Inequality is the issue of our time. The gap between rich and poor has ceased closing; instead it’s getting worse. That gap exacerbates every other problem we face, from climate change (poor people are hit harder, rich people are the major cause) to infectious disease (countries with weak health systems become reservoirs for infection). Thomas Piketty’s recent book, Capital, discusses the worsening gap and posts that it will continue to grow.

A new ActionAid discussion paper, “The Price of Privilege,” offers an activist take on the problem of global inequality. In summary, they state that “Most significantly, an inordinate amount of power is in the hands of the very richest. Whether in multi-party systems or in authoritarian dictatorships, they find a way to make countries’ social, economic, and political systems work in their interests.” They argue that the problem of global poverty cannot be solved while the resources of the planet are being hoarded by a tiny number of people.

After detailing the extent of the problem, they argue that inequality is not inevitable.

They offer six recommendations on how to address it: institute a wealth tax, recognize, redistribute and reduce women’s unpaid care burden, increase corporate democracy by implementing structural shifts towards employee control of companies, institute a maximum wage that is proportional to the wage paid to the most junior workers in a company, and limit private finance for political parties and political campaigns.

Actionaid’s description of the growth of global inequality is detailed, and disheartening. The carbon consumption of someone in the richest 1% is 175 times that of a person in the poorest 10%. These inequalities are rooted at the country and community level. In Pakistan, the top 5% of large landlords control over half of the country’s agricultural land. Their influence over local authorities deprives smallholder and landless farmers of their rights to land, water and credit. Inequality is also severely gendered. For example, in Sub-Saharan Africa and South Asia women earn 80% less than men. In 2010, women from contributed as much as $3 trillion in labor to global healthcare – nearly half of it unpaid.

The Price of Privilege, Quantified

These inequalities, they argue, are destroying the planet. “Poor women and men lose the local land that is their livelihood, because corporate land takeovers for biofuels, mining or export crops are permitted and encouraged by global donors and by national governments; in many countries this worsens centuries-old inequalities of land ownership. The links are becoming starker in this time of climate change, which is essentially caused by a global refusal to change economic ‘business as usual’.”

In a section debunking common myths about inequality, the paper argues that that inequality harms not only the poor and the climate, but the global economy. It cites IMF and World Bank research indicating that inequality actually harms growth. It also provides evidence against the concepts that the rich are “wealth creators,” and access to credit is inherently empowering to women.

Bringing an end to inequality, states the paper, will require an accumulation of collective action. “…many small movements around the world, dealing with the injustices and inequalities they find locally, need to take power back from those who have stolen it from their predecessors.” They describe a number of these small movements, ranging from efforts by farmers to stop land grabs to campaigns by women to reduce gender inequality. One success highlighted in the paper is the labor movement, described as one of the oldest and most successful efforts against inequality.

One possible way to reduce inequality explored by the paper is bringing everyone in the world up to an income of $10 a day. This would require approximately $3.6 trillion in redistributions from rich to poor, some of which would have to be international redistributions. This would, as the report states, change global consumption patterns at the high end of the economy. The hyper-rich would be downgraded to merely super-rich. This would certainly change the lives of the rich, but escaping extreme poverty would radically transform the lives of the people on the other end of the spectrum.

Another focus of the paper is learning from the experience of the 1950s to the 1970s, when many wealthy countries successfully reduced inequality. It lists four approaches that successfully reduce inequality: increasing government spending, taxing the very rich, regulating financial markets, and listening to the voices of workers.

Overall, considering its topic – one of the most severe problems of our time – the discussion paper carries a deep sense of hope. It covers a wide range of the policies and approaches that would actually reduce inequality if implemented, and it features the stories of people who are working to bring those policies and approaches about. We should not give up on reducing inequality, it argues, because we have the tools to bring change.

What it doesn’t say

This is one of the most candid, angry reports I have ever seen released by an international NGO. It also makes an essential point that is very rarely mentioned in the discussion of global development: ending poverty is inherently political, because poverty is caused by human choices.

One sentence takeaway

Inequality is very destructive, but there are ways to reduce it if people work together at the local level.

Discussion

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