Opinion – Michael França: The rich receive permanent transfers, while the poor depend on temporary transfers

Many things are not going well in the current stage of capitalism. Social mobility in many places is receding; several companies are enjoying broad market power and increasing influence in politics; the richest are appropriating an increasing share of the wealth built by the community and the family context tends to overlap with the individual effort in determining the results achieved in the lives of most citizens.

In recent decades, those outside the top of the social pyramid have progressively fallen behind. Technological advances are excluding workers with low levels of education from productive activities and increasing the wage premium for those with high qualifications. In several countries, the labor income of the middle class has remained stable, while that of the richest 1% has soared.

However, the educational gap between social classes alone cannot explain the widening of the deep gap that separates the rich from the rest. They also receive inheritances and other permanent transfers of resources from previous generations and the state. At the same time, while many beat their chests glorifying merit, a considerable portion of their assets was acquired through the legacy of third-party work and, not infrequently, through collusion with public authorities. Thus, at the top of the income distribution, a significant part of the money is not derived from labor income, but comes from inheritances and reinvestments.

This widening of income disparities has damaging side effects on the social fabric. It can negatively interfere with the rise of talented people while providing considerable advantages for certain rich people who, in addition to being mediocre, are not very interested in working for the common good. In turn, the sense of resentment derived from social injustices tends to catalyze populist policies that destroy growth and can become a powerful source of social unrest.

Disparities also interfere with the political process, generating too much power of influence for the elites and feeding back inequalities. At the end of the day, what moves the world is self-interest. The elites may even have the intention of creating interventions that expand the opportunities of others, however, in the midst of this process, they will hardly refrain from expanding their advantages, or even ending some privileges inherited in the course of history.

Furthermore, there is a technocratic illusion that makes many intelligent people believe that they can end poverty only with technical solutions designed by those who have always lived in high-income environments. However, the worldview can interfere in the conception of public policies that will really impact the citizen’s life.

The world is complex. Part of human knowledge comes from experiences. Individual and collective actions respond not only to incentives, but also to customs, beliefs and superstitions.

Without profound changes in the way Brazilian society works, it is likely that the richest will continue to receive permanent income transfers from other generations, while the poorest will be left with transitory and generally ineffective policies.

This text represents a summary of some discussions that I tried to carry out in these two years as a columnist. Thanks to Sheet for the space and for all the partnerships we’ve made so far; to Carlos Eduardo Lins da Silva for all the teaching and for having motivated me to write for the newspaper; and to the readers for their criticisms, suggestions and support.

Finally, in order not to lose the custom, and, in rhythm of the end of the year festivities, the text is a tribute to the song “Xibom bonbon”, performed by: As Meninas.