Article by Jiachen Wang 

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Nowadays, society faces a serious problem. Based on the theory of Italian economist Vilfredo Pareto, in his 1897 book Cours d’économie politique, “In every society, a small number of people own a large portion of the wealth” (Pareto, 1897). Although the theory was initially used only in Italy, research and investigation suggest that it can be applied in most countries and regions. The disparity between the rich and the poor is not only in the number of bank accounts, but also in the allocation of resources and the structural inequality of society.

Economic inequality influences many aspects of daily life, from education and health to politics and dignity. Sociologist Branko Milanovic has said, “It is estimated that between 50 and 60 per cent of the variability in global individual incomes is explained simply by the country where a person lives” (Milanovic, 2016). Although society provides equal chances for everyone and values hard work, the fact is that people’s wealth, influence, and status depend largely on their birth and family background, causing more people to remain in the current social class structure.

The famous sociologists Wilkinson and Pickett said that it is inequality, not poverty, that truly drives social problems in their book The Spirit Level. They found that even if a country is rich and developed, if it still faces inequality, mental illness, violence, teenage pregnancy, obesity, and crime rates persist, and the severity of these problems is directly proportional to the size of the wealth gap (Wilkinson and Pickett, 2009). Hence, inequality is a serious problem for the whole society.

In society, inequality has many consequences, such as low social mobility, unequal educational opportunities, and the concentration of political power in the hands of a few. The result is that the wealthy get wealthier through the accumulation of capital and generational inheritance, and the rest are left trying to chase them in income and wealth growth. This leads to increasingly stratified social classes, increasing the concentration of wealth among the rich, and making fair competition impossible.

According to the powerful organisation Oxfam, between 2020 and 2024, the combined wealth of the five richest people on the planet — Elon Musk, Jeff Bezos, Bernard Arnault & family, Larry Ellison, and Mark Zuckerberg — ballooned from $405 billion in 2020 to $869 billion by the end of 2023, a growth rate of roughly 114% (Oxfam International, 2024). Elon Musk’s wealth, the most impressive, increased by approximately ninefold, from $26 billion in 2020 to $219 billion by the end of 2023. Meanwhile, the income and assets of lower-income workers declined. In certain areas, the average pay for a CEO is 300 times that of an average worker (Oxfam International, 2024). Additionally, access to high-quality resources, including better education and more comfortable housing, is increasingly a function of one’s background and wealth. These examples mean inequality is not only a definition in the book; it is a true social problem in our daily lives.

Inequality also has a negative effect on social solidarity. When people perceive that the bulk of the resources go to a few hands, “government and public institutions lose their trust, resentment grows, and social and political fragmentation increases, eventually leading to social unrest” (Wilkinson and Pickett, 2009). When the rich are shopping for luxury goods but the poor are still trying their best to afford necessities, it makes the idea of a united global community sound like a joke. Dealing with inequality is not only about fairness but also about creating a more stable society.

However, reducing inequality is not impossible, such as by improving the progressive tax rate to reallocate resources and so on. As Wilkinson and Pickett emphasise, a more equal society leads to better lives for everyone (Wilkinson and Pickett, 2009). Creating a more equal society is not only a moral issue but also a choice based on real interests.

The economic reform and the cultural shift are the necessary factors for making true equality. When we focus on cooperation or not the competition, we can bridge the relationship between each social class. If destiny is dictated by wealth and power, the society will lose hope. The rich get more wealth and more money in their bank account is not true progress; dignity for all is. According to The Spirit Level, only an equal world can be a truly healthy, happy, and sustainable one (Wilkinson and Pickett, 2009).

References

Milanovic, B. (2016). Global Inequality: A New Approach for the Age of Globalisation. Cambridge, MA: Harvard University Press.

Oxfam International. (2024) Inequality Inc: How Corporate Power Divides Our World and the Need for a New Era of Fairness. Oxford: Oxfam.

Pareto, V. (1897) Cours d’économie politique. Lausanne: F. Rouge.

Wilkinson, R. and Pickett, K. (2009) The Spirit Level: Why More Equal Societies Almost Always Do Better. London: Allen Lane.

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