Not unless we know what drives inequality
Inequality is not a given, a result of natural forces at play, said Professor Jayati Ghosh in the plenary session that kicked off the second day of the World Social Sciences Forum (held in the International Convention Centre, Durban, 13-16 September 2015).
Economics professor and executive secretary of the International Development Economics Associates, Ghosh was speaking on a panel with Dr JomoSundaram, the Malaysian economist who is assistant director general and coordinator for economic and social development with the Food and Agriculture Organisation of the United Nations and Dr Leith Mullings, Distinguished Professor of Anthropology at City University New York.
Sundaram dissected the history of inequality and noted that where you are in the world (for example, north America versus Asia) is a stronger indicator of your level of equality than your class: “Geography trumps class,” he said(then chuckled, “I’d better not use the word ‘trump’!”). This gives some insight into why migration is an ongoing phenomenon worldwide.
When it came to unpacking the Why of inequality, Ghosh outlined three major drivers globally.
The globalisation of finance, she said, has a number of consequences, not least of them increased fragility and exposure to economic cycles. “It creates the urge to fiscal austerity, not only in countries in down swings; belt-tightening is also seen as necessary in economies in surplus,” she said. Globalised finance also increases wage inequality: “At the bottom end, wages are stagnant or falling, but rising very, very sharply at the top end.”
There is an obsession with exports that results from the intensification of globalisation, she noted, a quest for economic stimulus from outside the country. This is a huge contribution to the ‘race to the bottom’, as countries become more competitive with each other and there are calls for greater labour flexibility and other factors which deepen inequalities.
The nature of global trade agreements, Ghosh said, had become “less and less about trade and more about other aspects” which see production process ‘liberalised’ – this is where developing countries suffer, as their comparative advantage lies in labour and the conditions for production.
Finally, the focus on controlling knowledge in the form of intellectual property rights has huge implications for development, as has the corporatisation of the media: “There are concerns about the way knowledge is increasingly corralled into support of power.”
Given these global drivers of inequality, the fundamental requirement was for a transformative vision.
Author: Sarah Van Der Ahee from HIPPO Communications.