Hot! Inequality, the byproduct of progress

TheGlobeandMail.com – commentary
Oct. 14 2013.   Konrad Yakabuski

Like most developed countries, Canada is immersed in a potentially explosive political debate about the widening gap between the very rich and everyone else. While the discussion is warranted, much gets overlooked in the narrow focus on domestic income statistics.

For starters, incomes are hardly the only measure of our quality of life. First-rate public education and health care mean that Canadians, regardless of income, are relatively more equal than almost any people in the world. Most of the goods and services we buy are relatively cheaper and more reliable than ever. In general, our lives are richer, even when our pay stubs seem smaller.

What most often gets omitted in discussions about growing income inequality within rich countries, however, is the extraordinary and corresponding increase in global living standards. In only a few decades, hundreds of millions of people have joined the middle class, poverty has receded and the gap in health outcomes between rich and poor nations has contracted.

This is the opposite of what was predicted 50 years ago, when most economists warned that a global population explosion would produce unprecedented poverty and suffering. Instead, as Princeton University development economist Angus Deaton argues in The Great Escape: Health, Wealth and the Origins of Inequality, our planet “is a better place than at any time in history.”

“Not only has the world added four billion people over the past half-century,” Prof. Deaton writes in his new book, “but the seven billion who are alive today also have, on average, much better lives than their parents and grandparents.”

The “great escape” from disease and deprivation is largely a story of globalization, which has expanded opportunities for more lucrative livelihoods and increased access to the knowledge and technology needed to “dig the tunnel” out of poverty. But of late, it must be noted, it has also contributed to the slower middle-class wage growth driving income inequality in rich countries.

Prof. Deaton is no capitalist cheerleader. In The Great Escape, he dons the hat of an economic historian to provide a fresh perspective on the march of human progress (and its pitfalls) that should inform our current debate about income inequality.

The first observation is that inequality is an inevitable byproduct of progress. “The move to agriculture,” Prof. Deaton writes, “made it possible to grow more food, but it also brought new diseases and new inequalities as hierarchic states replaced egalitarian bands of hunter gatherers.” No one would argue, however, that mankind was better off living in caves.

Similarly, only the aristocracy of 18th-century England could afford new medicines, creating a massive gap in life expectancy between rich and poor. But no one would have thought of banning the new drugs just because their benefits were at first unequally distributed. Eventually, as they became available to all, life expectancies converged.

The decline in global health inequalities since 1945 has been most striking. Non-communicable disease is now the leading cause of death everywhere except Africa. Reduced infant mortality has freed women from the burden of endless pregnancy – since they do not need to be pregnant as often to have the same number of children who survive – and the agony of watching their babies die. “It also frees them to lead fuller lives in other dimensions, becoming more educated, working outside the home and playing a fuller role in society.”

While malnutrition remains widespread, Prof. Deaton notes that people are growing taller almost everywhere. And because “cognitive function develops along with the rest of the body,” they are also likely growing smarter. More than 80 per cent of the world is now literate, up from about 50 per cent in 1950.

About a billion people still live in destitution, however. And those who have escaped, as Prof. Deaton puts it, have a moral obligation to help those who are still imprisoned. But he thinks that foreign aid is harmful and that rich countries would do better by lifting trade and immigration restrictions.

Prof. Deaton also believes that income inequality within rich countries, especially the United States, is a serious problem that threatens to undermine democracy and growth by “stifling the creative destruction that makes growth possible.” But he expresses cautious optimism for our future, mainly because the ingrained human desire to escape is too powerful to be suppressed.

“People may block the tunnels behind them,” he says, “but they cannot block the knowledge of how the tunnels were dug.”

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1 Comment

  1. Living in a capitalist society, Canadians hear that the gap between the rich and the poor is growing. But do we do anything about it? I agree with the author in the sense that income plays only a small part in the quality of life. We need to look beyond the income of individuals alone. This is because there are many other important components to overall well-being and happiness. The Happy Planet Index supports this view. This index includes factors such as the ecological footprint, life expectancy and well-being of individuals. This also involves the quality of health and the relationships that individuals have.

    I believe that it takes society time to move from a conventional to a more progressive perspective. The progressive view looks at society as the problem, rather than at the individual. This means that the structure of society has more of an influence on the individual. Agriculture has played an important role in the evolution of society. The production of crops lead to an economic surplus. This meant that those who owned the crops developed the foundation for a hierarchical structure. This allows inequality to exist. This is shown today as goods and services are unequally distributed. Have we really moved forward? Today, we are stuck in a more conventional style.

    We have moved so far away from the “hunter-gatherer” days, that it seems impossible to function as equals. We should not only look at income, but look at the other factors that lead to poverty and inequality in the world. I believe that more government intervention is necessary to help alleviate inequality.

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