Article by Alannah Bresnihan

Photo by No Revisions on Unsplash

Inequality, according to Sin Yee Koh, is the unequal distribution of resources in society.^[1][2] For years I have found myself asking if inequality is actually as detrimental as we think. Surely it is not a problem if it helps reduce poverty, improve economic efficiency and if it results from legal processes? While considering the negative impacts of inequality, I am left unclear as to what my verdict is, despite analyzing both sides of the argument.

Inequality is a socially constructed phenomenon, meaning that the idea of inequality has been created by society. It can be broken down into three categories, vital inequality, existential inequality and resource inequality. Vital inequality refers to socially determined distributions of health and ill health, measured by life span.² Existential inequality refers to the unequal treatment of people within society. Resource inequality refers to the unequal distribution of resources.

Marshal et al identified four key ideas as to why inequality may be justified.^[3] The first centres around hard work. Some suggest that unequal rewards reflect different levels of hard work – If one works hard to earn a high income, this should be rewarded as it is earned and deserved. The second idea focuses on legality – as long as the assets are legally acquired, and do not harm others, then there is no wrong in it. Additionally, the third justification is equal opportunity. If there is fair competition among all, then everyone has an equal opportunity. The final justification is if inequality triggers beneficial events, such as economic growth, then everyone benefits – hence making it a positive event. In my opinion, all these justifications are valid up to a point. However, up to what point do we stop justifying them?

Some argue that inequality may not be a cause of global problems, but instead may be the answer to them. This argument has been used in regard to global poverty. Scheffler discusses how when some have more than others, it is an easy misconception to assume that this is due to inequality when really poverty is the main problem.⁴ Despite the fact that poverty is decreasing, it is still a universally extensive issue. According to Oxfam, the 10 richest men in the world own more than the bottom 3.1 billion people⁵ demonstrating along with extreme wealth, there is extreme poverty. The main argument here is that in order for growth to occur, which in turn reduces poverty, inequality is necessary. This links to one of the justifications for inequality previously mentioned, as the standard of living has increased.

Considering the other side of the argument, inequality can have a detrimental effect on society as a whole. This is because it has negative impacts on growth/ economic stability, social mobility and equal opportunity, health, levels of crime and violence. Additionally, it creates societies that are increasingly consumption-based – which further has negative effects on the climate crisis.

Wilkinson and Pickett demonstrate how “almost all the problems which are more common at the bottom of the social ladder are more common in more unequal societies.”⁶ This demonstrates how unequal societies often have the highest rates of social ills. Social ills are common problems that affect many people within a society, including, life expectancy, children’s education, imprisonment rates, reduced growth etc;

The recent Covid 19 crisis can neatly demonstrate how inequality affects everyone differently. In the case of vaccinations, richer countries were the first to access them, whereas the poorer countries were the last. This supports Wilkinson and Pickett’s findings that social ills, such as poor healthcare, are more common in poor countries than richer ones. Additionally, the 2022 World Inequality Report estimates that between 2019 and 2021, the wealth of the top 0.001% grew by 14%, while average global wealth is estimated to have risen by just 1%.^[4] This highlights how in situations of global crisis, the rich get richer, while the poor get poorer.

My overall controversial verdict is that, despite the drawbacks of inequality, ultimately it can be justified. From an economist’s point of view, the ultimate objective is economic growth, and inequality is a price we must pay for this. The pressure to create a more equal and fair society grows. Meanwhile, if we take time to analyse the benefits that inequality holds, we ask ourselves what the best decision is. High levels of inequality trigger growth in richer countries, but reduce growth in poorer ones.^[5] Due to the benefits of inequality, can we really say that it is as harmful as it is portrayed?

[1] Sin Yee Koh, 2020. International Encyclopedia of Human Geography (Second Edition). P.269. ² Therborn, G., 2020. How the dimensions of human inequality affect who and what we are. [online] The Conversation. Available at: <https://theconversation.com/how-the-dimensions-of-human-inequality-affect-who-and-what-weare-137296#:~:text=Vital%20inequality%20refers%20to%20socially,your%20years%20without% serious%20illness.>

[3] Marshall, G., 1997. Against the Odds: Social Class and Social Justice in Industrial Societies. Oxford: Clarendon Press.

[4] World Inequality Report 2022. 2022. The World Inequality Report 2022. Chp 4. [online] Available at: <https://wir2022.wid.world/chapter-4/>

[5] Balls, A., n.d. Inequality and Growth. [online] National Bureau of Economic Research. Available at: <https://www.nber.org/digest/aug99/inequality-and-growth>

⁶ Scheffler, S., 2020. Is Economic Inequality Really a Problem?. [online] The New York Times. Available at: <https://www.nytimes.com/2020/07/01/opinion/economic-inequality-moral-philosophy.html>

⁷ Oxfam. 2022. Inequality Kills. [online] Available at: <https://webassets.oxfamamerica.org/media/documents/Inequality_Kills.pdf>

⁸ Wilkinson, R. G. & Pickett, K. (2010) The spirit level: why equality is better for everyone. London: Penguin. Chapter 2.

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