Ramírez Gallegos: Towards a new political economy of equality


Dr. René Ramírez Gallegos details the new political economy of equality: "Deconcentrated wealth, dignified distances."

In 2008, I wrote an article under the title "'Good bye' pobretología, bienvenida ricatología". The implicit assumption was that the continent's problem is not poverty but the impoverishment generated by hyper-concentrated wealth accumulation. This suggests that we have to change the way we look at things. If the poor matter, we should not focus our attention on them, as the neoliberal recipe book subscribed to, but rather on the social, economic, ecological and cultural mechanisms that reproduce obscenely concentrated wealth. This means producing an epistemological change in the processes of social intervention: we must generate methodologies that measure the hyper-concentration of income and wealth and the undignified distances in order to break with the structural reproduction of asymmetrical power relations.

In this piece, I would like to present 12 nodes that allow us to reflect on the political economy of wealth and inequality. It will highlight the importance of insisting on abandoning 'pobretología' (‘povertology’)and focusing the analysis on the political economy of the generation of concentrated wealth that produces undignified distances and the accumulation of anti-democratic power. Thus, on the other side, the articulating axis of such analysis will be that generating deconcentrated wealth and dignified distances can only be possible if we move towards democratic equality — that is, an equality that breaks power asymmetries. In this framework, the analysis must always return to the relationship between concentrated economic accumulation and concentrated political accumulation, within the framework of economic and ideological cycles. As such, the perspective proposed in these short pages entails upending the regime of colonial and dependent capitalist inequality experienced by the economies of the global South.

1. From "decumulative accumulation" to deconcentrated wealth

It has been very common to find in progressivism's arguments that Latin America's problem is that its models generate little added value because its productive system is based on the export of primary goods, which does not generate enough wealth to make the leap forward that our countries need. Clearly, it is a problem if we only export oil and do not refine the raw materials to generate, for example, gasoline, or when we only export lithium but do not make batteries for electric cars. 

People used to say that developing countries had to reach manufacturing participation levels similar to those of rich countries before they could make the "great leap." But Marxist dependency theorists have already shown in the last century that it is a myth that industrialisation necessarily democratizes and equalizes by generating high-quality jobs. The region's problem is not just that the region lacks the wealth to make the "big push." The problem is that its pattern of specialization contains a perverse formula in its logic of wealth generation. On other occasions, I have ironically called this mode of production an oxymoron: "a mode of decumulative accumulation." Through processes of rent-seeking and social, economic and ecological dispossession, the economic elite generates a hyper-concentrated accumulation that would enable the development of our countries under a different distributive logic, even according to the standards set by the economic mainstream. However, wealth generated is not consumed by the workers or citizens of our economies, but rather is deposited in tax havens and linked to global speculative financial systems or — in the best of cases — to global value chains. 

Indeed, Latin America is the continent with the largest amount of deposits in offshore bank accounts in the world (Ramírez, 2023). The capital flight and deposits offshore are inherent to the logic that the peripheries "feed" global capitalist accumulation for its reproduction. But the logic is the opposite of that constructed by conservative narratives: capital does not migrate out of fear of the behavior of the markets or the economy of our countries, but rather the rentier culture of our economic elites generates capital flight that does not allow accumulation to take place within our countries, thus denying the possibility of generating robust economic systems. For example: Ecuadorians' deposits in offshore financial paradises are equivalent to 30% of their Gross Domestic Product (GDP). This percentage is similar to the Latin American average (27%). 

In this context, the narrative that "it should be an economic priority to generate the institutional framework to attract capital because there is not enough investment" is a political fallacy. But above all, it is a historical lie. More important than the inflow of capital for industrial investment is that there must be no flight of national (stateless) capital that could be invested within the country. 

The concentrated wealth that generates undignified distances is the product of an "internal colonialism" generated by a cultural practice of the historical and the new economic elites who are in charge of reproducing the logic of dependency that gave birth to capitalism: colonialism. The flight to offshore tax havens of the wealth generated in our countries is the source for the reproduction of the colonial logic that remains more alive than ever. From this perspective, overcoming the model of accumulation means breaking the colonial legacy that made capitalism possible and demonstrating that the political independence of global South countries was possible because it was accompanied — and has been sustained over time — by a historical economic dependence in which these countries are dispossessed internally to promote accumulate externally, thereby sustaining the health of capitalism in the countries of the core. 

In historical logic, it should be clear that in order to generate any kind of social transformation it is necessary to generate a great deal of accumulation during the transition. Such logic is viable because the productive system was born monopolistic/oligopolistic and reproduces itself over time. In Latin America, in the case of goods that do not compromise rights, de-monopolizing markets is often revolutionary. Faced with such an oxymoron of this economic model, it is necessary to discuss and implement a new one that generates deconcentrated wealth and breaks the internal colonialism of a historical economic elite that reproduces itself over time; all this while disputing the meaning of wealth that should incorporate other meanings of value (where even non-accumulation is possible).

2. The problem is not inequality but undignified distances.

A society of perfect equals is not only impossible, it is not desirable. The real problem is the undignified distances generated by the concentration of accumulated wealth in less than 1% of the population. From a justice perspective, I have argued that — on the negative side of equality — it is necessary to build societies whose distances do not allow the generation of processes of oppression, discrimination, subordination, exploitation between human beings and by human beings of nature; and, in turn — on the affirmative (positive) side of equality — it entails generating the necessary proximities so that mutual recognition can flourish and with it the possibility of reciprocity, fraternity and solidarity. From the point of view of praxis, such a perspective implies emphasizing public policies and social interventions that promote a type of equality which breaks with all forms of asymmetrical power relations: capital/labor, man/woman, white/mestizo/indigenous, core/periphery, domestic/foreign, human/nature. At the methodological level, such a perspective should lead to the generation of tools to assess when a society suffers undignified distances, whether public/private and social interventions are working to reduce them, and whether or not the systemic relations of economic and political processes generate an egalitarian democracy. We will return to this point later (see section 11).

3. Tax havens, inheritance and meritocracy

Latin America is often identified as the most unequal region in the world and this is immediately associated with income concentration. Measured by income, this is not true. The most unequal region in the world is Africa. The structural problem arises when we analyze the concentration of assets or inheritance (wealth). If measured by income, inequality is not so grotesque, but obscene distances can be observed when studying wealth in the 1/50 and 50/1 accumulation path: while the richest 1% of the population owns almost 50% of all the nation's assets, the bottom 50% of the population owns 1% of the total national wealth (see https://wid.world/). 

The structural problem from a historical perspective is that these undignified distances are transmitted from generation to generation. Conservative narratives have instilled the idea that inheritance is a right. In this area, the first point to discuss is: who is able to save in order to leave an inheritance? Under the forms of accumulation in our countries, savings are a luxury good. On average, only the richest quintile has the capacity to save, in the best of cases. The vast majority of people in the region live month to month and even day to day considering the levels of poverty and informal work that do not always allow for the generation of predictable salaries. If few people save, few inherit. 

But of those who do inherit, a good proportion of them inherit debt (as, for example, the average citizen living in Chile or Mexico); while very few inherit assets and wealth free of debt. Not only that, the hyper-accumulation of wealth comes from the hyper-concentration of inheritance. In this framework, it is hypocritical for liberal narratives to talk about meritocracy without referring to initial endowments and redistribution of inheritance. The accumulation of inheritance is one of the main reasons why the probability of being born poor and dying poor and being born rich and living rich is more than 90%, as Nobel laureate Joseph Stiglitz points out. Apart from the criticisms that can be made of the concept of meritocracy, most of which I share, it should be pointed out that there will be no meritocratic society if there is no democratization of wealth from a perspective not only of the present but also the intertemporal, which must be accompanied by democratization of land, credit, technology, quality education and participation in the share capital of public and private companies (with a say and a vote). 

But once again, the discussion of inheritance brings us to the black hole of gargantuan inequality: tax havens. The structural way in which oligarchies protect their inheritance is through a sophisticated financial network that articulates the ownership of their assets with deposits in offshore trusts. In this way, inequality is transmitted from generation to generation in the long term; and, in the short term, by evading taxes. The possibility of creating more egalitarian societies that break power relations — in this area — passes through deconstructing the institutional framework created to reproduce the society of privilege throughout the centuries and for centuries to come, amen!

4. Private/public corruption, money laundering and tax havens

All roads seem to lead to the tax havens. Usually we are concerned with micro-level corruption processes, but certainly the systematic process of large-scale corruption leads to the money trail that systematically leads to tax havens. These territories are not only useful to avoid paying taxes, but also serve as a space to hide illicitly obtained resources. It is necessary to study the articulation of private banks with drug trafficking cartels (and related areas, such as arms sales, trafficking in women, organ trafficking, etc.) in the process of "money laundering". The commissions of business dealings with the State, as seen in public trials in different countries, have usually been revealed when leaks such as the "Panama Papers" or "Pandora Papers" have been made public. For example, the Panama Papers showed that 214,000 opaque or paper companies, which have no business but only a bank account, operate in 200 countries, with the collusion of 500 banks and 10 politicians, 12 of whom have been presidents of different countries. In turn, the Pandora Papers, the largest leak of financial secrets from offshore companies (11,5 million confidential documents), exposed 35 world leaders (presidents), 330 public officials from 90 countries and Forbes-ranked businessmen. Some of those named face charges today of corruption, money laundering or tax evasion 1. Such processes that end up in tax havens are articulated through certain banks of the global financial system. In order to study wealth, one must analyse deposits in tax havens, accounts in offshore companies and the banks linked to such processes. If corruption is to be combated in a structural way, concrete action must be taken on the possession of resources by politicians and public actors in so-called tax havens. Perhaps a pioneering proposal to combat corruption and tax evasion was made in Ecuador when, by means of a popular consultation, it was decided that no politician who wished to gain access to public office by election could have resources or assets in these countries2.

5. Info-cognitive and natural resource extractivism:

The asymmetries in the terms of exchange and accumulation by dispossession create a flow of appropriation not only of money but also of physical resources.  High-income countries depend on a large appropriation of net resources from the global South, including: 10 billion tons of raw materials, 379 million human labor hours, 27,2 EJ of energy, and 800 million hectares of land (Dorninger, et al., 2021). This net appropriation is not accompanied by a net payment of funds, so the final result is positive surpluses in the trade balances of the core countries (often in collusion with the intermediary elites of global capital). 

This is not because high-income countries are technologically superior or more productive. As Dorninger et al. point out, the price differential is due to power imbalances in the global economy that impose higher prices than poorer countries. In primary commodity-exporting countries, large fortunes are associated with those companies and individuals linked to the oil and mining sector. Studying the negotiations of oil and mining contracts is undoubtedly fundamental to understanding how undignified distances are generated and how the processes of enormous accumulation take place. 

It is difficult to build democratic societies with dignified distances in rentier economies based on the extraction of primary resources. However, in the transition to cognitive capitalism, the valorization of capital is not only linked to exploitation in the factory but also to labor self-exploitation in the "Netflix" times of self-convinced time autonomy as well as in the alienation that occurs throughout everyday life and even outside working hours. The accumulation of our time, our information and our knowledge is the grand rentier strategy of the Big Tech corporations, such as Google, Facebook, Amazon, etc. In the 21st century, info-cognitive extractivism is undoubtedly one of the cornerstones of concentrated accumulation and undignified distances. Part of the recovery of the falling rate of capital profit at the global level is being realized through info-cognitive rentierism linked to novel regulatory frameworks for intellectual property, supported by new technologies that allow for rent capture linked to the time dedicated to information and knowledge generation (including "biopiracy" and ancestral knowledge).

6. Economic/financial (banking) intermediation and narco-capitalism

Countries that export primary commodities are also often characterized by being traders of imported goods. One of the central sources of wealth accumulation and a structural barrier to generating added value in our economies is the rentier nature of the intermediation of both importers and exporters. 

Most of the products purchased by the State tend to be imported goods. The analysis of public purchases of imports and the lobbying of importer/exporter traders in the State’s spaces of foreign trade is a space that allows us to understand concentrated accumulation. In turn, on the side of exported primary goods, analyzing the value chain with an emphasis on the intermediation between the costs of production and the sale of the exported (agricultural) good allows to understand not only the poverty of peasants (generally Indigenous peasants in the countries of the Andes, Central America and Mexico), but also the excessive accumulation of businessmen exporting agricultural goods. Finally, studying the financial intermediation of banks generated through lobbying in regulatory frameworks — as well as supported by technical and technological mechanisms used in the generation of excessive profits — is fundamental to understanding the processes of reproduction of undignified distances. However, today, studying such intermediation is not enough. 

Currently, the other mechanism for recovering capital gains is linked to the rentierism generated within the framework of narco-capitalism. Another route that allows us to see the processes of generation of concentrated wealth is the trade of "vaccines" (or simply to live) that are generated at the micro level and the articulation of the drug cartels with certain banks and tax havens. The violence that has grown in the region is linked not only to the dispute between drug cartels for control of specific territories, but also to the struggle among banks to capture these deposits. Following the route of illicit money should be part of the research agenda on concentrated wealth.

7. Illegal and illegitimate external debt

The struggle for State power by the representatives of economic interests reproduces rent-seeking by guaranteeing State norms and institutions for this purpose. The most effective way of generating this concentration is linked to the political economy of debt. This process is not new, but dates back to the processes of political independence of our States. 

When analyzing the loan conditions as well as their restructuring through the process of buying and selling bonds, it is possible to detect the abuses (both from a legal and legitimacy point of view) that have occurred in our countries during these processes. In the course of debt audits, abuses such as high interest rates, exorbitant commissions, abusive clauses, and loans granted without due authorisation or without compliance with legal requirements have been detected. This is part of the history of our countries. Today, it is no coincidence that the neoliberal governments of the last five years in Latin America have had the usual practice of generating massive processes of indebtedness that, through the "financial bicycle", go abroad without being reinvested in the country. In these parts, the US establishment seems to consider Latin America only in terms of accumulation by dispossession: the aid packages to President Macri of Argentina in 2018 (USD $57 billion), to President Moreno of Ecuador in 2019 (USD $4.5 billion), and to President Duque of Colombia in 2021 (USD $11 billion) were conditional on austerity measures that triggered foreseeable social explosions. Such debt not only generates accumulation in an economic elite, but also reproduces the conditions to tie the hands of governments that aim to create popular plans of redistribution towards the large social majorities.

8. Private Democracy: Electoral Processes and the Capture of Justice Systems

Julia Cagé's (2021) book The Price of Democracy: How Money Shapes Politics and What to Do About It explores how economic power influences modern politics. She argues that money unbalances civic and democratic representation by giving the wealthy a much stronger voice in the political process, and this is evident in the disproportionate donations of parties representing the elites compared to the money available to left-wing parties. Cagé argues that the Western democratic systems are a function of the economic interests of political parties’ major funders; in other words, "he who pays, wins," to which we would add, "he who pays, rules." In this context, we can speak of private democracy vs public democracy (ibid). Unlimited private donations not only highlight the programmatic content of candidates and parties that are "sponsored" by investors, but also appropriate democracy as a public good. It is the end of political parties and the triumph of capital as the only true party, the author points out. In this context, through different mechanisms, the campaign is paid for through different particular actions or omissions: public policies, regulations, privileged information, justice systems, positions in strategic offices such as public companies or regulatory bodies. 

One of the origins of concentrated wealth accumulation and its perpetuation is associated with the systematic link between financing, electoral processes and government ‘payoffs.’ These are mechanisms that privatize democracy, capture the State and generate concentrated wealth accumulation. This is perhaps one of the most regressive political processes in modern representative democracy.  The privatization of democracy is also about the cooptation of justice systems. If one looks at citizens belonging to the richest 1% of the population, it is not difficult to find cases where they have won lawsuits against the State. Studying the lawsuits that Latin America's billionaires have against the State would undoubtedly reveal the political economy of injustice in countries where the balance of power should be centered on the separation between economic powers and the State and not exclusively — as liberals say — between the branches of State power.

9. On value: narratives and temporality of the regressive wealth tax policies 3

In the preceding lines, I have argued for the search for equality that breaks with power relations. This usually implies focusing on the distributive rather than the redistributive side; that is, equality is achieved while wealth is being generated (ex ante) rather than afterwards (ex post). Redistributive policies generally produce greater equality, but do not necessarily generate greater symmetry in the distribution of power. At the extreme, we could say that, if there is a fair distribution in the same productive process, it would not be necessary to redistribute income through taxation. 

In fact, the tax system plays a fundamental role in the constitution of the capitalist system. However, beyond its instrumental dimension, tax policy is linked to collective objectives, ideology, values and political power. Thus, a low tax burden translates into a minimal social contract, and fiscal regressivity establishes on its side a tolerance of distributive injustice where those who have the least contribute the most. In the light of the classical view, it could be argued that welfare regimes are more closely aligned with regimes of (in)equality as they are the (formal and informal) regulatory frameworks that structure the coexistence pact. We could even point out that the Latin American rentier culture is the structuring basis — by action or omission — of regressive fiscal policies. In this sense, the Latin American peripheral State, where the tax burden is low and highly regressive, to some extent prefigures the neoliberal State before it existed (Palma, 2019). 

In this scenario, while in societies with such unequal initial endowments it is fundamental to have progressive policies in the redistribution of income and wealth, we must also draw attention to the construction of narratives that form the meaning of value, as well as the structural non-actions that generate concentrated accumulation and undignified distances. Without proposing a definition of the boundary between productive and unproductive, certain economic power groups were able to develop a new narrative that can be summarised as follows: "I am a particularly productive member of the economy, my activities create wealth, I take big 'risks', and therefore I deserve a higher income than people who simply benefit from the repercussions of this activity" (Mazzucato, 2018: 13). This imaginary is complemented by an important corollary: if society wants to continue the progression of its material condition, it has to leave (fiscal) space for those who create value to continue creating value. In other words, taxation on capital must be reduced and workers with high "human capital" must have the highest remuneration to unleash the productive forces. In this way, regressive forms of taxation are generated in the mode of production itself. This is a clear line of historical research and the semiotics of wealth.

However, fiscal policy also has its temporality. As discussed earlier, fiscal policy is an instrument that affects capabilities, interpersonal preferences and collective vision. Regressive policies — by concentrating economic wealth in a hyper-concentrated society — legitimize the preservation of the present or the lack of hope for future change. Thus, the fiscal instrument is a regulator of the pace of societies. From this point of view, taxation is also a key element of ecological strategies because it displaces the need for acceleration of societies. It is part of a solution to alleviate the dependence on labor due the creation of an artificial monetary scarcity that leads to this paradoxical situation in which workers sell their life (i.e time) in exchange for money to then buy time for life (in the form of goods and services) (Ramirez, 2019: 111). A more egalitarian distribution of wealth, placing the value of time over money, would allow us to rethink the capitalist ethic of working more today in order to enjoy the good life tomorrow. 

Thus, the debate on the temporality of fiscal policies may prove to be an important medium to open paths towards realizations of lives oriented towards time well-lived (Ramírez et al., 2020; Ramírez, 2019). This leads us to an epistemological rupture: what do we mean by wealth, what do we mean by value and how do we construct it?

10. On the redistributive politics of progressivism: farewell to Rawls or the "poor-first trap”

It can be argued that neoliberal policies are in hegemonic decline; they dominate and survive without convincing. Nevertheless, over the last twenty years or so there has been a consensus on both the left and the right: poor people first. Undoubtedly, poverty reduction is an ethical imperative. However, focusing on the poorest (generally from a social rather than an economic perspective) entails problems that make structural change impossible — in the medium and long term — if the rest of society is not taken into account. Many progressive governments have sought to focus their actions on the principle of ‘maximin’ (maximize the welfare of the poorest in society), forgetting or paying little attention to the rest of the population distribution (Ramírez, 2023). If we want to advance in processes of empowering equality we must kill Rawls and his principle of justice as equity of maximization of minimums. The "poor first" principle involves traps that have ended up reproducing the unjust social structure ad infinitum and in some cases even making it more unequal. 

Pro-poor policies have generally perpetuated poverty. Without enumerating them all, I would like to list three traps that are generated around the principle of equity that justifies the inequality if it maximizes the minimums of the indigent.4

  • Trap 1: Goodbye to the worker, hello to the poor. Before neoliberalism, the main social question was centered on the worker, within the framework of the pursuit of industrialisation processes. In the 1990s, there was a process of transmutation of the problematization of the social question in which the poor supplanted the centrality of the worker. This implied a shift in the citizen's agency, where the citizen could be the author of their own welfare through labor and collective action in trade unions, to a paradigm where they were the recipient of charity through public welfare policy. Debates and policies on productive change were thus abandoned, trade union collective action was to be eliminated, and social policy was put on the table of public debate, deliberately separated from economic and productive processes. The relevant social fact is the relegation of labor-value. It was a welcoming of non-emancipatory work, unworthy of the social and the human.5 Goodbye worker, hello to the poor!
  • Trap 2: Poverty can be reduced without changes in the socio-economic structure and with a deepening of undignified inequalities. Although Latin America has seen a reduction in inequality for almost a full decade of the new millennium, a good portion of the region’s countries have shown structural immobility in the distribution of income and wealth over the last twenty years. Not only that, of the total number of governments that reduced poverty during the first two decades of the 21st century, 40% also saw an increase in the share of the top 1% of the income distribution. In Peru, Alan García (2006-2011), who reduced poverty by 18 percent, also increased the share of the top 1% of the distribution. Needless to say, at the end of his government in 2011, the top 1% of the income distribution had 26% of the total net national income (NNI) and 41% of the nation's wealth, while the bottom 50% of the distribution had 9% of the income and 1% of the country's wealth, respectively. Poverty was reduced, even deepening the pre-existing undignified gaps. On the other ideological side of the spectrum, José “Pepe” Mujica in his 2010-2015 government period reduced poverty, but also increased the share of the top 10% of the distribution and marginally that of the top 1%. In fact, the evidence shows that there can often be poverty reduction without a change in the income or wealth share of the bottom 50% of the distribution. In other words, the fact that poverty is reduced in relative terms does not necessarily go hand in hand with an increased share of the pie received by the working classes in the bottom half of income distribution. Thus, the evidence shows that often governments that really went for the "poor first" strategy did not necessarily change the structural distribution of the pie and did not necessarily reduce the previously existing undignified distances, because the other social strata also improved and in many cases at a faster rate than the poorest classes or the popular classes. This is not to say that there should be no accumulation. But the accumulation in the region of the economic elite is grotesque. In countries such as Finland, Iceland or Norway the top 1% of the distribution have 10.8%, 8.7% and 8.8% of net national income, respectively. The transition requires deconcentrated accumulation. In this sense, without excluding the generation of dignified distances, more important than maximizing the minimums (max-min) is minimizing the grotesque maximums (min-max). It is necessary to consider that, in operational terms, poverty lines are so low that even exceeding them keeps the poor population in a state of vulnerability. No wonder that even in countries that had large reductions in poverty, the shock of recent years has brought them back to their initial state of poverty. This situation is due, among other reasons, to the fact that very few governments have accompanied poverty reduction with a significant distribution of wealth and an emphasis on pre-tax equality that democratizes power. Thus, "poor people first" usually ends up meaning a distribution of minimums (crumbs) for the poorest in society. No doubt that it is a better project to "maximize the minimums" than to increase the privilege of the upper sectors that diminishes the participation of the great majorities. Buit is also clear that it is far from being a project that seeks to democratize power and structurally transform society.
  • Trap 3: The dismantling of the public sphere, the exchange value of rights, and accumulation through privatization of the social. The ‘maximin’ discourse of "the poor first" was part of the narrative of neoliberalism, constructed through the concept of equity, which made it possible to abandon universal policies and propose targeted social policies, dismantle the public sphere and begin the process of privatization of social services, in the name of financial efficiency. As part of the imaginary, the universal right was focused on the poor, because those who had the purchasing power had to buy the right in the private sphere. The social sphere was privatized and generated concentrated accumulations; this was accompanied by parallel processes of privatization of strategic sectors (energy, health, social security, education, etc.) and the dismantling of development banks. To understand concentrated wealth is to understand the processes of dismantling the State, the privatization of the social sector, strategic sectors and public banks. As the public sector was left to the poor, the possibility of raising one's voice, as Hirschman would say, was reduced to a minimum, which is why there was a systematic deterioration in the supply of quality, public social services. Poverty as a social issue went together with the squandering of the public sector, and with it, the possibility of building integrated societies. Thus, inequality increased not only because of the de facto privatization processes, but also because the deterioration of the public sector acted as a multiplying subjective factor in the defense of inequalities. At the same time, the establishment of conditional monetary transfers was the hegemonic policy. Through a kind of exchange value of rights, social policy aimed to change behavior by means of money to encourage mothers to send their children to school or to health services by conditioning the transfer. This logic went together with a kind of stigmatization of the poor and public services, which, together with the silence in debates on industrial policy, generated a perverse cycle of social immobility and the reproduction of poverty. Thus, the metric of merit, the main narrative intermediary, is exhausted as a myth in a society that, seeing only the lower end of the curve, does not end up publicly questioning the grotesque and undignified accumulation of the top 1% of the population compared to the popular classes. It is this same 1% that leverage the discourse of success/merit to justify their privilege and thereby kill the possibility of both upward and downward social mobility. It is no coincidence that in the public debate of recent years, the defense of inheritance’s merit has gained prominence to justify excessively concentrated initial wealth that generates undignified distances with little to no chance of being reversed.

11. The public as equality

Political philosophy when referring to debates on justice seeks to answer the question, "equality, of what?” It depends on the main focal variable, which will be determined by the political priority: freedom, income, utility, primary goods, capabilities, etc. If the aim is to produce societies with dignified distances, it is clear that accumulation must be deconcentrated. However, the meaning of equality might not demand —only— the equalization of something: goods, services, or capabilities. We might even point out that the first question to be answered is "equality, between whom?” Looking at interpersonal relations entails changing the way we look at equality. 

Societies in Latin America are walled off societies — physically and subjectively fenced off. Neoliberalism is a societal model that seeks the privatization and commodification of all spheres of life, and obviously of all things, or nature. While one sphere of analysis is the “what” of equality, it is essential to produce equality in common meeting spaces where the "what" does not allow differentiation or the construction of distances. In this framework, the maximization of the public sphere in everyday life in its fullest sense generates the conditions where distances can converge. The recovery of public education, public health, and public physical spaces where the sense of humanity and the search for shared projects is what prevails, makes it then possible to build more egalitarian societies by promoting the meeting and coexistence of people who are different in terms of class, gender, religion or ethnicity. What separates us is not only disproportionate accumulation, but the possibility of encounter. Social distances diminish when it does not depend on the "what" that separates them and there is a kind of encounter in common spaces that allows us to discover each other, to understand each other and to empower us to live together. Thus, for example, the productivity of public classrooms in universities helps to break down distances when Indigenous people, whites, mestizos, rich, poor, Muslims, Catholics, men, women, sit in them together. We are unequal not only because we do not have equal amounts of goods, but also because the private and mercantile spheres make it impossible to share time to project shared futures. 

In societies where the public sphere is recovered and interaction does not differentiate skin color, religion or wealth, equality is more likely to flourish. Living with the other promotes mutual recognition and with it, the understanding of the other in order to build a "we." Only when “we are,” is equality a fact.

12. From max-min to min-max and the convergence towards the center to build dignified distances

Neoliberalism created a methodological arsenal that allowed the construction of narratives that supported Rawls' philosophical principle of "equity as justice" and gave way to the moral hegemony of "the poor first." “Povertology” became a “science" for which there were very few technicians with the knowledge to analyze the phenomenon. Engel's coefficient calculations, poverty incidence, poverty gap and severity, poverty lines and maps, etc., constitute until now analytical technologies that are the lenses through which social policy is sustained. 

The ethical assumption is justice as fairness, based on the search for maximizing the minimum (max-min). These lenses allow us to count the poor, but they do not allow us to see the undignified distances. Indeed, analyzing the evolution of poverty, even in the best of cases of poverty reduction, in many countries (even in periods of so-called progressive governments) there was an increase in the concentrated accumulation of income or wealth in parallel. Poverty reduction could coexist with an increase in the primary distribution of income (the ratio of capitalist/worker participation increased) (Ramírez, 2022). On the one hand, changing the perspective means building analytical tools to capture what is happening with wealth concentration and the income of the population as a whole. In this sense, it implies formulating ‘wealth lines’ (not poverty lines) and knowing the percentage incidence of wealth over time. It means having a public debate on the evolution of undignified distances, whether they are increasing or decreasing. This can be done by using, among other methodologies, wealth lines — measured as the upper limit of the highest income distribution at which the country's poverty could be overcome. For example, in the case of Ecuador 6 (Ramírez, 2012) or Argentina (OCEPP, 2020) 7 , it can be seen that with less than 4% of the income/consumption of the wealthiest members of the population, the poverty of the entire population could be overcome. It is clear that if such a percentage decreases, the undignified distances are increasing. 

I have also proposed the Anti-Democratic Redistribution Ratio (ARR) indicator. This ratio compares the participation of the 1% versus the 50%. Increasing the concentration of the richest 1% of a country usually means increasing the power of de facto elite economic groups and decreasing the degree of State autonomy. On the other hand, raising the share of the bottom 50% of the distribution implies increasing the power of the popular classes. The RRA allows to see to what extent there is a closure or not of gaps between the concentrated accumulation of the 1% of the population that holds de facto power (which is already grotesque in its initial distribution) and the share of wealth of the great popular majorities (which is negligible). Redistribution is undemocratic if it is observed that the share of the 1% grows and is accompanied by a lower share of the bottom 50% of the population. A minimum consensus of the countries to break the undignified inequalities is that the RRA assessment should be less than 0 (or moving towards being less than 0); that is, that the richest 1% should not have more than the lowest 50% of the distribution. The mere mention of such an assertion seems outrageous, but during the two decades of the new millennium, no country in the region had an average ARR of less than 1 in Latin America.8 

Not only that, in the last five years of the second decade of the new millennium, there was an average increase in the RRA in Latin America (Ramírez, op. cit.), which means that income distribution tended to be anti-democratic at the beginning of the third decade of the 21st century. Given this context, the focus of attention should not be to maximize the minimums (min-max) but to minimize the maximums (min-max), seeking convergence towards the growing center, with the aim of eliminating grotesque accumulations and undignified distances. 

In turn, if one wants to build equality that breaks power relations, it is necessary to systematically observe how the primary distribution of income evolves, i.e. the relationship between the share of capitalists and workers. There are countries that may have decreased the share of the top 1% or the top 10% of the distribution, but increased the share of capitalists or reduced the wage share of workers. In these cases, it could be noted that inequality was reduced without breaking down power asymmetries. Thus, it can be pointed out that observing democratizing equality means studying whether the capitalist/worker, male/female, local/migrant, non-Indigenous/Indigenous, and other wage gaps diminish. From another perspective, empowerment implies providing the freedom to live a good life, which means democratizing time and recognising the multiple temporalities of the (bio)diversities (Ramírez, 2023). 

From this perspective, the construction of a full democracy implies building a society that breaks down its undignified distances (material, subjective and temporal) while building equality that breaks down the structural asymmetries of power.

In conclusion: Poverty/inequality or inequality/poverty — the order of the factors does alter the product.

It is clear that the struggle for democratic equality is the struggle to escape the capitalist system, which tends towards the formation of monopolies that concentrate political power. However, in order to move in this direction, it is necessary to unravel the social, cultural, economic and political context that reproduces itself in its objective practices and subjective constructions. Although the narrative has been publicly constructed with poverty as the central axis of social discussion, what we have tried to suggest in this prologue is that such a view supports a certain type of society which, although it is in accordance with the maxim of "the poor first," does not break with the structures of domination, exploitation and discrimination that threaten democracy and social coexistence. 

As such, if poverty is not the "social question," we maintain that the problem is impoverishment, generated by a political economy (monopolistic or oligopolistic) of hyper-concentrated enrichment that characterizes our societies. In this context, the political economy of building dignified distances and deconcentrated accumulation — breaking the historical power relations that have existed in our societies and which reproduce themselves in the prevailing mode of accumulation (which includes viewing nature passively as an object of extraction), in social relations and in their cultural practices — must be at the center of the debate on the social question. If poverty is the priority, the construction of an egalitarian democracy and democratic equality cannot be built without taking into account the social distances resulting from historically constructed asymmetrical power relations. The historical evidence of neoliberalism has demonstrated this. The social product of povertology was societies with concentrated wealth, undignified and undemocratic (if benevolent) distances. 

If poverty is to be overcome, the social issue must be the construction of dignified democratic distances; that is, equality that breaks down power relations and builds societies where distances are not so great as to generate oppression and are short enough to generate the possibility of reciprocity and mutual recognition. At the level of the accumulation matrix, this means changing productive structures and prioritizing collective ownership of capital, where citizens and workers are the owners or have a majority of the capital stock. It should be clear in this context that it is not the same thing to intervene first in the poor and then seek to reduce inequalities, as it is to seek to build decent democratizing and democratizing distances with deconcentrated accumulation, where, in the same process that wealth is generated, the popular classes are empowered and citizenship is built. 

Post-capitalism is not viable with just any kind of equality; it must be a democratic equality. It is clear that, in this sense, the order of the factors does alter the product!


Cagé, J. (2018). The Price of Democracy: How Money Shapes Politics and What to Do about It. Cambridge, MA: Harvard University Press.

Mazzucato, M. (2018). The value of everything: Making and taking in the global economy. UK: Hachette UK.

Milanovic, B. (2020, April 24). Ricardo, Marx, and interpersonal inequality. Globalinequality. https://glineq.blogspot.com/2020/04/ricardo-marx-and-interpersonal.html

OCEPP, (2020). Línea de Riqueza en Argentina, Buenos Aires: OCEPP. 54048a_848438425b2441c595657e10a0f7f477.pdf (usrfiles.com)

Palma, J. G. (2009). “The revenge of the market on the rentiers. Why neo-liberal reports of the end of history turned out to be premature”. En Cambridge Journal of Economics, 33(4), 829–869.

Piketty, T. (2019). Capital e ideología. España: Deusto. 

Ramírez, R. (2012). Igualmente pobres, desigualmente ricos. Ed. Ariel: Quito – Ecuador. ISBN: 978-9978-9939-0-3.

Ramírez, R. (2017). La gran transición en busca de nuevos sentidos comunes.Quito – Ecuador: CIESPAL. ISBN: 978-9978-55-154-7.

Ramírez, R. (2019). La vida y el tiempo: Apuntes para una teoría ucrónica de la vida buena a partir de la historia reciente del Ecuador [PhD Thesis]. Universidade de Coimbra.

Ramírez, R. (2023). Quien parte y reparte, ¿se queda con la mejor parte? Las derechas y las izquierdas en la distribución del pastel en América Latina, 2000-2020. Buenos Aires: IPET.

Ramírez, R. y Albertone, B. (2022) “Política fiscal regresiva”, en Pereda, C. (2022), Diccionario de Injusticias,  Ciudad de México: Editorial Siglo XXI.

Ramírez, René y Burbano, Rafael. “Good bye pobretología, bienvenida ricatología”. En Cuadernos del Pensamiento Crítico Latinoamericano, Nº 55 julio de 2012 (CLACSO). Publicado en La Jornada de México, Página 12 de Argentina y Le Monde Diplomatique de Bolivia, Chile y España. http://biblioteca.clacso.edu.ar/ar/libros/secret/cuadernos/55/55-Ramirez-Burbano.pdf

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Ramírez, R., & Minteguiaga, A. (2018). “¿El bienestar de la desintegración social?”. En Minteguiaga, A. y Aguilar, P. (coords.). La disputa por el bienestar en América Latina en tiempos de asedio neoliberal. Buenos Aires: IIGG-UBA y CLACSO. 2020. Pp. 213-245. ISBN 978-987-722-631-7.

Ramírez, R., Schobin, J., & Burchardt, H.-J. (2020). El buen y mal vivir del bienestar/desarrollo en Alemania y Ecuador. Reflexiones a partir del análisis del tiempo. Revista Crítica de Ciências Sociais, 122, 3–30.

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La pregunta realizada en Ecuador en la consulta popular fue: ¿Está usted de acuerdo en que, para desempeñar una dignidad de elección popular o para ser servidor público, se establezca como prohibición tener bienes de capital, de cualquier naturaleza, en paraísos fiscales? Con 55,12% la población votó por el “sí” y el 44.88% por el “no”.
Para analizar detalladamente el argumento planteado en este inciso ver: Ramírez, R. y Albertone, B. (2022).
Para un análisis de todas las trampas ver, Ramírez (2023) Quien parte y reparte, ¿se queda con la mejor parte? Las derechas y las izquierdas en la distribución del pastel en América Latina, 2000-2020, IPET: LANUS.
Para un análisis sobre esta temática ver Andreoni, Chang, 2017.
En el caso de Ecuador, la incidencia de la riqueza en el 2008 era del 2.1% (Ver Ramírez & Burbano, op. cit).
“Los resultados muestran que, si se redistribuyera el 28% del Ingreso Total Familiar del 1,4% de la población más rica, se eliminaría la pobreza medida por ingresos sin modificar significativamente la situación de los “ricos” (OCEPP, 2020, 2).
De una muestra de 46 gobiernos analizados durante los últimos 20 años en la región, únicamente en las presidencias de Rafael Correa, Cristina Fernández, Raúl Castro y José Mujica se consiguió un RRA menor a 1. (Ver Ramírez, 2023).
The question asked in Ecuador in the referendum was: Do you agree that, in order to hold an elected office or to be a public servant, it is prohibited to have capital assets of any kind in tax havens? With 55.12% of the population voting "yes" and 44.88% "no".
For a detailed analysis of the argument raised in this subsection see: Ramírez, R. y Albertone, B. (2022).
For an analysis of all the traps see, Ramírez (2023) “Quien parte y reparte, ¿se queda con la mejor parte? Las derechas y las izquierdas en la distribución del pastel en América Latina”, 2000-2020, IPET: LANUS.
For a discussion of this issue see Andreoni, Chang, 2017.
In the case of Ecuador, the incidence of wealth in 2008 was 2.1%. (Ver Ramírez & Burbano, op. cit).
"The results show that redistributing 28% of the Total Household Income of the richest 1.4% of the population would eliminate income poverty without significantly changing the situation of the 'haves'. (OCEPP, 2020, 2).
Out of a sample of 46 governments analyzed over the last 20 years in the region, only the presidencies of Rafael Correa, Cristina Fernández, Raúl Castro and José Mujica achieved an RRA of less than 1. (Ver Ramírez, 2023).
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