In this Global Labour Column, Christian Kellermann outlines a progressive Plan B for the world economy which could give birth to a form of ‘decent capitalism’, respectful of the environment, not marred by recurring crises and characterized by limited levels of inequality. In his view, the heart of the problem with crisis-prone financialized capitalism lies in the multifaceted (and deepening) inequality which it has sustained. He argues that ‘income distribution has three important components: functional distribution of income in wages and profits, distribution within the national wage sum and the national profit sum, and state redistribution policy’ – and proposes to tackle these three fronts at once. First, ‘the structures and rules of the game in the financial sector must be changed in such a way that the profit mark-up falls again’, thus increasing the share of wages. Then, ‘unjustified income inequalities among wage earners must be dismantled by means of labour market reforms’ – and the conditions which have allowed for an unprecedented growth of the low wage sector since World War 1 should be dismantled. Last, tax law should be re-oriented in a progressive manner (which smoothes after-tax income); as Kellermann rightly points out, this will primarily depend on ‘regulations which ensure that incomes from capital are adequately taxed’. After the recent pronouncements by Buffett et al, one could dream that a window of opportunity is opening at least for the latter part of the Plan B.

This brief is written by Global Labour Column and edited by CSID at Wits University.