Inequality

= inequalities are avoidable, morally unjustified, hierarchical differences.

Typology

Göran Therborn:

"There are (at least) three fundamentally different kinds of inequality, and all of them are destructive of human lives and of human societies.

There is inequality of health and death, which we may call vital inequality. True, we are all mortal and physically vulnerable, and in some sense our life-tree is decided by some inscrutable lottery. However, hard evidence is piling up that health and longevity are distributed with clearly visible social patterns. Children in poor countries and poor classes die more often before the age of one, and between the age of one and five, than children in rich countries and rich classes. Low-status people in Britain die more often before retirement age than high-status people, and if they survive have shorter lives in retirement. A retired British male bank or insurance employee, for instance, can look forward to seven to eight more years of retirement life than a retired employee of Whitbread or Tesco (Financial Times, 20/21.10.07). Vital inequality, which we can measure relatively easily through life expectancy and survival rates, is literally destroying millions of human lives in the world every year.

Existential inequality hits you as a person. It restricts the freedom of action of certain categories of persons, for instance of women in public spaces and spheres, as in Victorian and Edwardian Britain, and as in some countries still today. Existential inequality means denial of (equal) recognition and respect, and is a potent generator of humiliations, for black people, (Amer-)Indians, women in patriarchal societies, poor immigrants, low castes and stigmatised ethnic groups. It is important to note here that existential inequality does not only take the form of blatant discrimination; it also operates effectively through more subtle status hierarchies.

Thirdly, there is material or resource inequality, meaning that human actors have very different resources to draw upon. We can distinguish two aspects here. The first is inequality of access – to education, career tracks and social contacts, to what is called "social capital". In conventional mainstream discussions this aspect is often referred to as "inequality of opportunity". The second is inequality of rewards, often referred to as inequality of outcome. This is the most frequently used measure of inequality – the distribution of income, sometimes also of wealth.

These three kinds of inequality interact with and influence each other. But it is useful to distinguish between them because, as well as having different types of effects on people, the different kinds of inequality have different trajectories in different periods – which means that they are governed by different causal mechanisms.

Inequality can be produced in four basic ways. First there is distantiation – some people are running ahead and/or others falling behind. Secondly there is the mechanism of exclusion – through which a barrier is erected making it impossible, or at least more difficult, for certain categories of people to access a good life. Thirdly, the institutions of hierarchy mean that societies and organisations are constituted as ladders, with some people perched on top and others below. Finally, there is exploitation, in which the riches of the rich derive from the toil and the subjection of the poor and the disadvantaged." (http://www.eurozine.com/articles/2009-10-02-therborn-en.html)

History

Peter Turchin on Kuznets Waves of Inequality

Peter Turchin:

Branko "Milanovic started his talk by describing several alternative views on how economic inequality evolves in the long term. Vilfredo Pareto’s theory was the simplest one: inequality stays constant at a high level. But we now have abundant data to show that this is not correct. Historically, inequality has changed quite dramatically, and thanks to Piketty and coworkers we now have good quantitative data to prove this point.

Simon Kuznets thought that the evolution of inequality follows an inverted U-curve. Or what might be called a Λ-curve. Although Kuznets did not have access to high quality data on incomes and wealth, we now know that he was correct in discerning that inequality increased during the second half of the nineteenth century, and then decreased during most of the twentieth century, until roughly 1980, which was of course many years after Kuznets wrote his 1955 article. But only 5 years before his death (I wonder, whether he had been able to comment on this second turn-around).

The rise in inequality in the last 30-40 years demonstrates that the inverted U-curve is not a correct description. This is where Branko steps in with his proposal that the dynamics of inequality is best described as repeated “Kuznets Waves.” The previous one, seen by Kuznets, ended in 1980, and now we are living through the ascending arm of the next one.

I think Branko is right, because my own historical work suggests that inequality goes up an down in a cyclic fashion. Our data, summarized in Secular Cycles, is of course nowhere near as detailed and quantitative as the data for the post-1800 period, which have been the subject of analysis by Piketty and other economists. However, it indicates that inequality moves in a predictable, cyclic pattern during each secular cycle. And it makes sense, because if inequality always grew, after 5,000 years of state-level complex societies it would have long ago reached the extreme, in which one individual owned all the wealth. This hasn’t happened, which suggests that there could be some kind of a dynamic feedback that would kick in when inequality got too high." (http://peterturchin.com/blog/2015/09/27/kuznets-waves-of-inequality/)