Think about the word inequality. The state of things being unequal, unfair, imbalanced. These words themselves are very ambiguous. They can carry a lot of meaning. Depending on the context we use one of those words in, we could mean different things. When two children play a game and one of them cheats, the other might shout ‘Hey, that’s unfair!’ meaning ‘that’s against the rules’ for example. When you want to split some cake in two smaller pieces and slice it in two different parts,
they are unequal, not the same. Things get a bit more complicated, however, when we talk about issues quite more important than a child cheating during a game, or you slicing yourself less cake than you wanted. Inequalities are everywhere today. We run into them every day – in the shop, at school, at work, in the street when walking, or while driving. Inequalities are engrained into our economic system too. In fact, they are an integral part of the world economy. For one to
have, another needs to not have. But this is a very simplistic explanation. Unfortunately, however, sometimes simplifications do not help us understand an issue, but only help us let this issue stay hidden. When we speak about inequalities from an economic perspective, there exist three major ones: income inequalities, wealth inequalities and inequalities of opportunity. All three of them are, in one way or another, related to one’s participation in the economy. For example, income inequalities are those types of inequalities where people earn different
amounts of money over time. Wealth inequalities relate to already owned wealth – in terms of real estate or any other type of assets. Inequalities of opportunity, in turn, relate to different opportunities because of societal or socio-economic factors, such as age, gender, background, location. All three types (of economic inequalities) are at play when it comes to economic issues. What is more concerning, however, is that somehow they are all very much enhancing the growth of the economic system we live in. Like economic
growth itself, economic inequalities are essential for the development of the world economy. Cynically put, for one to strive, another needs to suffer. But how did we get here? It is not like inequalities as we know them today have always existed. It is not like economic inequalities were always present, at least not as they are today. Inequalities are not the same everywhere either. While we are used to talking about inequalities within different countries, we rarely speak about the world on the whole.
Yes, that makes sense – we cannot compare a high income country to a low income country, they are simply incommensurable. A similar comparison would result in nothing constructive. To clarify, we cannot compare apples to oranges, as they are fundamentally different. But are they really? Both are tree-grown fruit, both are relatively sweet, or sour, both are rich in vitamins and minerals. They originate from roughly the same area – nowadays Kazakhstan for apples, and Northern India and Western China for oranges. So we
can compare them on a broader level. Yet, if we look into more specific characteristics, things are different. Oranges are usually not consumed with their skin, apples are less rich in vitamin C but have more fibres, and so on. It is the same with comparing a high income country and a low income one. depending on what the goal of the comparison is, we could indeed compare a high income country to a low income one. So, similar or different, each comparison can lead
to different outcomes, especially when we are aware of the differences we are comparing. But even if we can compare various countries, high and low income, this would only show us current developments. What is more important about inequalities, however, is to understand why they exist. Only then can one address them in a solutions-seeking manner. So the main question in understanding inequalities would then be ‘How did they come into existence?’ The world economic system as we know it today took a long time
to develop. Time full of extraction, exploitation, subjugation and the active creation of inequalities. Beginning with the rise of colonialism, the world economic system started developing in a way that the expansion of the economy was more important than the wellbeing of the ones within it. The subjugation of colonised to colonisers gave rise to a type of exploitation that would serve as the main driver of colonial powers’ economies for centuries after. The extraction of resources in colonised areas would actively under-develop indigenous peoples
living there, marking the beginning of their failures to integrate in a hierarchical world economy. The end of colonialism would then give rise to economic neo-imperialism, once again positioning former colonisers on top of the world economic hierarchy in their attempts to ”fix” former colonies’ politico-economic environment… Long story short, what we see today on a broader level as economic inequalities is the results of centuries of active economic under-development, all starting with the rise of colonialism. This has led to the divide between Global
North and Global South, and other allegedly geographical, but really purely geo-political divides, which continue to be used nowadays. Their usage itself is indeed problematic, as it enhances old norms and structures of exploitation and inequality. But all that requires more than a simplistic explanation using words like income inequality and others. In this part of Hidden from the Economy I shall be discussing the issue of inequalities. Not simply wealth inequalities, the Gini Index, or other barely politico-economically sensitive ideas. I will be looking
at the broader picture of the development of inequalities nowadays – how did we get to what we have in the world today from the perspective of economic inequalities? And, potentially, how should we address them? Or should we? Are they not just a necessary part of the development we are all trying to achieve? Are they not a step forward we all need to take, so that we get closer to wellbeing for all? I aim to answer these and more questions in the
articles to follow, but first, I will be looking at the history of inequalities. Because we can only devise sustainable solutions of a problem once we have understood the roots of it.
inequality, income inequality, wealth inequality, inequalities of opportunity, colonialism, neo-imperialism, Global North, Global South, Gini Index