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The Killing Fields of Inequality

by Göran Therborn

There are at least three quite different kinds of inequality, and they are all destructive of human lives and of human societies.

The first is inequality of health and death, what might be called vital inequality. Here, hard evidence is accumulating that health and longevity are distributed with a clearly discernible social regularity. Children in poor countries and poor classes die more often before the age of 1, and between the age of 1 and 5, than children in rich countries and rich classes. Low-status people in Britain die more often before retirement age than high-status people. Vital inequality, which can be measured relatively easily through life-expectancy and survival rates, destroys millions of human lives in the world every year.

The second is existential inequality, which hits the individual as a person. This kind of inequality restricts the freedom of action of certain categories of persons, for instance that of women and other marginalised groups in public spaces and spheres. This form of inequality means denial of (equal) recognition and respect, and is a potent generator of humiliations - for women in patriarchal societies, for indigenous groups in the Americas, for poor immigrants, for those of low caste, and for black people or stigmatised ethnic groups. It is important to note here that existential inequality does not only take the form of blatant discrimination; it also operates effectively through more subtle status hierarchies.

The third is material or resource inequality, which means that human actors have very different resources to draw upon. There are in turn two aspects here. The first is access to education, to career-tracks, to social contacts, to what is called "social capital" (in conventional discussions, this is often referred to as "inequality of opportunity"). The second is inequality of rewards (often referred to as "inequality of outcome". The latter is the most frequently used measure of inequality - the distribution of income, and sometimes also of wealth.

The production of inequality

Inequality can be produced in four basic ways:

* exclusion: meaning that a barrier has been erected making it impossible, or at least more difficult, for certain categories of people to access a good life.

* institutions of hierarchy: meaning that societies and organisations are constituted as ladders, with some people perched on top and others below.

* exploitation: meaning that the riches of the rich derive from the toil and the subjection of the poor and the disadvantaged.

* distantiation: meaning that some people are running ahead and/or others are falling behind.

The historical importance of these mechanisms in generating the configuration of the modern world is hotly disputed. It can be argued that exploitation, though the most repulsive generator of inequality and still a significant feature of today's world, is not the major force. A major role is played by organisations and societies that are permeated by subtle hierarchies of social status: these create inequality through their unequal allocation of recognition and respect, the limitations they impose on the freedom to act, and their impact on self-respect and self-confidence. The existential inequalities of these social hierarchies in turn have serious psychosomatic consequences.

In the course of the 20th century there was a substantial income equalisation in most western countries; but class differentials of life-expectancy widened, particularly among men. In 1910-12 an unskilled manual worker in England or Wales had a 61% bigger risk of dying between the ages of 20 and 44 than a professional man; by 1991-93 this extra risk of early adult death had risen to 186% (calculated from R. Fitzpatrick & T. Charandola, "Health" in A.H Halsey & Josephine Webb, eds., Twentieth-Century British Social Trends [Macmillan, 3rd edition, 2000]).

The hardest evidence for the lethal effects of status hierarchies is probably Michael Marmot's study of 18,000 Whitehall civil servants over twenty-five years (see Michael Marmot, Status Syndrome: How Your Social Standing Directly Affects Your Health and Life Expectancy [Bloomsbury, 2004]). The risk of early death closely followed the office hierarchy. When age, smoking, blood-pressure, cholesterol concentration, and a few other such factors had been controlled for, those at the bottom of the hierarchy died from coronary heart disease 50% more often than those at the top.

The barriers of exclusion have been generally lowered in the world over the last century. The exclusion of women - from public space, labour-markets, and career-ladders - has declined. Racism has become widely discredited, and the late 20th-century return to the mass migration characteristic of the late 19th century is also consistent with more inclusion.

Moreover, the regaining of national sovereignty by formerly colonised countries in the post-1945 period removed some barriers, and (for China and India in particular) opened up possibilities of development. There was virtually no economic growth in China and India in 1913-50; in 1950-73, China's annual growth was 4.9%, and India's 3.5% (see Angus Maddison, Contours of the World Economy, 1-2030 AD [Oxford University Press, 2007]).

But although lower than before, exclusion is still a major feature of the contemporary world - not least as it is divided into exclusive nation-states, each with its specific rights for citizens only. There are also other excluding processes at work - for example protectionism, such as in American cotton production which hits hard some poorer countries of sub-Saharan African.

The paradox of distance

The final mechanism of inequality, distantiation, is the most subtle of all: the mechanism or channel most difficult to pin down morally and politically. This is in part because it reveals a paradox of the age: in travel and technology, distances have shrunk enormously; yet in income and social indicators, distances are increasing both across the world and within many (if not all) countries.

In the first half of the 1970s, the distance in life-expectancy at birth between sub-Saharan Africa and high-income countries was twenty-five and a half years; by the early 2000s it was thirty years (see Human Development Report 2007-08 [United Nations Development Programme, 2007]). In Britain, the life-expectancy gap between the rich and the poor has been increasing by around six weeks annually since the 1980s (see Mary Shaw et al, The Grim Reaper's road map: An atlas of mortality in Britain [Policy Press, 2008). Within metropolitan Glasgow in the west of Scotland, the gap between males in the districts of Calton and Lenzie is twenty-eight years: larger than that between Britain and Africa in the 1970s. Russia and several of the post-Soviet states of central Asia and the Caucasus are now too falling behind in life-prospects.

GDP per capita in sub-Saharan Africa, measured in terms of domestic purchasing-power, was in 1973 about 8% of the United States's; by 2005, this had dropped to 5%. Within the US, the richest 1% appropriated an 8% share of total household income in 1980; by 2000, this had grown to 17%. In Britain, the richest 1% received 6% of all income in 1980; by 2000, the figure was  about 12.5% (see T Piketty, "Top Incomes Over the Twentieth Century: A Summary of Main Findings", in AB Atkinson & T. Piketty, eds., Top Incomes over the Twentieth Century [Oxford University Press, 2007]). The gap between the income of the richest and that of average workers is now much wider in these and many other states than in pre-modern times.

Another angle from which to view the new economic distance is the current world distribution of wealth. In March 2008, Forbes magazine listed 1,125 billionaires in the world who together owned $4.4 trillion (almost the entire national income of 128 million Japanese); by March 2009, the number of billionaires had fallen to 793, and they owned only $2.4 trillion (the entire national income of France) (see Luisa Kroll, et al, "The world's billionaires", 11 March 2009).

Such distantiation is the main route to increasing inequality today. Its effects are highly visible in ostentatious consumption; it also operates more through stealth than through assailable principles or blatant violations of human rights. It is not a causal force, but a true mechanism of inequality. A number of factors drive it.

There have been great increases in global income gaps because some countries have fallen behind. Russia and other countries of the former Soviet Union are victims of a ruthless restoration of capitalism, which has caused massive unemployment, economic insecurity, impoverishment and existential humiliation. The leading British epidemiologist Michael Marmot has estimated the death-toll of capitalist restoration in Russia in the 1990s as around 4 million people.

In addition, African countries have also contributed to distantiation, for complex reasons that include the legacies of colonialism and neo-colonialism and the continuing unequal terms of trade between the continent and most of the rest of the world.

There are also widening gaps in incomes within countries, which are driven mainly by increases at the top; though in the United States, the poorest 20%of the population has also seen a slow decline in its income since the late 1990s.  The fact that the income gap is due to those at the top running ahead rather than the poor falling behind means that competition from low-wage countries is a minor component. But it is worth noting that the trend towards income inequality is primarily an "Anglosphere" phenomenon (shared Canada, Australia, and New Zealand as well as the US and Britain; it has not been so evident in Germany, France, the Netherlands, and Switzerland).

Why is economic distance widening?

There seem to be two major processes at work. The first is the extension of solvent markets, which has increased both the pool of rewards and the competition for star talent. Three aspects of this - the lifting of controls on capital movements in the 1980s, the expansion of transnational investment, and the emergence of a global executive and professional market - have had the result of catapulting a small business elite upwards. A similar phenomenon has occurred in the arenas of sports and entertainments.

The second process is the increasing autonomy of financial capitalism from what is still called the "real economy". This is something particularly pronounced in Wall Street and the City of London, and their Anglosphere emulators. Since the late 1990s this has turned capitalist finance into a gigantic casino where the trade is in currencies, "securities", and "derivatives".

The amount of nominal money involved has become astronomical (see Saskia Sassen, "Too big to save: the end of financial capitalism", 1 April 2009). In early March 2009 the Asian Development Bank estimated that by then the value of financial assets in the world could have fallen in the current crisis by $50,000 billion, which is equal to the total value of the world's product in 2007 (see Gillian Tett, "Lost through destructive creation", Financial Times, 10 March 2009).

Inequality, so what?

Even those who accept that inequality is a fact and is increasing might respond: so what? Why does it matter? It matters because inequality is a violation of human rights. Few people are likely to argue that a society in which inhabitants of the most disadvantaged neighbourhood (Calton, in Glasgow) have on average a life-expectancy twenty-eight years lower than those in the most privileged ones (Lenzie in Glasgow, and Kensington & Chelsea in London) is a decent society. Is it a vindication of the superiority of capitalism that male life-expectancy in capitalist Russia is now seventeen years shorter than in Cuba?.

Social status hierarchies are literally lethal (see Richard Wilkinson & Kate Pickett, The Spirit Level: Why More Equal Societies Almost Always Do Better [Penguin, 2009]). The United States - the richest country on earth, and the most unequal of the rich countries - has,  the third highest rate of relative poverty among the thirty Organisation for Economic Cooperation and Development (OECD) countries; only Mexico and Turkey are ahead. The poorest 10% of the US population has an income well below the OECD average, lower for example than the poorest tenth in Greece (see Growing Unequal? Income Distribution and Poverty in OECD Countries [OECD, 2008]).

The turn of capitalist finance into a huge global casino has created the current economic crisis, and put hundreds of thousands out of employment, and is now demanding billions of pounds of taxpayers' money. In the global south the world crisis is bringing more poverty, hunger, and death (see Paul Rogers, "A world on the edge", 29 January 2009).

A growing social distance diminishes social cohesion. This in turn means more collective problems such as crime and violence, and fewer resources for solving problems like global warming. In this respect, an experience of the full power of inequalities is found in the violence and the fear of most South African and Latin American cities. By contrast, western Europe - that part of the continent east of Britain, west of Poland, and north of the Alps - is still the world's least inegalitarian area.

What is to be done?

In overall terms, income inequality is still governed by divisions between nation-states: some countries are rich, others poor. But increasingly, global inequality is to a large extent becoming inequality based on class and intra-state ethnic demarcations which cut through the cross-national ones.

"Globalisation", however, is not a convincing excuse for accepting inequality. A move towards global equalisation requires that the disadvantaged forces within inegalitarian countries are strengthened. This in involves two sets of processes.

The first is social inclusion, for example by bringing women and other subordinated groups into public space and labour markets in many parts of the globe. This has already contributed to changing the Creole coloniality of some of the Amerindian republics of Latin America, particularly Bolivia and Ecuador; though in general the issue of how to include the "first nations" into the polity of the 21st century remains on the agenda across the length of the Americas, from Chile to Canada. The European Union has also made a contribution, through the recent inclusion of an impoverished eastern Europe into its area of prosperity.

The second powerful tool to address inequality is redistribution and associated social compensations. Denmark and Sweden are the least income-unequal countries in the world. The Danish welfare state spends 28% of GDP on social expenditure, the Swedish 31%; while Britain spends 20% (see Society at a Glance: OECD Social Indicators [OECD, 2007]). Both these Scandinavian countries are heavily dependent on the world market: the export of merchandise makes up 35% of Denmark's gross national income and 40% of Sweden's - compared to 17% of Britain's.

But, pro-marketeers may ask, is such equality and generosity sustainable in the context of the world market? The irrefutable answer is yes. For many years, the Scandinavian countries have also been at the very top (together with the United States and Switzerland) of the Global Competitiveness Reports published by the annual World Economic Forum at Davos. Denmark, for example, was ranked third in global competitiveness in 2006-08, and Sweden fourth in 2007-08. Britain (under the New Labour government) had slipped from second in 2006-07 to ninth in 2007-08 (see Michael E Porter & Klaus Schwab, The Global Competitiveness Report 2007-08 [World Economic Forum, 2007]).

Such composite rankings must always be treated with caution. But the recurrent success of the Nordic welfare-states - with Finland ranked sixth and oil-Norway sixteenth out of 131 countries on a list of the most successful capitalist economies - indicates that generous, relatively egalitarian welfare-states are neither utopias nor protected enclaves, but highly competitive participants in the world market. In other words, even within the parameters of global capitalism there are many degrees of freedom for radical social alternatives. The lethal effects of inequality make the search for them imperative.

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