Micro-salaries and Mega-salaries: Mega-inequality and Micro-development

Nicaragua’s economic history has been shaped by accumulation patterns that explain our underdevelopment. Enormous differences in salaries reflect an extremely unjust distribution of wealth that is also at the root of our poverty.

José Luis Rocha

Nicaragua is a country of brutal contrasts. To measure the income of Nicaraguans, we have to shift from the electron microscope to the sidereal telescope, from the millimeter to the kilometer, from a jeweler’s scale to a weigh station. Only an abusive metaphor could use the word salary to describe what both a field hand and a bank manager are paid. It’s something like indiscriminately calling both a pushcart and an eighteen-wheel truck a "vehicle."

Mega-salaries that guarantee
neither efficiency nor honesty

What is left of a revolution that sought to create more equitable access to basic services—health, education, water—is an even greater imbalance in the benefits, capacities and opportunities of the different social sectors. Physical signs of this imbalance include the example that the movie theaters that used to be scattered throughout the Managua sprawl are now concentrated in three shopping malls within the city core. But it doesn’t matter: tickets are too expensive for anyone who doesn’t have bus fare for a family outing anyway. The distribution of entertainment centers thus corresponds coherently to the distribution of income, and both express the resulting balance of power, the economy of power.

The most extreme and controversial elements of this balance have been the hugely disproportionate salaries paid to top-ranking state officials. Adding insult to injury, not even such mega-salaries have freed these career politicians from their criminal instincts by satiating their extraordinary voracity. Their sights are fixed unblinkingly on the mark: the state coffers.

People tend to give two arguments to justify the mega-salaries in Nicaragua’s public sector, the first of which is that if you want the most competent officials, you have to pay them well. Nonetheless, the country’s weak institutionality, the unbridled corruption, the pile of proposed legislation gathering dust and the state companies privatized because the state is supposedly a poor administrator—although curiously, only the abstract entity is so denigrated, not the concrete known administrators—suggest that these officials have been less than competent. The second argument, that these professionals must be compensated for the good salaries they give up when they leave private industry for public service, seems to have more basis, because private enterprise has considerably raised executive salaries in recent years. But this is nothing more than a reciprocal reinforcement or mutual justification strategy—two elements in the same inequality-perpetuating system.

Price Waterhouse Coopers’ mega-surprises

Since high salaries in the private sector are used to justify high salaries in the public, they are worth studying. A recent study by the Price Waterhouse Coopers auditing house on salaries in the business world revealed the bonanza enjoyed by executives in Nicaragua’s private enterprise. Price Waterhouse updates this information every year "to provide useful information, evaluate, analyze and compare current practice related to salary administration, evaluate trends in compensation granted to executives in the Nicaraguan context, update remuneration policies and plans, set compensation policies for top executives based on reliable information, carry out comparisons of basic wages and full compensation packages to facilitate hiring personnel, and evaluate a company’s remuneration levels relative to the predominant practice in the Nicaraguan context."

Price Waterhouse confidentially gathers and presents real current information on salary policies, levels and components, the total compensation package granted to top executives and sales personnel, and the different pay scales for other employees, including administrative staff and workers. The participating companies pay for the study to learn how their employees’ salaries stack up against others in the market, so they can make sure they are competitive: neither so high that the company incurs unnecessary costs, nor so low that its professionals are easy game for other companies. In fact, the study also serves to measure several correlations of forces in the Nicaraguan context, including consumers vs. oligopolies, workers vs. professionals, and mid-level professionals vs. top executives.

The most recent report, dated June 2001, is based on information gathered from 33 companies, 42% of them national and the rest multinational. The sample of 8,070 jobs is considered sufficiently representative of what happens in the national market.

As the report notes, a series of adverse factors hit the Nicaraguan economy starting in the second half of 2000, including higher international oil prices, the precipitous drop in the price of coffee (which represents a fourth of the country’s exports) and the failure of Interbank and Bancafé with the resulting impact on international reserves and public spending. Despite this, however, executive salaries reflected boom times.

The accompanying chart on annual remuneration compares executive salaries in the private sector in Nicaragua and its neighbor, Costa Rica, a more developed and wealthier country. On average, a general manager in Nicaragua earns US$12,000 a year more than his or her counterpart in Costa Rica. An assistant manager in Nicaragua earns nearly $25,000 more. Of the 16 posts listed in the table, 7 are paid considerably better in Nicaragua, although it is also interesting to note which positions are paid less in Nicaragua—for example, planning manager, internal auditor, quality control manager...

The Price Waterhouse study also revealed that 38% of executives in Nicaragua receive an annual bonus, 13% receive annual commissions and 9% are assigned a vehicle. These are substantial benefits, adding up on average to 184% of the regular salary. The annual commission represents 112% of the salary, the annual bonus 16%, vehicle expenses nearly 20%, housing nearly 8.5%, life insurance 2%, health insurance 3%, a "club quota" 2.4%, extra pay for meetings 13%, business expenses 6%, and other benefits 2%. The average cost of providing a vehicle to an executive, including depreciation, insurance, maintenance and fuel, amounts to over $15,000 a year, which would be enough to build four classrooms, as long as they are not built by the government’s Social Investment Fund. Not surprisingly, women tend to benefit the least from these benefits, since only 23% of Nicaraguan executives are women.

The ones who get the worst end of this deal are Nicaraguans as a whole and the minority shareholders in these companies. Nicaraguans are swindled because many of these additional benefits are listed in the books as company operating costs, which means they are not subject to taxation. In other words, the treasury does not receive a single cent from a large part of the executives’ compensation, so none of the economic bonanza they enjoy contributes to roads, schools or health care. This is quite simply a legal form of evasion.

The minority shareholders in the companies also lose out because many of the highly paid executives are also majority shareholders. Under this system, they skim off part of the company’s profits, making it less profitable as a whole although very profitable for a few individuals. In effect it’s a double play, reducing the company’s total profits to their personal benefit and paying themselves according to accounting procedures that allow them to avoid paying taxes. As can be seen, very few drops indeed spill over the top of the champagne glass to those waiting anxiously at the bottom.
Following the trail of underdevelopment’s paradoxes, we learn in the same report that Nicaragua was the Central American country where executives received the highest raises (74%) between 1995 and 2000. In other words, the region’s poorest country pays its executives the most and gives them the biggest raises. It is precisely in the poorest countries that salary differences are most keenly felt, even in the top strata, according to Price Waterhouse: "Among the best remunerated executive positions by country, we found to our surprise that Nicaragua and Honduras have the largest salary differentials (72.77% and 53.31% respectively) between the general manager and the other operating managers. The country with the lowest salary differential between these posts is Costa Rica, with a 7.35% difference."

Micro-financing institutions:
This is non-profit?

Such inequitable salary policies are gradually invading all spheres, including presumably non-profit micro-financing institutions that still depend to some extent on subsidies from international cooperation. A study on compensation in Nicaragua’s seven largest micro-financing institutions revealed that the general managers’ monthly salaries range from $1,600 to $5,000. In fact, three of the companies pay their general managers $5,000, which makes for an annual salary of over $60,000, more than any operating manager in Nicaragua and even more than an assistant general manager in Costa Rica. Here, too, they get additional benefits on top: six of the micro-finance companies provide life insurance to their managers, five provide a car, five award an annual discretional bonus, two give a bonus for children’s toys, and six pay for cell phones. Like the micro-finance companies, other non-profit associations are making bold mega-efforts to live up to these times.

Minimum wages far below the minimum

At the other extreme are the micro-salaries. These are for the micro-people, the Lilliputians, Nicaragua’s virtually invisible workers who provide the "abundant cheap labor" peddled to foreign investors as the country’s great asset. Managers in the free trade zone keep extolling this virtue, offering it almost pornographically, though even The Wall Street Journal has repeatedly pointed out that other factors are more attractive to many investors: citizen security, skilled labor and a labor code that limits the power of unions. These are the very factors that make those investors prefer Costa Rica.

Nicaragua’s agricultural sector pays a daily wage of 20 córdobas, or $1.45, the price of half a movie ticket in Managua or two beers or three quarts of milk or ten bus rides within the city. Economists have calculated that the purchasing power of this wage has dropped 30% in the last ten years. In other words, agricultural workers now earn only 70% of what they earned in 1990, despite the agricultural sector’s widely recognized contribution to the growth in our GDP and volume of exports.

The law requires even less than what the companies pay. The average national minimum wage comes to barely 30 córdobas a day, or $2.20, the price of six glasses of juice, or three bus rides from Managua to Masaya—a 17-mile trip—or three packs of cigarettes. Costa Rica’s minimum wage is $223 a month, or 7.4 times what it is in Nicaragua.

State mega-salaries:
Central American record

If Costa Rica is the Switzerland of Central America, Nicaragua—to judge by the salaries of our executives and loftiest state officials—must be a mix of Japan and Norway in the best of times. The most publicized case was Luis Durán, who as head of the Secretariat of the Presidency in charge of designing the country’s new Poverty Reduction Strategy earned $23,500 a month, far more than the income of most of the country’s municipalities. To give just one example, the municipal government of Siuna took in only half of Durán’s salary in 2000, and with that had to provide what services it could to a population of approximately 70,000 inhabitants.

Nicaragua pays the highest salaries in Central America to its President, Vice President, ministers and congressional representatives as well. The following table shows the salaries the Alemán administration paid to its ministers, compared to ministers’ salaries in other Central American countries. These are the official figures, although it is well known that the unofficial payments made "under the table" were much more generous than the official ones.

In the case of Costa Rica, we have used the highest figures provided by the various sources, which ranged from $1,200 to $3,000. Even so, Costa Rica is the only country in Central America whose ministers receive a monthly salary below the national per capita income. In the other countries, ministers’ salaries are much higher, with Nicaragua the extreme case. Here a single minister’s monthly salary represents just over two thousand percent of the average annual per capita income.

The salaries paid to executives and top officials in the public sector have no relation to the country’s economic situation. The dollar total of Costa Rica’s exports in 2001 was nearly eight times that of Nicaragua’s. While Costa Rica had a positive trade balance of $262 million last year, Nicaragua had close to a $1.28 billion deficit, holding true to a prolonged course of ever-increasing deficits. That same year, Nicaragua’s per capita GDP represented only 12% of Costa Rica’s. In other words, for every $100 earned by the average Costa Rican citizen, an equivalent Nicaragua citizen earned barely $12. And while Costa Rica’s per capita GDP increased nearly $240 last year, Nicaragua’s increased only $21.

Cuts in the "new era":
From mega-salaries to macro-salaries?

One would hope that in a minimally rational world—not even in Liebnitz’s best of all possible worlds—ministers’ salaries would reflect of the prosperity of the "national company" they administer. In Nicaragua, the situation is just the opposite. In another of the paradoxes of underdevelopment, bankrupt countries reward their bad administrators with the highest salaries. And we have not even begun to examine another matter, the technical capacity and demonstrated honesty of our ministers relative to their counterparts in Costa Rica, a reckoning that that would leave them in even worse standing. In this area, our problem is more structural and is related to the lack of a legal framework that would create a professional civil service to increase capacity, optimize expenditures on training and preserve institutional memory. All of this will remain impossible as long as the legislature refuses to act on the proposed Civil Service and Administrative Career Law. But even if it is passed, prospects for change will improve little, since the cultural roots of the problem go very deep.

Eduardo Montealegre, the new treasury minister, announced measures to correct these imbalances, including elimination of the official use of credit cards, prohibition of extra payments to public officials for attending the board meetings of state companies, and reduction of the per-diem scale for trips abroad (for example, for category A officials traveling to the United States, the per diem has been cut from $400 to $243). According to government calculations, these and other austerity measures will save over $5 million.

The most publicized measure announced was officially described as a 35% reduction in the salaries of the President, Vice President, ministers, deputy ministers, presidents of decentralized agencies and heads of the presidential and other state secretariats. The new government emphasized the very positive fact that "from now on everything will be above board," meaning that officials’ salaries will no longer be complemented from unknown sources, from the "black boxes" handled by previous governments. Nonetheless, civil society has demanded more detailed information on the specific contents of these measures.

Why the skepticism? The unnecessary, artificial separation in the monthly payroll between salary and stipend, far from clarifying things, has aroused doubts and conjectures about the real effect of the reduction, since they are technically the same thing, both theoretically subject to income tax. Furthermore, the salary table published by the government contains net salaries, after income tax and social security payments have been deducted. It turns out that the gross salaries of Nicaragua’s top officials remain the highest in Central America and comparable to those in developed countries, which contradicts the austerity plan announced by Bolaños’ government. People who are saying we’ve only gone from mega-salaries to macro-salaries hit the mark. (Compare the charts on the previous page.)

The legislature’s booty

However much good will the executive branch has put into its Austerity Plan, a government minister still earns 150 times more than a worker in the free trade zone. For its part, the legislature has made it clear in various ways that it will not touch either the representatives’ salaries or any of their other privileges, which together make up quite a booty.

In mid-February, after the executive branch announced its austerity plan, a national scandal erupted with the discovery—"discoveries" of corruption keep on coming—that the legislators have been evading taxes for years. The National Assembly representatives—there are currently 92, of which 90 were directly elected, plus Arnoldo Alemán, who got his seat through the pact, and Daniel Ortega, who got his by receiving the required minimum as a losing presidential candidate—earn $5,000 a month, but have been paying the ridiculous sum of $7 a year in taxes! The controversy had some effect and Alemán, as president of the Assembly, had to announce that "in this process of coming clean about representatives’ salaries, we’ll pay income tax on the full amount of our income from now on."
The breakdown of the monthly income of a legislative representative in Nicaragua is technically inexplicable. The $5,000 includes a nominal salary of $350 a month, which is the only part taxed, plus $1,800 in per diem and business expenses, and $1,500 to attend work meetings. On top of this, they get 200 gallons of gas a month. They also receive health insurance and other benefits that are not made public. And they enjoy a privilege that not even the President has: during their time in office, they can bring two cars into the country without paying taxes, an exoneration of nearly $5,000 per car per representative.

In addition to all this is the money the state gives to each representative for "community projects and scholarships." In the 2002 budget, this amounted to over $2.5 million, which represents over $27,000 for each representative. To top it off, the representatives decided to throw another $2 million into the pot this year, because of the privatization of the state telecommunications company ENITEL, which will give them each an extra $21,000 for these "projects." In other words, each legislator will administer nearly $50,000 with no controls or reports or accountability. Tax law expert Julio Francisco Báez was right to ask, "If the essence of democracy lies in local power, the municipality, why not allocate these funds to the municipal governments and let the legislative representatives devote themselves to the task for which they were elected, which is to produce legislation? It is scandalous that in 2001 the amount of money allotted to 92 legislators for their ‘projects’ amounted to 37% of that allotted to the country’s 151 municipalities."

The accumulation system: State booty

Attaining high public office has become one of the surest ways to accumulate capital in Nicaragua. The collapse of the Conservative Party in the last elections, when it was on the verge of becoming a legal umbrella for a third way that could have brought together a wide range of political options, was partly because the party’s power holders refused to give up their positions on the slate of legislative candidates, a gesture that would have demonstrated a genuine openness to other parties. They were not about to renounce the juicy monthly income they thought guaranteed, even though their stinginess and greed bankrupted the party and left them in the end with nothing.

There have been various accumulation systems in Nicaragua, most of which pass through the state. Elections, coups, intrigues, alliances with the United States—all these have at one moment or another paved the way to the presidential office, and from there to the state booty. It has happened time after time: the Sandinista piñata, the Chamorro administration piñata, the Alemán administration piñata, and all the piñatas before that, under Somoza, the thirty years of the Conservative Party, the Liberal Revolution…
Each piñata created a new elite and added more last names to the list of the chosen. The Sandinista revolution created its elite without getting rid of the already established ones—although it did make them migrate temporarily. The most conspicuous beneficiaries of that piñata are the Centeno brothers, finally being pursued for their role in Interbank’s fraudulent collapse, but they are not even the main ones. The real beneficiaries are waiting for the veil of history to cover over the genesis of their capital so they can join the nobility through the front door, so that just as a Jerez and a Borge sit down together now, a Pellas and an Ortega will be eating at the same table tomorrow.

Throughout our history, one of the main objectives of military subjection has been to take control of the state to reward the warrior, whose standing could be won in battles, intrigues or pacts. Another method of accumulation was the large agroexport plantation, but the origins of even that were only possible thanks to the state. It expropriated indigenous lands and sold them cheap or else conceded them at ridiculous prices under the pretext of promoting some point of national interest: first cattle, then coffee, now shrimp. In their capacity as businesspeople, politicians granted themselves land they promised to make produce on behalf of the country. To complete the picture, the state established regulations guaranteeing a regressive tax structure and accelerating the land concentration process. The present situation has not changed much from this history. We are currently witnessing the emergence of a new species of accumulators, the "executive entrepreneurs," a new race, although, again, it’s not so new if we consider the conditions that made it possible: oligopoly and nepotism.

Oligopoly and nepotism

It is clear that political loyalty allows access to high posts in the government no less than nepotism does. This long-demonstrated reality has been more than demonstrated, and is consecrated by custom, which determines the law in the absence of specific laws. But what happens in private enterprise, which supposedly sets the standard for the voluminous state salaries? Not all professionals are as well paid as the privileged executives in the first chart we presented. Many are called but few are chosen.

Top-rate professionals get jobs with big companies and might work hard for two or three years without a raise, when suddenly some recent graduate with a distinguished last name gets picked for the best post, with a salary well above the one generally assigned to the post. There is no need for a survey to reveal how this kind of manifest destiny cultivates a predestined caste of the elite and condemns us to social immobility. All we have to do is compare the last names of the board members—the largest shareholders—with those of the highest paid executives. They are the ones who receive part of their salary in bonuses, business expenses, payment for professional services in extra work and the like, thus reducing the company’s profits and swindling its minority shareholders.

If nepotism is the cultural basis, the oligopoly makes it financially possible. One or two companies control the provision of a certain service or the marketing of a certain product. With an absolute control over prices, their profits are fat. For example, only one company offers cell phone service in the two poorest countries in Central America: Bellsouth in Nicaragua and Celtell in Honduras. In El Salvador three companies provide the service, in Panama two and in Guatemala four. The prices reveal the results. While the post-pay plan costs $0.35 a minute in Nicaragua and $0.28 in Honduras, it only costs $0.09 in Costa Rica and $0.11 in El Salvador. Charges in the pre-pay plan are even higher.

Nicaragua’s oligopolies guarantee us the highest prices for a great many products, which creates another victim of the system: consumers, in addition to taxpayers and minority shareholders. The low-ranking employees are victims too, because both private enterprise and the public sector apply the Taiwanese management model, with high salaries for managers and starvation wages for workers. The resulting income distribution structure makes for mega-inequality.

Sunk in the abyss of mega-inequality

The chart below on income distribution is based on information provided by the national Living Standards Measurement Survey carried out by the Nicaraguan Statistics and Census Institute in 1998. It shows income distribution in Nicaragua by fifths, that is, from the poorest 20% of the population to the wealthiest 20%. The poorest 20% receive only 5.3% of total income while the wealthiest 20% get 51.3%.

In a country with a perfectly equitable income distribution, this chart would have a perfectly horizontal line. Conversely, the sharper the curve, the greater the inequality expressed by the chart. In the Nicaraguan case, the abrupt turn upwards in the fourth and fifth quintiles shows that a large share of the country’s income is concentrated among the wealthiest groups.

More recently, the United Nations Development Program’s annual Human Development Report for 2000, noted that the poorest 20% of Nicaraguans control only 4.2% of income while the richest 20% control 55.2%, which makes for a 13-fold difference between the income of the poorest and richest sectors of society.

At first sight, this does not seem so bad, placing us alongside Costa Rica. The richest earn 16.6 times more than the poorest in Honduras, 17.1 times more in El Salvador and 30 times more in Guatemala. The problem is that this difference in Nicaragua rests on a per capita GDP of less than $500. So the problem is not just that the cake is badly divided, we also have the misfortune to find that there’s no cake, just a cookie.

Utilitarianism: Champagne glass devotees

Like any situation that cannot elicit spontaneous consensus, unequal distribution of wealth requires justifications. It is not the case here in Nicaragua, where the law of the jungle—or perhaps a jungle without even a law?—makes ideas superfluous, but in many parts of the world many people have taken the trouble to think about the issue. The traditional justification comes from the utilitarian ethos, a view that dismisses the poverty of some individuals on the grounds that what matters is the good of the whole, the increase in the total sum of individual benefits. This view asserts that accumulation by some can produce more general well-being than would the equitable distribution of wealth.

The attraction of utilitarianism is that it offers a very simple principle based on which one can develop a consistent, complete definition of what is just. And for some groups, it has the advantage of justifying the accumulation and unequal distribution of income. According to this principle, it doesn’t matter how the sum of individual satisfactions is distributed.

The precepts in this ethics derive from the sole end of achieving the maximum net balance of benefits, arguing that the greater earnings of some compensate for the lesser losses of others. And although history has repeatedly demonstrated that this system does not lead to a maximum sum of benefits, some people cling to it. The Taiwanese model puts it into practice and its different versions are more widespread than even its own promoters suspect. Those who ascribe to it include devotees of growth for growth’s sake and those who stand by the champagne glass theory, metaphor for an economic program based on the idea that the accumulation of capital in the top strata of society will translate over time into benefits for the poor, because when the cup overflows, the accumulation will produce new sources of jobs and better salaries for the working class. It is not unlike the "trickle-down" metaphor. Utilitarianism is also a conception of justice that proposes that individuals can obtain together what they know they cannot obtain separately. In this way, accumulation can be presented not only as licit, but also as necessary.

"Like bees they saved and accumulated"

A quarter of a century ago, Swedish economist Assar Lindbeck observed that "attitudes towards inequalities, and the motives as well as consequences of trying to eliminate them, vary enormously among social scientists themselves. While many believe that inequalities are a great defect in an economic and social system, others see them mainly as a byproduct of a society’s success in offering individuals opportunities for self-realization, since the society can let the individuals freely choose between consumption and leisure, between present and future consumption, etc."

Over fifty years before that, Keynes found that 19th century Europe was organized in such a way that the largest share of income went to the class least likely to consume it, and believed that this explained capitalist accumulation, the source of investments and development: "The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption. In fact, it was precisely the inequality of the distribution of wealth that made possible the vast accumulations of fixed wealth and capital improvements that distinguished that age from all others. Herein, in fact, lay the main justification of the capitalist system. If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a régime intolerable. But like bees they saved and accumulated, not less to the advantage of the whole community because they themselves held narrower ends in prospect."

According to Keynes, the immense accumulations of fixed capital formed during this time "to the advantage of the whole community" would never have formed in a society in which wealth was equitably divided. The cake grew because Puritanism imposed upon the rich the duty to save and upon the workers the obligation to submit.

Four reasons why we are where we are

Nicaragua’s economic history does not fit this pattern in the least. Accumulation by the powerful groups has not led to the country’s overall development. There are at least four reasons why large capital accumulations have been channeled in other directions.

First, Nicaraguan capitalists—large, medium and small—have opted for ostentatious consumption rather than saving. And if this weren’t enough, they mainly consume imported goods, in a country with a growing trade deficit. At the first whiff of a rise in coffee prices, coffee producers rush to the bank to get a loan for another house on the beach or the latest model SUV or a first-class trip to Europe. Second, there have been abrupt and recurrent capital flights because of political changes. Third, there have been two successive transfers of capital goods in the last twenty years, through the legal mechanisms of confiscation, compensation and restitution. Consequently, many means of production have passed through the hands of three owners, some of whom had little if any administrative experience and were obviously inefficient. Fourth, the form of accumulation par excellence in Nicaragua— land concentration—has led to technological stagnation, since the availability of land inclines landowners to increase production by increasing the area cultivated rather than improving yield. This system of extreme concentration of wealth would have already failed resoundingly in any country in the world through a fall in demand, but in Nicaragua foreign cooperation and family remittances are there to save it.

The distribution of wealth is an ethical matter

John Rawls opposes the principle of utilitarianism with the contractualist doctrine, the Rousseauian view that a kind of social contract guarantees respect for certain rights and presupposes an original equality among the individuals who designed the contract. This concept is held by people of good faith who insist on the rule of law, minimizing the fact that, even in its purest form, the rule of law expresses a correlation of forces in which those who benefit most are those who strike first, in other words, those who began the 100-meter dash with a 40-meter lead.

The truly alternative view is one in which history is understood as the succession of different correlations of forces. In its most positive version, it projects increasing equality, even if we will clearly never reach the principle of "from each according to his ability to each according to his need." This view is an extrapolation onto the national level of the distribution mechanism within a family, where a common pot filled by the income of the adults sustains all members. In any event, this would be a more realistic view because it takes the complexity of human nature into account, does not see history as at an end and understands the current distribution as the ephemeral result of the balance of power at this moment.

The issue of the distribution of wealth has an ethical importance that makes powerful groups uncomfortable. This is illustrated by how effectively it has been swept out of the academic realm, where the currently predominant representations of reality provide technical or even climatic explanations for economic inequalities, but not historical or political ones.

Revelations

Nicaragua’s bottom lines in the production of well-being and distribution of wealth are quite revealing. They show the nonexistent negotiating capacity of the few unions that still exist. They show the rapaciousness of a certain strata of professionals and the correlation of forces in their favor. They show the emergence of a new model of accumulation, which is a step forward from the traditional state-booty model, even if it has not entirely broken free of that system. They show the siphoning off of money from international cooperation, and thus reveal why the $600 million a year that Nicaragua has received on average over the last decade has not mitigated poverty.

We should not be surprised that violence is increasing. If it is a question of conceptions of justice, there are plenty. The problem is when they face off in the street, as Colombian writer Fernando Vallejo explains in "The Virgin of the Hired Assassins": "How can people kill or be killed over a pair of tennis shoes, you the foreigner will ask. Mon cher ami, it’s not over the tennis shoes: it’s over a principle of justice in which we all believe. The one who’s going to be robbed thinks it unjust for someone to take his shoes because he paid for them; and the one who’s going to steal them thinks it even more unjust that he doesn’t have them."

José Luis Rocha is a Nitlapán-UCA researcher and member of the envío editorial board.

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