Global Inequality

Inequality is on the rise. The rich are getting richer whilst the poor stay poor. This is not only true within countries such as the UK and the US but true between countries. We can all generally understand what global inequality is, but how do we begin to study it? how did this global inequality come to be and why does it continue? Moreover, how can we attempt to fix it?

If you're intrigued, we will be looking at:

• The meaning of global inequality - including examples and how to measure it.
• The debate and issues surrounding global inequality.
• Theories on global inequality.
• The causes of global inequality.

Inequality can be defined as...

Debates and issues on global inequality

Global stratification refers to the unequal distribution of wealth, power, prestige, resources, and influence (United Nations Development Programme, 2005). Global inequality is a result of this stratification.

Worldwide, there is an unequal distribution of resources among countries, creating not just global inequality but a hierarchy of countries. As a result, citizens of different countries experience different living standards, health outcomes and life chances.

At the same time, industrialised countries have greater amounts of wealth than less industrialised countries.

When sociologists explore global inequality, they’re intrigued by structural matters. They’re also intrigued by questions such as:

• How did wealth become concentrated in the hands of a few?

• How are inequalities played out within and between countries?

• And how does this affect the opportunities of individuals in poorer or less developed countries?

Fig. 1 - Sociologists are interested in how global inequality came to be.

Colonialism and global inequality

Global inequality has been exacerbated by historical events, disputes, and exploitation.

One notable event studied extensively in sociology is colonialism, in which European colonising powers shaped modern inequality by appropriating wealth, resources and labour from various nations in Asia, the Middle East and Africa to develop their own economies. Many European nations (Britain, France, Belgium, and Spain) created colonies in countries that only gained sovereignty in the 20th century.

In Europe, the wealth created by colonialism led to the conditions that allowed the Industrial Revolution. Social theorist Karl Marx argued that colonialism was necessary to move a society from feudalism to capitalism.

Most Western societies have an industrialised focus and are at the top of the global socioeconomic hierarchy. Citizens of these nations reap a higher living standard than those in less industrialised nations.

However, while colonialism has undoubtedly been a factor, as you'll see below, it is not easy to agree on all the causes of global inequality.

What are the causes of global inequality?

There is no precise answer to this question. Max Weber coined the term 'life chances', describing how likely someone can reach success when considering certain factors. The following few sections will explore some factors that affect the life chances of global citizens and contribute to their inequalities.

For example, areas of global inequality in society today would be gender, wealth and employment, health and education. How we explain this unequal distribution of resources will affect what we consider the cause.

Let's look at how understanding underdevelopment via several theories (modernisation theory vs neoliberalism vs dependency theories) affects how we understand the cause of global inequality.

Theories on global inequality

Let's now have a look at some theoretical views on global inequality.

Modernisation theory and global inequality

Modernisation theory and Walt Whitman Rostow's (1960) model of economic growth understand underdevelopment as a lack of internal values and ideas that are inducive to economic growth and development. The causes of global inequality are linked to how their society is currently structured.

Examples include:

• unindustrialised, subsistence farming

• traditional values holding back change

From this perspective, global inequality exists because these countries have not yet embraced Western (capitalist) ways of developing.

The thinking goes that only when these countries have internally adapted how their society is structured will they start to experience equal income, health, and education. This is because they will finally have the economic resources to do so.

Neoliberalism and global inequality

Whilst modernisation theory looks at the internal values and culture of a nation to determine why it is underdeveloped, neoliberalism argues that it is more their economic principles and strength of governance. These two factors lead to underdevelopment and high levels of global inequality. Specifically, neoliberalism states that a country must create strong, ethical and non-corrupt forms of governance and adopt economic policies that reduce the state's role in the economic market. Underdevelopment occurs because government officials misuse their country's revenues. The state is inefficient in developing and expanding industry, trade, and other forms of social development, i.e. creation of schools, provision of healthcare, energy, housing, and clean water.

Collier's 'bottom billion' theory and global inequality

More a 'neo-modernisation' theorist, Paul Collier's (2007) 'bottom billion' theory is arguably a more nuanced view of global development. He explains global inequalities in an approach that combines some elements from both neoliberal thinking and modernisation principles.

Collier sets the scene by highlighting that though most of the developing world has experienced relatively high increases in wealth and income levels in the late 20thcentury, 60 countries - home to 1 billion people - have not shared in this development at all. For Collier, that is due to possessing a combination of one or more 'development traps'. Let's have a quick look at each:

The conflict trap

Collier highlights that war and conflict act to keep those countries from developing easily. In particular, civil wars cost an average of $64 billion which could have otherwise been spent in other areas, such as education, healthcare facilities, or industrialising their economy.

Once a country has engaged in civil war, it makes further war even more likely. It is a 'development trap' because there is a reciprocal relationship between poverty and conflict. Poverty breeds conflict; prolonged conflict breeds further poverty.

The natural resource trap

Also known as the resource curse, this trap highlights how countries rich in natural resources often are worse off than countries that are not. Though current literature debates whether the 'resource curse' even exists, Collier argues that an abundance of natural resources:

• leads to conflict, as corrupt governments exploit these for their own benefit.

• can result in Dutch disease - this is where their currency becomes inflated, making other industries and their products globally uncompetitive.

Landlocked with bad neighbours

The argument here is simple. Landlocked countries (surrounded by land, with no access to sea trade routes) are only able to trade with their neighbours. If these countries neighbour poorly governed nations, or countries that lack the infrastructure to export goods globally, many landlocked countries find it impossible to tap into the global economic market.

Bad governance

The fourth trap for Collier is to do with poor governance. Specifically, countries that are governed poorly either through ineffective economic and social policies or through high levels of corruption can destroy an economy very quickly. This is most felt in smaller countries whose economies and industries are already not very substantial.

Collier's solutions to global inequality

In response to the 4 development traps that lead to global inequalities, Collier proposes 4 institutional changes.

1. Establishing aid agencies focused on the most difficult nations

2. Better governance, including greater accountability to taxpayers

3. Higher taxes on natural resource profits

4. Investment diversification

Dependency theory and global inequality

On the other hand, dependency theory (Andre Gunder Frank, 1971) and world systems theory (Immanuel Wallerstein, 1979), both Marxist theories of development, understand underdevelopment and global inequality as a consequence of external, political and historical causes.

From this perspective, the causes of global inequality are linked to the exploitation of developing countries' natural resources and labour by developed nations.

Specifically, exploitation occurs through the legacy of colonialism and neo-colonial policies brought in by modernisation principles and a capitalist global economic system.

Stratification and social inequalities

It is important to note that inequalities can also exist within a society, not just between different countries. Even within one country, two individuals in the same occupation may not be treated equally. This can be seen when we divide by demographic variables.

A person can be stratified due to factors such as:

• Income

• Wealth

• Social class

• Ethnicity

• Gender

• Sexual orientation

• Religion

• Disability

• Age

Fig. 2 - Levels of Income Inequality within each country, Max Roser and Esteban Ortiz-Ospina, ourworldindata.org

Fig. 3 - Men and Women may be born equal, but are we treated equally? Esteban Ortiz-Ospina and Max Roser, ourworldindata.org

To understand the causes of these... well, that's for another article.