Inequality: the scourge of the twenty-first century

ABSTRACT

Rising inequality is a ubiquitous problem, encompassing every geographical region and nation in the world. Inequality can be contended to have replaced unemployment as our most vital economic issue. After nearly six decades of declining inequality from the time of the First World War, the process has reversed itself with a vengeance, and we may be about to surpass the very high levels of inequality that prevailed in 1914. The causes are multifarious, including accelerating globalisation, plutocratic politics, excessive emphasis on ‘meritocratic’ pay, declining public expenditure, and social protection combined with the high rates of return on ‘capital’ compared to the overall economy’s growth rate. Inequality between nation-states may be declining because of the rise of China, but within countries, inequalities are increasing everywhere. Excessive inequality prevents social mobility and contains the seeds of social conflict and even civil wars. Most crucially, excessive and rising inequality makes democratic politics and governance unsustainable. High inequality may be a causal factor behind the decline of democracy and the rise of autocracy and populism that we are witnessing globally. In the ultimate analysis, the reduction of inequality necessitates wealth taxes.

KEYWORDS:

• Global inequality
• group-based inequality
• democracy
• governance

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 This statement is attributed to Priest John Ball in his sermon addressing the rebels of the Peasant's Revolts in England in 1381, a few decades after the Black Death (Magna Pestilencia) of 1346.

2 The term short twentieth century was popularised by the historian Eric Hobsbawm (1995). The pertinent dates are 1914 (First World War) to 1991 (dissolution of the Soviet Union) in the common era. The short twentieth century was preceded by the long nineteenth century, from 1789 (the French Revolution) to 1914.

3 We will utilise the term ‘capital’, with short quotation marks to denote the non-labour share of national income, the capitalists’ share.

4 This definition of ‘capital’ includes land or property ownership.

5 A term coined by Dani Rodrik (2017).

6 Relative, because income from work is nowadays becoming very unequal as anyone paying attention to CEO compensation knows.

7 In France, known as ‘Les Trente Glorieuses’, or the thirty glorious years (1945–1975).

8 This is not to deny that the wealth of the rich and super-rich of today also have many characteristics of rentier income.

9 Coincides with present-day Bangladesh and the Indian states of West Bengal, Bihar and Orissa.

10 For a discussion on deindustrialisation in the UK, see Singh (1977) and Cowling and Sugden (1994). For a detailed periodisation of the UK industrial policy and its deindustrialisation effects, see Coyle and Muhtar (2021) and Norris and Adam (2017).

11 King James version of the Holly Bible, http://www.holybooks.com/download-bible/.

12 For instance, schooling is a source of inequalities’ reproduction, but it is not a primary (original) source of inequalities (see Bourdieu et al., 1990. Breen & Goldthorpe, 2002). Banning private education as public policy could avoid creating additional reproduction sources of inequalities, e.g. wealthy people in private exclusive schools. Schooling also can help to mitigate income inequalities. However, schooling is not a ‘primary’ (original) source of inequalities due to wealth.

13 On Brexit see Bailey et al. (2023).

14 With apologies to Vladimir Ilyich Ulyanov better known as Lenin.

Additional information

Notes on contributors

Syed Mansoob Murshed

Syed Mansoob Murshed is Professor of the Economics of Peace and Conflict at the International Institute of Social Studies (ISS), Erasmus University in the Netherlands and the Centre for Trust, Peace and Social Relations (CTPSR), Coventry University in the UK. His research interests are in the economics of conflict, resource abundance, aid conditionality, political economy, macroeconomics and international economics. He was the first holder of the rotating Prince Claus Chair in Development and Equity in 2003. He was a Research Fellow at UNU/WIDER in Helsinki, where he ran projects on Globalisation and Vulnerable Economies and Why Some Countries Avoid Conflict While Others Fail. He also ran a project on The Two Economies of Ireland, financed by the International Fund for Ireland at the Northern Ireland Economic Research Centre (NIERC), Belfast. He is the author of ten books and over 170 refereed journal papers and book chapters.

Blas Regnault

Blas Regnault is a sociologist (Universidad Católica Andrés Bello, Caracas, Venezuela) with a master’s in public policies from Université Laval (Quebec, Canada) and PhD in Erasmus University of Rotterdam (The Netherlands). His dissertation focuses on the oil price trends and fluctuations determinants, developing an alternative explanation to the standard economics of oil approach; he focuses on monetary costs, institutional factors and business cycles. He also studies the impacts of oil rents on social inequalities and the performance of oil-exporting economies. His research interests also include the sociology of education and public education policies in Venezuela and Latin America.