The Ambiguous Crisis ofGlobal Economic Inequality:
Contradictory National and International Trends?
WUN Horizons in Human Geography Seminar SeriesNovember 11, 2008
Malcolm FairbrotherLecturer in Global Policy and Politics
School of Geographical SciencesUniversity of Bristol
Inequality: A Classic Concernin 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 it2. deny it’s a problem (esp. if poverty declining)3. deny it’s occurring4. attribute inequality to laziness/inferiority of the
poor5. deny the possibility of controlling it6. deny the advisability of controlling it7. 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, UKsmall 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 GrowingWithin-Nation Inequality
1. globalisation?2. skill-biased technological change?3. conservative/neoliberal/other policies?
Causes of (Probably) DecreasingBetween-Nation Inequality
• in other words, what’s causing growth in China and India (and some other Asian economies)? globalisation and/or neoliberalism?
Consequences of GrowingWithin-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)