The shocking results of the world’s wealth divide

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Steven Pinker, a Canadian psychologist and author, has proposed the controversial stance that inequality is not inherently bad. He argues that we should focus on questions of poverty and unfairness which are tied to the discussion around inequality, rather than inequality as a concept.

The results of research by international NGO Oxfam might end up proving his point. While the Oxfam report argues that wealth inequality is causing poverty and misery around the world, it points to a reality in which inequality is not the main problem, but it certainly exacerbates poverty and misery.

The shocking results of the worlds wealth divideOxfam found that the world's billionaires saw their wealth increase by 12%, while the poorest 3.8 billion people on the planet lost 11% of their wealth in the last year.  All of the wealth those 3.8 billion people have adds up to the same amount held by the 26 wealthiest people on the planet.

However, those stats don’t tell the whole picture. The number of people living on less than $1.90 a day – the World Bank's line for extreme poverty – has continued to drop. Despite the fact that 3.4 billion people still live on less than $5.50 a day, which is the benchmark for extreme poverty in an upper-middle income country, this is a much lower number than seen in previous decades. The big but is that while the number of people on the breadline has been reduced, lack of public services is leading to more people dying from poverty.

“This is a direct result of inequality, and of prosperity accruing disproportionately to those at the top for decades. The World Inequality Report 2018 showed that between 1980 and 2016 the poorest 50% of humanity only captured 12 cents in every dollar of global income growth. By contrast, the top 1% captured 27 cents of every dollar,” the report states.

According to Oxfam, ever-decreasing tax rates on high incomes and corporations are causing the bulk of the problem because lower taxes for those who earn the most means less money to pay for public services. Around 10 000 people die daily due to lack of proper medical care, 262 million children are not allowed to go to school for lack of funds, and the poorest women on the planet do millions of hours of unpaid care work, the report says.

The fact that the extreme poverty rate in sub-Saharan Africa has started to increase comes as no surprise, but the data from what Oxfam refers to as “devolving” nations are unexpected. For example, a black child born in the United States is more likely to die before their first birthday than a child born in Libya, all because of lack of access to social services.

Oxfam proposes a wealth tax placed on the top 1% of income earners, which it estimates would provide around $418 billion dollars annually – enough to ensure that every child on the planet has access to an education. The organisation also argues for universal health care and education, an end to privatisation of public services, public pensions and child care, and investments in public utilities.

In theory, the wealth tax would hardly make a dent in the fortunes of the world’s richest people, but would change the lives of billions of poor people. Even though the Oxfam report categorically states that inequality is a political and a policy choice, and to beat poverty, we must fight inequality, its own figures point to the veracity of Pinker’s argument.

In his book Enlightenment Now, Pinker cites philosopher Harry Frankfurt to explain his stance:

“Frankfurt argues that inequality itself is not morally objectionable; what is objectionable is poverty. If a person lives a long, healthy, pleasurable, and stimulating life, then how much money the Joneses earn, how big their house is, and how many cars they drive are morally irrelevant. From the point of view of morality, it is not important everyone should have the same. What is morally important is that each should have enough.”

If the tax on the richest 1% proposed by Oxfam was passed, the side-effects of poverty would be alleviated. If the world were to take the next step to a universal basic income, people would be guaranteed to have enough money to survive. In this utopian scenario, Pinker’s argument would be put through its paces, and human beings across the globe would have the freedom to pursue philosophical questions about the nature of inequality vs the nature of poverty and their effects. Until that day, however, the chasm between the world’s richest and poorest will remain insurmountable, and the dream of a “long, healthy, pleasurable, and stimulating life” for everyone will remain just that – a dream.

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Crown Publications, one of South Africa’s largest business-to-business publishing houses, came into existence in 1986. Since then, the company has grown from producing a single magazine, Electricity SA (renamed Electricity+Control), to publishing six monthly magazines, three quarterlies, and a number of engineering handbooks.