The Atlas of Global Inequalities. Ben Crow

The Atlas of Global Inequalities

R International trade is a powerful factor in determining the extent to which poor countries are able to share equally in global prosperity. The benefits of trade are, however, unevenly distributed, partly because industrialized countries maintain trade barriers in the form of high tariffs against goods from poor countries while maintaining mutually favorable terms with other rich countries. The percentage of total exports represented by manufactured goods is one indicator of prosperity. By this measure, countries in Sub-Saharan Africa and Latin America are falling behind. Although most industrial countries, including the USA, followed policies to protect their infant industries as they were industrializing, that route is now discouraged by international financial organizations, including the IMF and WTO, which promote free trade.

International Trade

This dissemination of global ideas in favor of free trade and against the protection of “infant industries” may have reduced the capacity of poorer economies to diversify and to promote industrial production. Some developing countries depend on a limited number of agricultural commodity exports, making them vulnerable to volatile and falling prices. Free trade ideas have done little, however, to restrain rich countries from subsidizing their own agricultural production, the surplus from which is “dumped” overseas, undercutting local producers. Power is also exercised by rich countries through the imposition of rules on intellectual property rights, making the transfer of technology expensive for poor countries, and raising the price of medicines, which adversely affects the health of the poor.

Globally determined commodity prices, and the high tariffs imposed by rich countries on imports from poorer nations, favor the rich and create barriers to trade equality.

R The ratio of government expenditure on the military to that on education and health is a rough but revealing indicator of social priorities. Local conflicts and global tensions have some influence on raising expenditure on the military and reducing the ratio between social and military spending, but so does an absence of governmental or societal concern for health and education. A small number of mostly small states have managed without overt military forces. In many cases, these countries also have high levels of social spending, often with markedly positive impacts on reducing inequalities and improving well-being. Some states, such as Costa Rica, manage to combine high well-being with relatively low government spending and low economic growth.

Budget Priorities

From the late 1970s, the rise of neo-liberalism, which seeks to minimize the role of the state and maximize the private business sector, encouraged governments across the globe to privatize state industries and reduce state spending. Healthcare, education and social security were disproportionately cut, while many states protected military spending. These ideas led to widespread austerity. An increase in inequalities followed, with women in many poor households taking on extra work to substitute for lost livelihoods, and to pay for education, health and social support. Social spending is higher in industrial countries than in the developing world, but better basic safety nets could prevent illness and other personal disasters causing a rapid descent into poverty for those living on a financial knife edge.

The proportion of GDP that governments spend on the military, healthcare, education, and social security provides one measure of their social priorities.

40–41 Gender R

R Diverse forms of government action, from wage laws to taxation, and the provision of education and healthcare to the redistribution of land, seek to address inequality. Such actions from those in power are usually in response to pressures, representations and movements from, among others, workers, minorities, peasants and women. They include a range of measures, both coercive and persuasive. Laws that set a minimum wage are one way of increasing the income of the poorest workers. They are likely to be more effective where people are formally employed in the industrialized sector, rather than in informal unregulated work and enterprise. Redistribution through progressive taxation, which taxes the better-off at a higher rate in order to reduce the tax burden on the poor, is used in many European countries, but is less

Government Action

significant in developing countries, where economic output is lower and tax systems are less extensive. Industrial development and a history of collective organization make fiscal redistribution more likely to be acceptable and effective. In the 1950s and 1960s, many developing countries undertook land reforms to equalize agrarian opportunities, and to increase economic growth. Some reforms, notably in East Asia, established significant rural equity. Innovative forms of action on inequality that have had some success in reducing poverty include cash transfers conditional upon children going to school. However, the way such policies are implemented, and lack of support at all levels of the economic and political order, may undo or reverse their effects.

In response to popular pressure, governments may attempt to reduce inequality through minimum wage laws, progressive taxation, and land reforms.

R Freedoms can be seen as both ends in themselves, and as means of achieving a fulfilled life. Democracy is a form of collective decision making in which participants are equal at some stage of the process, for example, when voting. Both freedom and democracy are complex, contested ideas which change over time, but even rough measures can provide an indication of significant inequalities between and within countries. National democracies exist within complex global systems that are not democratic. Although the UN General Assembly uses a system of one-government one-vote, which is an indirect form of representation, the UN Security Council only represents leading governments and a few others, without any pretense of democracy. Other global actors, such as corporations, similarly lack democratic accountability.

Freedom & Democracy

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