It’s inspiring to see the World Inequality
Lab researchers directly engage in the post-growth debate
with a grand vision of global economic convergence. We can
only hope it spurs a peaceful mass citizens’ movement to
overcome the inevitable opposition of the ultra-rich, writes
STWR.
At the World Inequality Conference
in June, the renowned economist Thomas Piketty and a team of
45 researchers from the World Inequality Lab unveiled the Global
Justice Report. It’s a highly impressive and eloquent
proposal to achieve ‘equality and prosperity within
planetary boundaries’ by the end of the century. Based on
a fully quantified roadmap derived from extensive
macroeconomic analysis, the 135-page report sets forth an
ambitious vision: to construct a global economy that shares
global wealth and achieves high well-being for all while
rapidly decarbonising energy systems, thereby maintaining
emissions within the relatively safe limits of
1.8°C.
This hopeful outlook provides a welcome
antidote to our times, in which the world is already reeling
from climate breakdown, geo-economic confrontation and a
widening structural economic divide.
The core aim of
the proposal is to achieve full income convergence across
all countries by 2100, centred around a target level of
€5,000 (about $5,700) per month for every person. To
achieve this, the bottom 50 percent of humanity need to
increase their global wealth share from 2 percent to 30
percent. The top 0.001 percent, in contrast, would see their
wealth fall from 6 percent to 0.05 percent—a ‘striking
redistribution’, to quote the report, which would
essentially abolish the billionaire class.
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A Global
Justice Fund serves to administer this immense effort at
international economic sharing, financed by a global wealth
tax and a top income tax levied on the richest 1 percent of
the world’s population. Some of the revenue raised would
go into a World Sovereign Fund, which is projected to
accumulate assets equivalent to 60 percent of world GDP and
replace tax revenue as the main source of financing. Country
dividends are designed to be distributed on an equal
per-capita basis, therefore providing more resources to
poorer than richer countries and vastly more resources than
currently allocated to development aid. These funds also
come with strong conditionalities in terms of climate
investments, inequality targets, and health and education
expenditures.
A vision of sufficiency
The main
novelty of the report is to put the concept of sufficiency
at the centre of its analysis, rightly arguing that we
cannot stay within a 2°C carbon budget if the entire human
population adopts a rich-world lifestyle of high private
consumption. Sufficiency, as the report defines it,
therefore requires more than halving average working time to
1,000 hours, roughly the equivalent of a two-and-a-half-day
standard week.
This needs to be accompanied by a
significant shift from material to immaterial sectors, such
as health and education, which in turn would help refocus
the economy toward low-consumption activities. A substantial
change in food habits and reduced meat consumption could
also allow for a strict deforestation ban, freeing up arable
land while scaling down high-emitting agricultural
practices. At the same time, sufficiency in production and
consumption patterns must be combined with rapid
decarbonisation of the energy system, as spurred and enabled
by the Global Justice Fund.
All this can read, at
times, as a wish list of sustainability concepts and
policies long espoused by environmental thinkers. But the
work of the Global Justice Project is far wider in scope
than Piketty’s best-selling tome, Capital in the
Twenty-First Century, which famously used vast
historical and economic data to argue the case for a
progressive global tax on wealth. Back in 2015, we at STWR
and others criticised the book for failing to take
seriously the ecological limits to growth and planetary
boundaries. So it’s inspiring to see the World Inequality
Lab authors directly engaging in this debate, fully
denouncing the rhetoric
of ‘green growth’ that assumes we can address
environmental challenges by indefinitely increasing the size
of the pie without reducing inequality, consuming less or
sharing resources globally.
Sharing environmental
space
Their new report argues that technology alone
is not enough to achieve rapid decarbonisation. They
acknowledge that to manage the green transition globally
within a strict carbon budget, it will be necessary for
today’s richest countries to radically downscale their
resource and energy demands with near-zero growth in GDP.
This will clear the ecological and carbon space needed for
poorer countries of the Global South to continue growing
their economies, enabling a fast energy transition while
guaranteeing essential public services and a decent standard
of living to all people.
It is hardly a novel framing
of the issue, but the report emphasises how their
Sustainable Convergence Scenario entails a form of ‘class-based
reparatory justice’, in that the very rich—who have
benefited the most from fossil-based global economic growth
in recent decades—will primarily fund the Global Justice
Platform. What’s more, the proposal is somewhat aligned
with the concept
of climate equity, and effectively translates the
principle of ‘common
but differentiated responsibilities’ into quantitative
policies for addressing climate change.
Another
strength of the report is how it connects macroeconomic and
environmental projections directly to questions of
international institutional reform. It centrally highlights
the need for a broader overhaul and democratisation of the
global economic and monetary system, including the
reconstitution of the IMF into a United Nations Central Bank
that issues its own reserve currency. This would eliminate
the exorbitant privilege of the US dollar and other major
currencies that can borrow at much lower rates, ending a
massive reverse redistribution of wealth from Global South
countries to the Global North.
All other international
institutions would be governed by strict rules and equal
voting rights, further eradicating the special privileges
and veto powers of dominant nations. A new international
order would include the reform of World Trade Organisation
rules and a reset of dispute settlement mechanisms. And the
large financial resources allocated to the Global Justice
Fund would de facto underwrite a major restructuring of the
entire UN system, strengthening its many agencies, human
rights protections and international laws.
From
plutocracy to democracy
As the report affirms, these
proposals to transform global governance from ‘plutocracy
to democracy’ are closely related to many other existing
frameworks and initiatives. The Bridgetown Initiative in
2022, for example, also stresses the complementary role of
global wealth taxation and international monetary reform.
The UN Tax Convention process also focuses on democratising
the international tax system and curbing illicit financial
flows, while the G20 initiatives led by Brazil and South
Africa also champion global wealth taxes to fund climate
policies and green energy transitions.
There are
numerous other networks and organisations that aim toward
similar tax and governance reforms, such as the work of
Progressive International with their Program
of Action on the Construction of a New International
Economic Order. The Stiglitz Commission of 2010 and
Brandt Commission of 1980 are gladly cited by the Global
Justice Report as complementary discussions surrounding the
reform of the international monetary and reserve
system.
Above all, the report authors deservedly
mention the Roadmap
for Eradicating Poverty Beyond Growth—a major project
coordinated by the former UN Special Rapporteur on extreme
poverty and human rights, Olivier De Schutter, that puts
forward an exhaustive policy toolkit for building a global
economy with human rights and ecological justice at its
core. Thomas Piketty and many other prominent economists
have put
their names to this plan, which is one of the most
comprehensive policy documents of recent years to define
‘living well within planetary boundaries’ through
increased South-South cooperation, reparative climate
finance and support for universal social protection floors.
De Schutter’s pioneering proposal for a Global
Fund for Social Protection is arguably a less utopian
prospect for closing chronic financing gaps in low-income
countries, building upon existing structures like the UN’s
International Labour Organisation and seeking more
immediately viable sources of international
financing.
The operative question, as always, is how
the political conditions will arise to implement these
policies as an alternative to the far-right
techno-authoritarian vision being championed by reactionary
political elites and their billionaire supporters. It’s
certainly true, as Piketty and his team write
in a Guardian op-ed, that technical impossibility is not
what is standing in the way but rather “the absence of a
shared vision of social progress, at once concrete and
radical”. And both the Piketty and De Schutter roadmaps
make clear that formidable forces will oppose any
socioeconomic shift towards global sustainable convergence,
with the fiercest resistance coming from the
ultra-rich.
Both reports also briefly outline the need
to build countervailing power from the grassroots,
explicitly supporting collective action from progressive
political parties, labour unions and civil society
organisations. The Global Justice Report even gives its
conclusion the subtitle: ‘A global citizen movement for
social justice’, and it modestly proffers its analysis to
the broader collective mobilisation that is already (if all
too slowly) advancing at the world scale. So whatever
limitations and shortcomings these reports may contain, we
can only hope they spur the massive
groundswell of popular support that is urgently needed
to share the world’s finite resources before it’s too
late.
