The Ambiguous Crisis of Global Economic Inequality: Contradictory National and International Trends? WUN Horizons in Human Geography Seminar Series November 11, 2008 Malcolm Fairbrother Lecturer in Global Policy and Politics School of Geographical Sciences University of Bristol

Inequality: A Classic Concern in the Social Sciences Marxism sociology economics geography?

Inequality: The Left-Leaning Social Science View pessimistic about reality, optimistic about theory  the rich get richer, the poor get poorer even worse: globalisation and neoliberalism  a growing/impending crisis of global inequality??

Growing Inequality: Conservative Responses 1.don’t talk about it 2.deny it’s a problem (esp. if poverty declining) 3.deny it’s occurring 4.attribute inequality to laziness/inferiority of the poor 5.deny the possibility of controlling it 6.deny the advisability of controlling it 7.deny that conservative/neoliberal policies are causing it

Two Types of Types of Inequality First types: desirable things that can be distributed unevenly  health, longevity, education, mobility, political rights, status, wealth, income… Second types: axes of social difference  ethnicity, gender, religion, citizenship status…

Global Income Inequality key decomposition (Firebaugh): within nation inequality  one-third of global income inequality between nation inequality  two-thirds of global income inequality

Source: NBER, based on tax data

Source: Nielson, Alderson, and Beckfield 2005 (from Luxembourg Income Study data)

Trends in Within-Nation Income Inequality, Mid-1990s to Mid-2000s (Source: OECD 2008) large increase: Canada, Finland, Germany small increase: Austria, Denmark, Japan, Norway, Sweden, USA no change: Australia, Belgium, Czech Republic, France, Hungary, Italy, Luxembourg, New Zealand, Portugal, Spain, Switzerland small decrease: Greece, Ireland, Netherlands, UK large decrease: Mexico, Turkey

Trends in Within-Nation Income Inequality, Mid-1980s to Mid-2000s (Source: OECD 2008) large increase: Finland, New Zealand small increase: Canada, Germany, Italy, Japan, Norway, Portugal, Sweden, USA no change: Austria, Belgium, Czech Republic, Denmark, France, Greece, Hungary, Ireland, Luxembourg, Mexico, Netherlands, Spain, Turkey, UK small decrease: France, Ireland, Spain large decrease: [none]

Trends in Between-Nation Inequality unweighted by population?  growing (definitely)  many small, poor countries not growing weighted by population?  shrinking (probably, a little)  heavily influenced by China and India  worldwide rate of absolute poverty declining

Global Income Inequality between nations, weighted by population:  declining (probably, a little) within nations:  increasing (definitely, in many but not all) overall:  hard to tell, but possibly decreasing

Causes of Growing Within-Nation Inequality 1.globalisation? 2.skill-biased technological change? 3.conservative/neoliberal/other policies?

Causes of (Probably) Decreasing Between-Nation Inequality in other words, what’s causing growth in China and India (and some other Asian economies)?  globalisation and/or neoliberalism?

Consequences of Growing Within-Nation Inequality? 1.more nationalism? (Solt 2008) 2.more corruption? (You & Khagram 2005) 3.lost biodiversity? (Mikkelson et al. 2007) 4.worse health? (Wilkinson & Pickett 2006) 5.less political engagement? (Solt 2008) 6.less economic development? (Sokoloff & Engerman; Acemoglu and Robinson; Easterly)

Consequences of Changing Between- Nation Inequality? ??? what if present trends continue? do effects of global inequality parallel those of within-nation inequality? should we be concerned about weighted or unweighted global inequality? growing influence of international media?

Final Thoughts inequality is worsening… in some ways  probably not a crisis… yet inequality appears to have a number of negative effects, but its full consequences are unclear its causes are also unclear (though we have some ideas) politics matters (even the OECD agrees)