June 18, 2001

3:43 AM

The global distribution of income is becoming ever more unequal. One of the proposed solutions? More charity by the ultra-rich.
posted by schoolie (10 comments total)

Since the one article p;oints out that the divide between the rich and the poor is growing, and the second article points out that increasingly htere are more wealthy people, why not let nature take its course. Or trust in god.
We live in the best of all possible worlds.
posted by Postroad at 4:06 AM on June 18, 2001

This article is appearantly based on figures from the U.N. (World Bank), figures that the socialist Norwegian government earlier has found to be false in a report (PDF) of its own on the subject -- most of all because the U.N. appearantly doesn't adjust its numbers for purchasing power differences:

"UNDP has defended its method by referring to quality problems related to purchasing power-adjusted
data, and with some less clear arguments telling that the dollar value of a county’s income is more relevant for studying the marginalisation of poor countries in world trade and their power in international negotiations. There are certainly problems with purchasing power-adjusted income data, and they exist for fewer countries than those that are not adjusted for price differences. In spite of this, there is widespread agreement that adjusted figures should be used when comparing international income differences. Such figures are also used by the UNDP when they construct their Human Development Index (HDI).

Thus, the Norwegian report landed on a quite different conclusion:

With a more reasonable method, the conclusion is that inequality between countries in the world has been reduced since the mid-1960s. And even with the measure used by the UNDP, inequality across countries has decreased during parts of the 1990s.

Also note this:

Another possible objection to our conclusion on international inequality is that income is a too limited measure of living standards, and that other indicators of welfare should be taken into account. For this reason, Section 4 examines the development of other aspects of living standards, with focus particularly on life expectancy and education. Average world life expectancy increased from 55 years in 1962 to 67 years in 1997. The improvement was considerable for a number of poor countries. Part of the improvement can be attributed to
economic growth, but a substantial part of the increase was unrelated to income changes, and could be caused by global progress in medical technology and knowledge about diseases. In the former Soviet Union and in Sub-Saharan Africa, some countries have experienced a reduction in life expectancy after 1987, due to economic decline, conflicts or AIDS. On the whole, however, the trend during 1962-97 has been towards more global equality with respect to life expectancy.

This report is well worth a read.
posted by frednorman at 5:04 AM on June 18, 2001

Good link.

An interesting quote from within the Norwegian report:

Our conclusion on international inequality is based on a comparison across countries, and thus neglects inequality within countries. If we take inequality inside countries into account, and calculate an index of global inequality between persons, the results might be different. Some unpublished results of this type suggest that global inequality increased from 1988 until 1993.

As the report suggests, internal inequality isn't necessarily the best indicator of global economic trends, but it suggests that even in relatively poor nations, there's a widening stratification of wealth. Having seen the contrast between rich and poor in a city such as Delhi, I can back that one up. At least the conclusions suggest that economic growth "weakly" promotes greater equality.
posted by holgate at 5:54 AM on June 18, 2001

Are you sure, holgate? Another quote from the Norwegian report:

Research on inequality in countries reveals that rich countries have less inequality.

(emphasis mine)
posted by frednorman at 6:07 AM on June 18, 2001

I think we're actually making the same point, just coming from different sides. In the same paragraph, it notes that "Some results suggest that economic decline is more likely to cause increased inequality", citing Eastern Europe and sub-Saharan Africa. (Although the data is apparently quite unclear, which I can well imagine.)

It's perhaps stating the obvious to say that the poor suffer more from economic decline, but that also points to the most interesting correlation: that access to healthcare and education attacks inequality, raising life expectancy and underpinning the capacity to raise one's income:

...more money can buy better health but better health may also increase productivity and thus raise income. The same is even more true for education. Health and education are also inter-related, since knowledge about diseases and health is important and is affected by education ... There is thus a complex functional relationship between income, health and education.

It's an over-generalisation to say that healthcare (for instance, vaccination programmes, or access to clean water) and education are the agents of equality, but they're certainly vital foundations, and perhaps the best way in which economic success can be "trickled down" to the poorest. They're also the first things to be affected in times of downturn. Which is why Bill Gates's philanthropic heart is in the right place, no matter what you think of his business sense.

[I'd use blockquotes, but I can never get them to work without mucking up the MeFi formatting. All help gratefully received.]
posted by holgate at 6:40 AM on June 18, 2001

[Blockquotes actually work just fine when you *post* them, it's just in the preview mode they appear to muck things up. Quite scary, though, indeed.]
posted by frednorman at 6:45 AM on June 18, 2001

[ah, thanks. breaking the formatting on MeFi is like breaking the build on a source tree.]
posted by holgate at 6:50 AM on June 18, 2001

If only Bill Gates was a beautiful young woman.
posted by kv at 9:20 AM on June 18, 2001

tyler durden, we need you.
posted by will at 11:47 AM on June 18, 2001

I still don't understand why global inequality growing is a bad thing, as long as the PPP is going up everywhere. For instance, say you and your friend both had '84 Civics. A year later, you had a brand new Mercedes, and your friend has a '90 Accord. The inequality in your 'wealth' is far greater, but you're both better off, which is the goal after all, isn't it?
posted by Kevs at 5:01 PM on June 18, 2001