Inequality and Development
Theissue of inequality has received significant attention for anextended period. The majority of people associate inequality withpoverty, but the problem is much bigger. Inequality can beconceptualized as the failure to provide the masses with equal accessto public services, opportunities, and work-life balance (Mersch,2014. p. 9).Research (Mersch,2014. p. 10)indicates that the social and health problems that exist in theregions where the income gap is large tend to be worse than in theeconomies where such a gap is not very wide. Considering thesepresumptions, one can assert that neoliberal policies haveprecipitated the desire for capital accumulation and profit. Thesesystems focus human action to the demands of the market thus, theneeds of people are usually sidelined (Mirowski,2014, p. 58).Additionally, the neoliberal laws govern the inclusion of thenation-state into the global economy. Consequently, these principleshave resulted in an increase in unequal distribution and resourceaccumulation, and, therefore, led to significant differences inequality (Nwaogaidu,2013, p. 72).The following discussion reveals why focusing on inequality isimportant when contextualizing the issues that surround development,globalization, and neoliberalism.
Developmentand globalization are usually studied together. Development can beconceptualized in different ways. From the economic perspective, onecan view development in terms of an increase in a country’s GDP(Gaimard,2015, p. xiii).From a sociological perspective, one can perceive development as thesocial changes that take place in a community that is moving toward anew era of civilization. In the past two decades, however, researchconducted on the concept of development reveals that the idea ofindividual autonomy is central to defining this manifestation. Thus,development is the process of enlarging the opportunities that can beaccessed by people. This definition, by extension, highlightsindividuals as the real drivers of wealth (Gaimard,2015, p. xiii).Globalization, conversely, can be viewed in terms of intensifying theeconomic, social, political, and cultural ties across the borders(Kacowicz,2013, p. 13).Various factors come into play to facilitate globalization, forexample, economic factors, technology change, and policy changes thatvarious state and non-state actors advocate. When studied from thesocial, economic, and political perspectives, globalization emergesas a cluster of processes that are all-encompassing. These methodspoint to a qualitative change in the quality of people’s livessuch a change can make people lives better or worse.
Whenperceived from the globalization perspective, inequality has evolvedinto an entirely new phenomenon due to the involved structuralchanges. The character of inequality, at the regional and nationallevels, has led to the development of various orientations andcyclical relationships between social and economy politics(Nwaogaidu,2013, p. 71).Inequality appears in different ways, as part of the long-termchanges that are associated with globalization. In the modern day,these changes have led to the segmentation of society into differentmodes of integration and interaction. Also, the conventionalinstitutional arrangements have been displaced, and, in addition, theformation of new mechanisms of adaptation has led to an increase innew forms of social inequality. Consequently, the study of change inthe contemporary world cannot be avoided since it brings to thesurface issues like the impact of technological change on thereconfiguration of the social order.
Afocus on change reveals that technology has played a pivotal role inreconfiguring the social order. Change is synonymous with the modernwave of globalization (Nwaogaidu,2013, p. 72).Globalization, by extension, encompasses a myriad of socialstructural changes and emerging forces that lead to the corrosion ofpolitical autonomy and traditional culture. Furthermore, thesestructural changes have resulted in an increase in inequality withinand among different groups. These changes may be in the form of 1) areduction in social safety networks, which may lead to increaseddegrees of deprivation, and 2) an increase in competition forresources (Nwaogaidu,2013, p. 72).An increased struggle for limited resources may affect the naturalstate of equality profoundly since people may disregard theirresponsibility to society as they struggle to accumulate capital andwealth. Also, the exploitations that manifest in the form ofinequitable trade balance of transactions may infringe oninternational trade rights. These structural changes, by extension,may result in the development of various risks, for example, 1)opening up dangerous probabilities, 2) alienating different culturesand displacing identities due to technological advances, and 3)restricting the international division of labor. Furthermore, theincreased appetite for capital accumulation and profit leads toincreased levels of inequality. These issues, to a large extent, havea close connection with neoliberalism.
Neoliberal policies have led to the development of economic changesas a result, the desire for capital accumulation and profit has beenforwarded as the distinctive feature of globalization. Neoliberalpolicies focus on integrating the nation-state into the globaleconomy (Mirowski,2014, p. 62).This approach has led to unequal distribution and resourceaccumulation, and, as a result, increased levels of inequality havebeen realized. Most people view neoliberalism and globalization inthe same context when studying market formations. Neoliberalism,however, has some natural features of liberalism thus, it should beregarded as a distinct ideological platform. Ideally, neoliberalismis authoritarian because it shapes human action according to themarket (Dubrow,2014, p. 46).Therefore, in practical political terms, one can argue thatneoliberal policies can only work if the practices that arenon-democratic in nature are implemented. Nevertheless,neoliberalism, as a concept, has been inspired by the contemporarywave of globalization (Nwaogaidu, 2014, p. 73). In this regard,globalization can be perceived as both a political and economicfactor that has led to the development of new structural changes.
Consideringthe above assertions, the neoliberal economic era can be viewed as asignificant force of deprivation in the political and economicsystems of the developing nations. Globalization has inspired theimplementation of new systems of practices and formations thesesystems are usually implemented through hegemonial manipulations andthe enforcement of democratic practices in the undeveloped statestructures (Nwaogaidu,2013, p. 74).The democratization of the market has resulted in the inclusion ofthe previously excluded groups and brought an end to the feudalsystems. The driving forces behind these changes are impersonalenergies like technological change, the emergence of socialidentities, and the growth of market-based social relations.Nevertheless, studies (Nwaogaidu,2013, p. 74)have proven that the democratization of the market has resulted inthe widening of political exclusion of some groups since the dominantgroups continue to wield more power in the political scenario. Thismanifestation is the product of an interplay between politicalliberalization and the neoliberal economic regime that setsdemocratic participation at risk, in particular among the newly"free" communities.
Inaddition to the above, neoliberalism undermines the sovereignty ofnations, which leads to both economic and political instability.Studies (Nwaogaidu,2013, p. 74) indicatethat the level of democratization should be consistent with theeconomic development of a country. Neoliberalism advocates for thedevelopment of policies that free up the market. Thus, if theneoliberal policies are not put in check, they may lead to politicalvolatility. In fact, globalization has been proven to undermineliberal democracy since countries lose the power to control theirresources after opening their markets to the world (Nwaogaidu,2013, p. 74).In other words, the less developed nations are usually exploited bythe more developed countries because the third world economies do nothave sufficient resources to compete at the same level with thedeveloped countries. Thus, through the hegemonic Western burden, theless developed nations are forced to institutionalize neoliberalism.
Theinterplay of political liberalizations and the neoliberal economicregime advances an undue advantage to the dominant groups. Theinfluential groups that consist of businesspeople and politiciansgain significant benefits, in articulating their views andpositioning themselves in power, over the less privileged andmarginalized groups (Nwaogaidu,2013, p. 74).This happenstance is made possible by the political influence thatthe dominant groups wield this power enables these individuals tosolidify their capacity to accumulate resources. As a result, theseorganizations distribute power and resources according to theirdesires or needs. Thus, through their hegemonial influence, theseparties may resort to not only controlling the distribution ofresources but also creating distributional crises that may bedetrimental to both economic growth and social formation. In the samelight, globalization has also led to the growth of a myriad of risksin both the less developed and advanced economies.
Globalizationhas resulted in the development of various social risks in both thedeveloped and developing worlds. Globalization has grown to the pointof becoming a system of global interaction and a production processthat is inclined toward social-economic integration (Hamdi,2013, p. 142).However, in spite of globalization’s upside of creating betteropportunities for economic advancement, it has also led to thedevelopment of deep-seated opposite effects in the areas of capitalinflow and social mobility. Consequently, although some areas havebenefited from globalization through increased prospects for economicprosperity, some areas have suffered due to the associated structuralchanges in social formation. As a result, these regions haveexperienced increased social disparities and inequality. This newstructural arrangement governs both the economic structures and thepolitical and social agreements that have been the cause of riskresources and underdevelopment in the third world countries. In otherwords, one can contend that although globalization has precipitatedthe development of new opportunities in the areas of socialmobilization and contemporary technologies, it has also initiateddifferent sources of social risks that have been experienced in boththe developed and underdeveloped regions.
Justlike in the less developed nations, inequality is also perceivable inmodernized economies like America. Over the past 35 years, inequalityin America has risen significantly. The upper 1 percent, for example,owns more than one-fifth of the total national income (Stiglitz,2015, p. 426).In fact, inequality is more perceivable in terms of wealth. The top 1percent of America’s wealthiest persons own approximately 42% ofall the money in the economy, and the top 0.1% holds 22% of all thewealth in the country. Moreover, the income of the top 1% of theeconomy has doubled over the last one-third of the century, and theshare of the top 0.1% has nearly tripled since 2013. The recessionmade everything worse since the ordinary Americans lost their sourcesof income and houses (Stiglitz,2015, p. 426).Furthermore, the majority of people contended that they did notwitness any considerable difference after the recession wasofficially ended. The reason for this happenstance can be attributedto the fact that most of the resources that were accrued in the firstthree years after the recession went to the top 1% of the population.As a result, the chasm between the wealthy and the poor widened.
Theneoliberals contended that the crisis that engulfed America since the1980s was a natural phenomenon. The people who support thisideological position believe that the inequality of political rightsand economic resources is a necessary function of the ideal marketsystem (Mirowski,2014, p. 58).Neoliberals posit that inequality is one of the strongest forces forprogress, as opposed to sustaining the natural state of the market.Thus, the rich should not be viewed as parasites, but a windfall tohumanity. In other words, people should start emulating and envyingthe wealthy. Consequently, the individuals that advocate for equalityshould be considered backward (Mirowski,2014, p. 58).Thus, considering these notions, the crisis of 1980 cannot beattributed to unequal income distribution. Neoliberals believe thatattempting to ameliorate the crisis by expanding consumer credit andhome ownership was the primary cause of the disaster.
Nevertheless,the crisis of 1980 led to the reversal of longstanding beliefs aboutboth the evolution of economies and the American society. Thewidespread assumption during the 1980 period was that America hadbecome a middle-class society thus, the middle class was critical tothe growth of the U.S. economy (Stiglitz,2015, p. 426).The recession saw a significant decline in the middle class and asharp increase in the incomes of the wealthy. In the same light,studies (Stiglitz,2015, p. 426) indicatethat the productivity of employees has doubled since the 1970showever, the wages of the majority of workers has only increasedmarginally. Statistics suggest that the earnings of the wealthy havegone up by about 170% since 1970 (Stiglitz,2015, p. 426).This happenstance has triggered questions about the theory of thetrickle-down effect it posits that if the rich do well, society willbenefit from their exploits. This premise has not held water for theAmericans over the past one-third of the century.
Nonetheless,the neoliberals posit that the market order should not determine acorrespondence between individual desires and rewards or individualmerit. In fact, any attempts to bring about a state of order in themarket may result in a market crisis (Stiglitz,2015, p. 426).The popular belief among the protagonists of neoliberalism is toallow the market to develop solutions to the problems that it faces.Neoliberalists assert that the market can provide solutions to theproblems that it creates. For example, a problem like poverty in theunderdeveloped nations can be solved by the provision of microloans.Therefore, the issue of inequality in the American society is usual,and, with time, the market will come up with a solution to thisproblem.
Ina recap of the above discussion, studying inequality vis-à-visdevelopment, globalization, and neoliberalism offers various insightsinto the issues that come up because of these changes. Most peoplerelate inequality with poverty however, various factors areconnected to the problem. For instance, contemporary economic andsocial structures have led to the development of ideas likeneoliberalism and globalization. As a result, the structure and formsof inequality have evolved profoundly. In the modern times, entiregroups can be viewed as suffering from the ills of inequality. Forinstance, the exclusion of the third world nations from participatingin the global economy can be perceived as a modern type ofinequality. The reason for such developments can be attributed to theunfriendly political and economic systems that the more advancedcountries have imposed on the underdeveloped economies. Additionally,the developed nations have more resources than the third worldeconomies. Therefore, the level of competition between theseeconomies is advantageous to the developed countries. Moreover, thedesire for capital accumulation and profit has led to a shift infocus in the demands of the market. Thus, the needs of human beingshave been neglected for capital accumulation and profit, as discussedabove.
Dubrow,J. (2014). Politicalinequality in the age of democracy (1sted., p. 46). London: Routledge.
Gaimard,M. (2015). Populationand health in developing countries (1sted., p. xiii). Springer.
Hamdi,F. (2013). The Impact of Globalization in the DevelopingCountries, 3(11),142. Retrieved fromhttp://file:///C:/Users/admin/Downloads/8180-10271-1-PB.pdf
Kacowicz,A. (2013). Globalizationand the distribution of wealth (1sted., p. 13). Cambridge University Press.
Mersch,M. (2014). INEQUALITY The challenge of the century. JournalFor A Progressive Economy,(2), 9 – 10. Retrieved fromhttp://www.progressiveeconomy.eu/sites/default/files/Progressive_Economy-JOURNAL_issue2.pdf
Mirowski,P. (2014). Neverlet a serious crisis go to waste (1sted., p. 58). London: Verso.
Nwaogaidu,J. (2013). Globalizationand social inequality: an empirical study of Nigerian society (1sted., pp. 71 – 74). Zürich: LIT Verlag Münster.
Stiglitz,J. (2015). The Origins of Inequality, and Policies to ContainIt. NationalTax Journal, 68(2),425-448. http://dx.doi.org/10.17310/ntj.2015.2.09
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