The International Monetary Fund against Inequality

The profound inequality in advanced economies has been one of the issues dealt with by the International Monetary Fund. Awareness of deep injustice, which has caused profound differences in income due to the rigors of fiscal policy and the tax burden on labor income for capital, has become a cause of concern because it can endanger social cohesion and thus have reflecting on a country's political equilibrium and leading to a contraction in economic growth. The phenomenon is typically Western or, in any case, advanced economies, given that, in a global context, inequalities indexes are reduced to developing economies; In this respect, the example of China and India is eloquent for the decline in income differences, albeit in a picture, which still has profound differences but which at the same time shows a tendency of ever less inequality. The problem of economies advanced economically is that they represent the world's largest market, so a reduction in the buying power of the middle and middle low class causes a contraction in trade. Only this factor should prompt an immediate response to governments in trying to remedy a situation that reduces internal growth and also tax revenue. However, the only economic reason is not enough to combat inequality, there are reasons for equity, which impose fiscal intervention that can redistribute resources, also overcoming the concept of allowing uniform benefits to social classes, but creating conditions instead of greater benefit to those social parties that have been penalized by economic crises, globalization and fiscal rigidity. It is undeniable that, until now, capital has enjoyed a shift to its benefit of overall income distribution. The need for an increase in average wages is no longer negotiable even to overcome the lack of social mobility, which is another element of inequality linked to the disparity in access to resources. The fact that the request for these measures does not come from extreme left-wing movements but from an international institution such as the Monetary Fund and is expressed as an alarm signal can not mean that the social situation of the advanced countries poses a danger to the stability of those same countries that are part of the richer economic systems, but only as a whole. In addition to solving the current situation, action must also be taken in the future, where the increase in automation threatens even worse times for the issue of inequalities. The current moment can foster reforms in the direction of reducing income differences, as the economic recovery seems to have become stable and therefore offers more room for maneuver to use the tax leverage. From a political point of view, redistribution of income, capable of leading greater equality, can ward off the affirmation of populist movements and parties and thus lead to greater awareness of democracy, which at times such as this may be likely to weaken. However, this situation was already evident even without the underscores of the International Monetary Fund, but its call must be a more motivation for governments to act in this sense, finally understanding that this is a question that can no longer be referred to. Otherwise, social cohesion and some growth in growth will be lost, and the lack of trust in the institutions will be lost, with easily anticipated negative consequences.