{"id":149693,"date":"2019-12-16T12:00:13","date_gmt":"2019-12-16T12:00:13","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=149693"},"modified":"2019-12-23T11:02:00","modified_gmt":"2019-12-23T11:02:00","slug":"inequality-and-its-many-discontents","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2019\/12\/inequality-and-its-many-discontents\/","title":{"rendered":"Inequality and Its Many Discontents"},"content":{"rendered":"

\"\"<\/a><\/em><\/p>\n

3 Dec 2019<\/em> – Much recent unrest, such as the \u2018yellow-vest\u2019 protests in France and the US \u2018Abolish the Super-Rich\u2019 campaign<\/a>, is not against inequality per se, but reflects perceptions of changing inequalities. Most citizens resent inequalities when it is not only unacceptably high, but also rising.<\/p>\n

Even in the most egalitarian society, not everyone has the same income or wealth. Some inequality is widely considered inevitable, or even desirable to incentivize effort. But even excessive inequality is widely seen as fundamentally unfair. Even President Obama<\/a> described \u201cdangerous and growing inequality\u201d as \u201cthe defining challenge of our time\u201d.<\/p>\n

Take the case of two people in a country in 1980, one with an income of $1 daily and the other $10. Let us say that the first person\u2019s daily income is now $10, while the second person gets $100. Even though both incomes have increased by the same percentage, and \u2018relative\u2019 inequality between them has remained the same, \u2018absolute\u2019 inequality has gone up from $9 to $90.<\/p>\n

Inequality in historical perspective<\/strong><\/p>\n

Deidre McCloskey claims \u2018the Great Enrichment\u2019<\/a> over the last two centuries has seen per capita incomes rise ten-fold, benefiting most, if not all. In response, Jason Hickel has exposed<\/a> the Great Enrichment\u2019s slavery, colonization and violent displacement of indigenous peoples.<\/p>\n

A study found<\/a> that \u201ctoday\u2019s global income inequality levels are much higher than they were in 1820, irrespective if measured in absolute or in relative terms.\u201d<\/p>\n

Relative within-country inequality in 1929 was similar to 1820, decreasing during 1950-1970, before rising from 1975. Globally<\/a>, except during 1929-1950, absolute within-country inequality increased continuously, with large increases after 1950, growing faster after 1970.<\/p>\n

United Nations University (UNU-WIDER<\/a>) research found that both relative and absolute inequality increased substantially in North America, Europe, Central Asia, South Asia and sub-Saharan Africa during 1975\u20132010. But while absolute inequality also rose in Latin America and East Asia, relative inequality fell.<\/p>\n

The World Inequality Report 2018<\/a><\/em> revealed that the world\u2019s richest 1% obtained 27% of global income between 1980 and 2016. By contrast, the bottom half got only 12%. Today, more than half of humanity still lives on US$7.40 a day or less, barely adequate for a decent life.<\/p>\n

Oxfam\u2019s Reward Work, Not Wealth<\/a><\/em> reported that 82% of the wealth created in 2016 went to the world\u2019s richest 1%, while the 3.7 billion people in the poorer half of humanity got next to nothing. Oxfam<\/a> notes elsewhere that now, \u201cseven out of 10 people live in countries in which the gap between rich and poor is greater than it was 30 years ago\u201d.<\/p>\n

The recent period has seen the biggest increase of billionaires in history, with a new one every two days, while billionaire wealth increased by US$762 billion in the year to March 2017, an increase which could end global extreme poverty seven times over if well spent.<\/p>\n

Rising inequality\u2019s implications<\/strong><\/p>\n

Studying long-term data, Nobel laureate Simon Kuznets suggested that economic development first raises and then lowers income inequality with the shift from agriculture, presumed to be characterized by modest income disparities, to industry, with larger income gaps.<\/p>\n

However, the experiences of East Asian economies<\/a> during their early phase of industrialization challenged Kuznets\u2019 hypothesis. These economies grew quickly from the 1960s to the 1980s, without inequality rising. More recently<\/a>, progressive redistribution lowered inequality and accelerated growth during the 2003-2011 Latin American economic boom.<\/p>\n

Kuznets\u2019 hypothesis also implied that rising inequality is desirable because the rich save more of their additional income than the poor. Hence, income distribution favouring the rich should lead to more savings and investments, propelling growth.<\/p>\n

But land reforms in China, Japan, South Korea and Taiwan reduced inequality, enabling growth to take off. Meanwhile, over the centuries, high inequality in much of Latin America and the Caribbean \u2013 associated with colonialism, slavery and land ownership \u2013 has undermined growth.<\/p>\n

\u2018Inclusive\u2019 inequality?<\/strong><\/p>\n

Today, inequality is supposedly more \u2018inclusive<\/a>\u2019, with a growing global middle class even as national inequalities rise. Others term it \u2018positive-sum wealth production<\/a>\u2019, typically contrasted with \u2018zero-sum wealth extraction\u2019.<\/p>\n

Advocates decry<\/a> \u201cthe perception that billionaires make money for themselves at the expense of the wider population\u201d, attributing their fortunes to successful investments, while highlighting their philanthropy and patronage of the arts, culture and sports.<\/p>\n

Rutger Bregman \u2013 who chided<\/a> billionaires at the 2019 Davos World Economic Forum (WEF) for avoiding tax \u2013 has argued<\/a> that societies should not rely on the generosity of the rich. \u201cPhilanthropy is not a substitute for democracy or proper taxation or a good welfare state.\u201d<\/p>\n

Ambiguous politics of inequality<\/strong><\/p>\n

High and rising inequality is bad<\/a> for sustained economic growth and poverty reduction. As the 2018 World Inequality Report<\/em> warned, \u201cif rising inequality is not properly monitored and addressed, it can lead to various sorts of political, economic, and social catastrophes\u201d.<\/p>\n

Some of history\u2019s greatest thinkers \u2013 e.g., Plato and Aristotle \u2013 and classical economists \u2013 such as Adam Smith and Karl Marx \u2013 have emphasized the adverse effects of inequality on the social fabric. High and rising inequality is not only socially unfair, but negatively impacts political stability, crime and corruption, even undermining democracy<\/a>.<\/p>\n

Nobel laureate Joseph Stiglitz contends<\/a> that economic inequality \u201ctranslates into political inequality, which leads to rules that favour the wealthy, which in turn reinforces economic inequality\u201d; rising inequality inevitably subverts democracy.<\/p>\n

As Farhad Manjoo writes<\/a>, extreme wealth \u201cbuys political power, it silences dissent, it serves primarily to perpetuate ever-greater wealth, often unrelated to any reciprocal social good.\u201d<\/p>\n

A recent Oxfam study has shown the many ways Latin American politics has been captured by the super-rich, with substantial financial backing for many new ethno-populist, racist and intolerant religious leaders.<\/p>\n

The growing sense of vulnerability of many working people and seeming irrelevance of elitist social democrats have contributed to rising jingoist ethno-populisms in the rich West and elsewhere, blaming foreigners and other \u2018outsiders\u2019 for their problems.<\/p>\n

____________________________________________________<\/p>\n

\"\"<\/a><\/em><\/p>\n

 <\/p>\n

Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.<\/em><\/p>\n

 <\/p>\n

Go to Original \u2013 ipsnews.net<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

3 Dec 2019 – Much recent unrest, such as the \u2018yellow-vest\u2019 protests in France and the US \u2018Abolish the Super-Rich\u2019 campaign, is not against inequality per se, but reflects perceptions of changing inequalities. Most citizens resent when they are not only unacceptably high but also rising. Excessive inequality is widely seen as fundamentally unfair. Even President Obama described \u201cdangerous and growing inequality\u201d as \u201cthe defining challenge of our time\u201d.<\/p>\n","protected":false},"author":4,"featured_media":137930,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45,50,55,146],"tags":[232,354,610,109,996,287,329,985,380,1213,75],"class_list":["post-149693","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-activism","category-analysis","category-capitalism","category-economics","tag-capitalism","tag-economics","tag-inequality","tag-politics","tag-poverty","tag-power","tag-resources","tag-social-justice","tag-solutions","tag-super-rich","tag-world"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/149693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=149693"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/149693\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/137930"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=149693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=149693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=149693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}