Lecture 20 – Seeing Inequality
Ways of Seeing Inequality
– Bearing witness: physically seeing it
– Counting inequality: $1/day versus $2/day, percentage vs numbers
Eradicating Poverty now becomes a matter of redistribution, the bottom billion live within middle income
countries. Poverty is a sign of income inequality.
Four Cases of Inequalitty
Global inequality: there are rich countries and poor countries, with the rich countries growing richer, and
the poor countries staying poor.
The Welfare State: redistribution of income to create more egalitarian societies in capitalist countries.
Gendering social protection: differences between genders
Local solutions: inequality beyond the state – ways to dissolve inequality at local levels
(I) Global Inequality
– Keynesian compromises and embedded Liberalism (anti-mercantilism, economic
– Bretton Woods: exchange rates to be fixed, creating of institutions of financial governance
– GATT: gradual reduction of tariffs – precursor to the world trade organization
– European reconstruction: to rebuild European economy and trust between European states
– 70s and 80s, rich countries got richer while poor countries got poorer
– globalization: breakdown of Keynesian compromise and embedded Liberalism (US
decided it no longer wanted to bankrolled the world economy)
– technological change: manufacturing became mechanized, resulted in surplus labour
– neo-liberal resurgence: IMF and World Bank demanded that developing countries
abandon all trade barriers, subsidies, and currency control
– Bad government policy: lack of investment in education, etc.
– Rich countries are getting richer, poor countries are getting comparatively poorer
(II) Domestic distribution
– As countries become richer, inequality rises, but after a certain point, it will fall
– Rich countries spend more on the welfare state over time as they get richer: health,
unemployment, pensions, social assistance
– Why do countries develop welfare states?
– Industrial capitalism: as economies mature, they automatically become welfare states
– Unionization of labour – work and welfare: unions use collective bargaining to create political
power that allow for the emergence of the welfare state
– Social democratic parties become more powerful with more unio