Global Inequality, Poverty and Justice: Empirical and Policy Issues

RAIMO VÄYRYNEN

The relevance of inequality

Observations about degrees of trends in global inequality have both conceptual and empirical dimensions. In addition, these dimensions of inequality have political, institutional and normative aspects that obtain added significance through their links with the process of globalisation. In fact, inequality has become a major issue in the debates concerning globalisation and its effects on individuals, social groups, regions and nation states. The merits of globalisation are assessed, to a large degree, on the basis of whether it enhances or diminishes poverty and inequality.

In effect, poverty and inequality have become major yardsticks of the legitimacy of the globalisation process. This is evident in the Millennium Declaration and the Millennium Development Goals (MDGs) enunciated by the UN General Assembly in 2000. A similar benchmark for the success of globalisation has been set up by the World Commission on the Social Dimension of Globalisation in its recent report.

Our primary concerns are that globalisation should benefit all countries and should raise the welfare of all people throughout the world. This implies that it should raise the rate of economic growth in poor countries and reduce world poverty, and that it should not increase inequalities or undermine socio-economic security within countries. (WCSDG 2004)

The Commission accepts inequality as a fact of life, but is opposed to its increase as a result of the opening up of national markets.

Most social theories consider equality as a necessary condition of the good life, or at least regard marked inequality as a hindrance to it. Obviously, in particular in liberal theory, equality is often confined to the political sphere, while the market system is expected to produce economic efficiency through some degree of inequality. In the past, social theories have focused primarily on the essential badness (but sometimes on the essential goodness) of inequality. Beitz (2001) notes this level of preoccupation with inequality as offering direct reasons for asserting fundamental ethical requirements. On the other hand, he speaks of derivative reasons that treat inequality as a bad thing, not in itself but because of its adverse consequences. It appears that, in recent debates, derivative reasons have assumed a central position. This ties in with the debates on globalisation, in which (in)equality is clearly a derivative reason that reflects the expansion of the market to most spheres of society.

Conceptual and ethical issues

The first issue to be addressed here is conceptual in nature: how terms such as inequality, polarisation, poverty and justice relate to each other. Inequality is a measure of how various assets are distributed within a given system of units: as a rule, the greater the share of the rich, the smaller the share of the poor; and the weaker the middle category, the greater the degree of inequality as measured by the Gini index and similar formulas. It should be borne in mind, however, that the same value of the Gini index can be obtained from different kinds of income distribution that may, moreover, have different political connotations. In addition, the Gini index, measuring aggregate inequality, is unable to detect changes in the underlying income distribution. Therefore, it can sometimes be justified to use simpler measures, such as the ratio of total income going to the richest and the poorest 20 per cent of the world population.

Polarisation comes close to the concept of inequality, although one can make a distinction between them by saying that polarisation seems to focus more on the upper end of the distribution of assets. The concept refers literally to a pole that constitutes a central point in the system around which assets are accumulated and other actors are organised. In that sense, polarisation is akin to the concept of accumulation that, though a collective term, singles out certain dominant actors that have been able to amass power and wealth. Polarisation, however, also refers more specifically to the lower end of the distribution, where resources have remained limited despite being shared by a large number of people.

Inequality, polarisation and accumulation are collective or contextual concepts; they cannot be applied to a single individual or group. This means that they are systemic concepts and have system-wide consequences. On the other hand, poverty is an individual concept; for instance, every single individual living on less than a dollar or two a day can be described as poor. Such an individualisation of poverty should not be taken too far, however. Poverty is also a systemic concept as it affects the entire community; the rich and poor cannot avoid their interdependence. This view has significant political and policy implications: poverty cannot be eradicated without considering the functions that poor people have in society and touching upon the privileges of the richest strata (Oyen 1996).

A focus on inequality also brings in the ethical dimension. Inequality hints at exploitation, an asymmetric transaction between parties in different power positions. The ethical approach refuses to accept the point that 'inequality is nobody's fault and cannot be fixed in our lifetime' (Birdsall 1998). In particular in the study of poverty, power relations are often neglected as they would raise the issue of guilt, pointing at those responsible for the prevailing state of affairs....