Why do people bother about inequality or poverty and opt for Development?
This question has been broadly enshrined in the eminent work of Adam Smith ‘The Wealth of Nations’. All men are in substance equal. Poverty or prosperity is not a predetermined destiny of any nation or any person. In the first place one cannot justify the inequality and poverty from justice and moral points of view. There is no acceptable justification for the unfair distribution of wealth and income between profits and wages as well as the inequality among regions. There is no reason to believe in the static concept of the gap between the poor and the rich as well as the spatial inequality pattern across regions. Actually, there is no palpable justification for it. Because no one group of nations or regions in the world could keep on ‘progressing’ while others lagging hungry and poor for indefinite time. In fact, progress is never final-it is dynamic and depends on how we interpret it. There are glaring inequalities which are socially and morally not acceptable. There is no moral justification to live within extreme inequality and something needs to be done to narrow the gap and bring it into tolerable level. Like justice money is something everyone needs. Inclusive development is not a matter of moral rectitude. Beyond moral issue, poverty and extreme inequality and misery endanger world peace and stability as well as the future of humanity. Because, as inequality grows so as social polarization. Poverty and grave inequality are trouble makers. Inequality and poverty is one of the biggest social, economic and political challenges of our time.
The current crisis of development, compounded by the global environmental crisis, hinges on the exhaustion of a particular system of development which is ecologically predatory, socially perverse, politically unjust, culturally alienating and ethically repulsive. The deepening of poverty and inequality have become structural features of the world system, reinforced by the conveyor belts of trade and financial globalization.
Widening income and wealth disparities may have damaging side-effects. In theory, inequality has an ambiguous relationship with prosperity. It could also be true that some measure of inequality might be good for an economy because income gaps can arise for good reasons (such as when people are rewarded for productive work) or for bad ones (if poorer children do not get the same opportunities as richer ones). It can boost growth, because richer folk save and invest more and people work harder in response to incentives. But big income gaps can also be inefficient, because they can bar talented poor people from access to education or feed resentment that result in growth-destroying populist policies such as terrorism. Some studies purport to link widening income gaps with all manner of ills, from obesity to suicide. Silent poverty is one that should be taken care of. Inequality sharpens incentives to work hard and take risks; it rewards talented innovators who drive economic progress. The mainstream consensus has long been that a better growing economy (inclusive growth) raises all boats, to much better effect than incentive-dulling redistribution. Although Omni parity is impossible, reducing inequality is critical to the needed transformation to sustainability. Inequality erodes trust and undermines co-operative solutions to urgent social, economic, environmental and political problems. Governments should attack cronyism and investing in the young. Fairness and progress simultaneously is the recommended grand strategy.
Justice requires that contribution to welfare from natural capital and the shared cultural heritage of humankind should be equitably distributed among all. The main natural resource land is public property in many countries. The other tool for fair resource distribution is tax. Tax the rich and redistribute downward scheme. The best way of accomplishing to reduce poverty and inequality is through fair sharing of rent from the commons.
It is not possible to successfully negotiate the kinds of collaborative agreements and arrangements needed to solve the world’s problems unless stakeholders perceive that they share common interests, and that it is in their mutual interests to form these collaborations. Land and other natural resources are not increasing; thus, the only way to have sustainable development is to ensure a more equitable global distribution of wealth and resources.
Economic, political, cultural and social inequalities have sharply increased over the past several decades, within and between nations. Wealth is concentrating in the hands of so few individuals, classes and corporations. These growing disparities undercut human well-being and social cohesion by inhibiting economic growth and stability in many countries and by exacerbating violence, crime and conflict.
Even massive poverty with less inequality and inequality where there is no poverty are not the same scenarios and require proper analysis. Unequal distribution of available income and wealth could be reasons for silent poverty. Wealth flows, not trickles to the advanced economies as Matthew principle claims. It flows to urban centers. The other fundamental issue in interpreting equality is whether equality of opportunity or equality of outcome. Not only the kind of gap we have today but any difference in quantity occasions a difference in esteem. Self-esteem is one of the core values of development. Development and fair distribution of wealth are the first order priority as the commonly held presumption that growth and development are the two peacemaking and peacekeeping factors required for coexistence in harmony of social groups in every region. One of the possible ways that the poor can rest and stay in solidarity and compassion with the rich is to have decent or better standard of living and tolerable inequality which can be achieved through sustainable economic growth and development as well as freedom and democracy in peaceful environment. Similarly, economic prosperity without freedom and democracy is another form of poverty. Nothing makes a people more vulnerable than poverty. Poverty is not a matter of being economically deprived but is defined and sustained by a sense on the part of the poor of helplessness, dependence, lack of opportunity and lack of self-confidence and self-respect. Corruption is a source of income inequality and poverty, especially when the lack of investment and employment opportunity is acute. This all in other words means fair distribution of income, productive resources and equal opportunities for all and supremacy of the rule of law in the justice system and daily human activities. Inequality and poverty create trouble for the people involved and around them. It also frustrates those who genuinely want to diminish the overall levels of human suffering because human is social. These kinds of groups can advocate for and take a lead of initiative to end the troubles. This is still the unsolved assignment of regional economics today. The guidepost is to tackle inequality without hurting economic growth. Inequality can be measured in many ways – by the distribution of wealth, income or consumption, or between races, sexes, regions or individuals. The best known way of measuring inequality is the Gini coefficient, named after an Italian statistician called Corrado Gini. It aggregates the gaps between incomes of people into a single measure. If everyone in the group has the same income, the Gini coefficient is zero; if all income goes into one person it is 1. The Gini coefficient aggregates the gaps all disparities into a single measure, so it is a better summary measure, but it does not tell you where the gaps are growing. But it is too simplistic snapshot. Like any snapshot, the picture can be misleading. Static measure of income gaps tells only half the story.
If a country can conquer poverty and correct inequality, it can conquer any giant or mighty enemy on earth and can correct any serious problem. Put in other words unless a country can conquer poverty it will have conquered nothing at all. There is no sovereignty without food security and yet economic prosperity without freedom and democracy is another form of poverty. The first and the most important condition for a life worth living is freedom from poverty. This is the only foundation on which all other social structures can be constructed. No society has progressed unless it has been able to solve the problem of feeding itself. Not only food sufficiency but also food surplus is the foundation of transformation to civilization. The pestilence of inequality and the feeling that life is unfair and precarious sharpens the divide between winners and losers as well as the gap between the rich and the poor thus risks political upset. That is true the existence of poverty is a cause for concern in all nations. Poor country is a curse and rich country is a blessing to the world. That is why all nations are greatly concerned over poverty. Poverty and extreme inequality endanger world peace and humanity. Formation of the United Nations organizations and the many programs developed year after year with a number of initiatives by governments to export technology and to grant loans to nations in the development of their resources are evidence of the international concern over poverty. Improving the well-being of all peoples and regions leaving no one behind is the new development frontier.
10, April 2018
Addis Ababa, Ethiopia