

By Roberto Savio
ROME, Mar 11 2014 (IPS)

F. Scott Fitzgerald famously said “The rich are different from you or me”, yet in his days, in the early years of the 20^th century, the rich were not subject to public scrutiny, and were generally an object of envy, not resentment.

Fast forward to the 21^st century and the Occupy Wall Street movement, which first took to the streets in September 2011  in New York’s Wall Street financial district, on behalf of the 99 percent of Americans (who possess 60 percent of the national wealth) against the one percent that possess 40 percent, to denounce growing social inequality. The success of the movement’s popular action resonated throughout the world and so now the rich are striking back.

Tom Perkins is their leader, an 82-year-old with a net worth of 8 billion dollars. He owns a 1,600 square metre penthouse in San Francisco and has just bought a yacht worth 110 million dollars. In a letter to the Wall Street Journal in January this year, Perkins compared the “progressive war on the American one percent” of wealthiest Americans to the Holocaust, comparing the Occupy Wall Street movement’s “demonisation of the rich” to Nazi Germany’s anti-Semitism.So, the rich really are different from you and me, and they are growing so much that it would be a pity not to join them.

A month later, Perkins publicly stated that in elections the number of votes a person can cast should be proportional to the amount of taxes that that person pays. And he is stirring his peers to “come out”.

Bud Konheim, CEO of luxury fashion company Nicole Miller, has done just that with his message to the 99 percent – stop complaining. “Our 99 percent  are the one percent in the rest of the world … The guy that’s making, oh my God, he’s making 35,000 dollars a year … Why don’t we try that out in India or some countries we can’t even name. China, any place the guy is wealthy.”

John Mark, the former CEO of Morgan Stanley, which was rescued with public funds, is defending the extravagant salaries of corporation executives. He has just made a statement in favour of James Dimon, the CEO of JP Morgan Chase who received 20 million dollars at a time when his bank had lost several million in wrong investments in sovereign funds and paid a penalty close to 12 billion dollars for fraudulent practices.

According to financial sources, Wall Street has spent 600 million dollars in lobbies, to try to deter the action of the regulator in implementing the rules approved by the U.S. Congress for a somewhat stricter control, hoping to avoid a repetition of the financial meltdown of 2008 which, combined with the European crisis of sovereign funds, has brought unemployment to young generations everywhere.

For those who think that in reality the vote of a billionaire is equal to the vote of an unemployed person, this counterattack by the one percent is legitimate. The only problem is that, apart from their different weight in politics, I wonder it the same naïve persons would also believe that rich and poor pay taxes in the same proportion. According to Tax Justice Network (TJN), an organisation that campaigns to curb tax avoidance, fiscal paradises now hold close to eight percent of the gross world product (the U.S. has a gross domestic product close to half of that), and TJN underlines how big capital spurs corruption.

What is corruption? According to the Oxford English Dictionary, corruption is “dishonesty or fraudulent conduct by those in power”. And financial institutions and the one percent are certainly in power. According to TJN, the amount embezzled over the last 15 years is a staggering 30 trillion dollars, or half of the world’s annual gross product. In China, four trillion is thought to have disappeared between 2000 and 2011, much of it funnelled to fiscal paradises. In Russia, the figure is around one trillion and in the European Union 1.2 trillion.

All over the world, banks have been fined at unprecedented levels for fraud and corruption. Reading the U.S. Senate report (2009) on the level of corruption in UBS, Switzerland’s largest bank, is like entering the world of crime novels. The 176-page report details the extent UBS went to in helping U.S. clients hide billions in assets.

UBS paid a fine of 780 million dollars, and more has to come. In an appeal for a world corruption police force published in the New York Times last month, Alexander Lebedev reported the theft of five billion dollars from Bank of Moscow, four billion from BTA Bank and AMT Bank, four billion from Rosukrenergo, three billion from Globex and Sviaz Bank, two billion from Russian Agricultural Bank, one billion from Rosagroleasing, and one billion from VEFK Bank. According to Lebedev, a former senior KGB official and now businessman, and owner of the London Evening Standard and the Independent, “if someone steals one billion dollars, and heads for an offshore haven, it is practically impossible to take legal action.” Like all Russian oligarchs, he certainly has considerable inside knowledge!

Anyhow, there is no need for the one percent to be concerned. In spite of their complaints, they are doing better than ever. Just read this year’s Wealth Report, the annual compendium of all things rich from Knight Frank, the property management firm. Over the past decade, the

super-rich have swelled by 59 percent, and billionaires by 80 percent: they now stand at 1,682. Those with assets of more than 30 million dollars number around 167,000, equivalent to the population of a sizable town. In a recent poll, 75 percent of the famous 0.1 percent said that they increased their wealth in the last year.

By 2030, China is expected to have 322 billionaires, more than Britain, Russia, France and Switzerland combined: finally proof that socialism, albeit in its Chinese version, is superior to capitalism. Sovereign countries take note. Malta is proposing to offer its passport to those who give 650,000 euros, with no residency requirement. Malta is part of the European Union, so with its passport you can go everywhere. Spain and Portugal are offering residency, even with limited time, in their country if you make substantial investments, and Latvia and Estonia are now following. The U.S. gave 7,641 investors an immigrant visa in 2012, and 80 percent of these went to Chinese investors.

So, the rich really are different from you and me, and they are growing so much that it would be a pity not to join them. The market is now the basis for democracy – anybody can make it, it’s just a lack of will if we’re still part of the 99 percent!

Excerpt:

By Roberto Savio
SAN SALVADOR, Bahamas , Feb 27 2014 (IPS)

It is now generally accepted that the North-South divide created at the end of the colonial era and the coalition of New Countries against the powerful North of the world ended with the arrival of globalisation. There are now areas of the Third World inside the North, and areas of the North inside the South.

The world is no longer bipolar, with the two big powers creating the other divide, the East-West divide. We now inhabit a multilateral world, where a plethora of acronyms (such as BRICS, G20 and TTP) show how it is now fragmented into multiple players.

Yet, while the East-West divide has basically disappeared (even if President Vladimir Putin is playing an astute game to keep Russia alive as a world competitor, instead of accepting that it is just a regional player), the North-South divide is culturally and politically alive, while trade and especially finance are powerful forces for integration.

At a cultural level, the people of the North continue to maintain a strong geocentric view of the world, and the statistics on cultural exchanges show that only a small quantity of cultural products flows from the South to the North; the dominant flow is always between United States and Europe. In political terms, the two halves of the North interact much more with each other than with the South. The growth of China and Asia, as the powerhouses of the 21^st century, is not reflected at all in the fields of culture and politics.

While people feel a bond and a sense of communality among themselves, campaigns against immigrants continue to grow and as the North becomes less important in the new multipolar world, the stronger is the reaction to take refuge in populist, xenophobic and nationalist parties which dream of a return to the old day. This is why we have new political movements like the Tea Party in the U.S. and similar parties in Europe which will play an important role in forthcoming European elections.

In political and cultural exchange, there is little doubt that the hub of the North remains the U.S. Its citizens are not very interested in Europe, which is considered a different world, intent on protect welfare and with a touch of socialism (Rush Limbaugh of Fox News has denounced Pope Francis as instilling pure Marxism). But, on the contrary, Europe is looking towards the U.S., which is widely still considered the leader of the world. The U.S. exerts on Europe what in sociology is called a demonstration effect, which happens when there is a process of admiration and identification with a winning model.

Therefore, in this era of neoliberal globalisation, what happens in the U.S. still has many chances of reverberating in Europe. No example can be more definitive than the financial sector. European banks are increasingly behaving like U.S. banks, and Wall Street is the point of reference for behaviour and style. According to the European Banking Association, nearly 2,000 European bankers earned more than 1 million euro in 2013 (1,186 in the United Kingdom alone), and this is creating another demonstration effect, which is also being emulated in the industrial sector: a growing divide between what bosses make in relation to their employees.

This tendency shows absolutely no sign of slowing down and we can be sure that it will continue.

Recently, at the end of January, JP Morgan announced that for the closing of the 2013 financial it had increased the compensation of its President, Jamie Dimon, by a startling 74 percent to a total of 20 million dollars. This, for a year in which the bank had to pay 20 billion dollars in fines and narrowly escaped a plea of criminal guilty.

The New York Times then conducted interviews in the world of finance, to find how this was seen. In its summing up, the NYT reports: In the world of executive compensation, especially when viewed from the rarefied perspective of other chief executives, and more broadly on Wall Street, Dimon’s pay and how it was determined is not only defensible, but laudable. Ten days later, Francisco Gonzalez, President of the Banco de Bilbao y Vizcaya (BBVA), modestly echoed Dimon, announcing that for 2013 he will earn seven million dollars. The combined salary of Dimon and Gonzalez is equivalent to the average yearly income of 2,250 young persons in both regions.

No wonder that the same page of the NYT carried a report with the title Retailers Ask: Where Did Teenagers Go? Sales at U.S. teenagers clothes stores are expected to be lower 6.4 percent in the fourth quarter than in the previous quarter. Well, the U.S. teenage unemployment rate is 20.2 percent among 16 to 19 year-olds, far higher than the national rate of 6.7 percent. This would be a dream in Europe, where youth unemployment is much higher. A survey in Italy found that the majority of single over-35s are still living with their parents. And other data show that stores for the lower middle class are in crisis, while stores for the rich are booming.

So, social inequality is on the rise, and we have all the statistics showing how nearly all the growth in recent years has gone to the top one percent of the population. The middle classes, the results of a century-long fight for social justice and redistribution from growth are fast disappearing. According to a study from the London School of Economics, in 16 years we will have returned to the level of social inequality in the days of Queen Victoria (1837-1901). All this, against a background of general indifference among the political classes, engaged in a self-referential fight on day-to-day issues.

The only voice denouncing this process is the new Pope. Instead of being just the guardian of theology and doctrine, he is speaking on behalf of the people who are being left out.

The capacity to deliver anything which goes beyond the day-to-day dimension seems unfortunately absent in the North. In 2000, heads of state throughout the world committed themselves to a number of social goals, the so-called Millennium Development Goals. Those goals remain elusive. Let us not talk about issues of climate change, nuclear disarmament, elimination of fiscal paradises, mainstreaming of women and all the other issues which had their moment and are now forgotten. But Pope Francis is consistent and perseverant. If the system does not metabolise him, there is an outside chance that he will stir life into the anaesthetised political classes of the North.

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