Why we must act now on inequalities

Published on 21 September 2016

After decades of neglect, rising inequalities, their consequences and what to do about them have risen to the top of public and policy agendas. In the UK, we see this in the summer’s EU referendum result and commentary on it, with recognition that ‘vote leave’ was in part a reaction of those alienated economically by globalisation, and politically by a Whitehall politics dominated by a wealthy and privileged elite.

In some of the poorest countries in Africa, we are also seeing growing poverty and protest, not least amongst young people facing jobless futures while elites profit from commercial mining and land deals. Inequalities also hampered efforts to deal with the Ebola epidemic that wrought havoc in West Africa during 2014-15 – inequalities in health and access to health services, but also as economic inequalities fuelled mistrust and resistance against outbreak control teams.

The scale and negative impact of inequalities

Wide spread recognition of the scale and negative impact of inequalities is unquestionable. The 2016 Oxfam report highlights that 62 individuals own the same amount of wealth as the bottom half of the world’s population. The World Economic Forum Outlook on the Global Agenda 2015 identified rising inequality as the most significant trend and challenge. The United Nations Agenda 2030 to which all countries committed in 2015 not only highlights tackling inequalities as one of 17 Global Goals, but recognises it is central to the whole agenda, pledging to ‘leave no-one behind’. Closer to home the new UK Prime Minister Theresa May has pledged to tackle injustice and implement an inequality audit.

This rising attention marks a defining moment. As the 2016 World Social Science Report ‘Challenging Inequalities: pathways to a just world’ (which IDS has co-edited with the International Social Science Council (ISSC)) argues, rising inequalities are a central challenge of our era. A challenge that is both deeper and more complex than the headlines often suggest and one that requires urgent and transformative action at all levels – in policy, practice, advocacy and the knowledge to inform this.

There is however cause for hope; just as inequalities have multiple dimensions, causes and consequences, so there are multiple routes to tackling them, and building pathways to more equal futures.

Why inequalities matter and how levels are changing?

Bringing together the latest evidence on inequality trends, the report shows that global inequality actually declined during the first decade of this century. This is driven largely by reduced inequality between countries, and large reductions in poverty in China and India. However rising inequalities within countries – both in the old industrialised countries of Europe and North America, emerging and middle income countries, and those with the lowest incomes such as in Sub-Saharan Africa – threaten to reverse this positive trend. Meanwhile the dramatic rise in the incomes of the top 1 per cent of earners globally in the past three decades, linked to the increasing dominance of financial capital over labour income, has meant the growing concentration of wealth in the hands of a small elite.

Rising inequality matters, in many ways. Most fundamentally, it is ethically and morally objectionable, having no place in societies striving for greater fairness and justice. But it also has far-reaching consequences for almost every aspect of our lives, and abilities to achieve other political and social goals. Inequality can hamper economic growth, and certainly reduces the impact of that growth on poverty reduction.

Health and social problems are worse in countries with higher income inequality, and this has consequences for everyone, rich and poor alike. Inequalities are associated with conflict, and countries with high levels of inequality between groups are more likely to experience civil war. Inequality can hinder responses to crises – whether epidemics like Ebola, or the migrant crisis in Europe. Inequality can be associated with political alienation and marginalisation, undermining democracies. And it can worsen environmental problems like climate change, and make the co-operation needed to tackle them far more difficult.

The inequalities that matter are not just of income and wealth. We also need to address six further forms: political, social, cultural, environmental, and spatial and inequalities related to knowledge. The report’s contributors show the numerous ways these multiple inequalities interact. People often experience intersecting discriminations and injustices, as these different forms of inequality interact and compound each other. Some of the most enduring forms of inequality are those associated with identities, such as race, caste and ethnicity, which are themselves facets of what we term cultural inequality.

Gender pervades all these, and in many settings we see women and girls facing persistent – and sometimes growing – material disadvantages, discriminatory social norms, violence, and restrictions on voice and participation. Downward spirals of intersecting inequalities can in turn affect people’s self-perceptions, limiting their capacities to aspire to a different way of life. Unequal futures are bleak futures, whether for individuals, communities, nations or the globe.

Towards a more equal future

So how can unequal futures become equal futures? The Report helps to widen the current focus on inequality and its consequences, to consider greater equality and how it can be achieved – and how action by governments, civil society, businesses and citizens can make a difference. As the report highlights, there is much to learn from the countries which have managed to achieve reduction, or at least stabilisation, in levels of inequality during particular periods – whether those in East Asia during the 1990s or in Latin America during the first decade of the 2000s.

There are also many examples from around the world of rule-changing measures in trade and finance, taxation and asset distribution, work and employment, education, health care, social protection and housing which can contribute to reducing economic inequalities. Policies and legal changes to widen access to services and reduce discrimination have key roles to play in addressing social, gender and political inequalities, while reforms to land and resource access and control are critical in reducing environmental inequalities. The list goes on. But what is clear is that rule-changes have sometimes worked on only some aspects of inequality, or only for a period, or have had unintended negative effects.

Overall, sustained success is more likely when there is a package of measures that form a coherent whole, in a context of relative economic and political stability, and shared concern and commitment amongst governments and citizens. And there is clearly no one size fits all; policy mixes will need to be different for and adapted to particular countries and regions, reflecting their histories and contexts. In a globally connected world, they will need to align with reforms to international governance and social policy to address drivers of inequality within and between countries, for example through tax cooperation, favourable trade agreements, strengthened social rights, carefully targeted aid packages and effective regulation of the international financial system.

How citizen action can drive change

Policy and regulation are not the only responses to inequality. While the vicious circle of multiple inequalities can create a sense of powerlessness leading to inaction, it can also create its own response, stimulating demands and action from citizens. Thus in In India, Indonesia, Ethiopia and Brazil, we see local initiatives empowering poor and vulnerable adults, especially women, to diversify their income sources and access microcredit, in the process building solidarity and self-help networks.

In South Africa, grass-roots mobilization and political action has helped to break down deeply connected economic, social and political inequalities. In Brazil, public participation in the country’s ‘Zero Hunger’ effort was crucial in pushing for its turnaround to reduce inequality in the early 2000s. New alliances of stakeholders can also be important in building broad support for change. In Egypt, the mobilisation of doctors, patient groups and political forces was crucial in bringing about legal changes towards universal health coverage.

Such efforts from below may start small, but they may also multiply, spread and scale up to have large-scale impacts, especially when combined with rule changes and actions involving states and market actors. Small pathways can thus coalesce to become the highways and motorways and offer visions of a more equal future.

A step change in knowledge

To help identify and build such transformative pathways which can help move us towards a fairer world, we also need a step-change in knowledge and how it is generated. We need a new agenda that is much more interdisciplinary, pluralistic in its methods, multi-scaled and globally inclusive than we see today. One that is far more directly engaged with governments, businesses, and citizens. Can those who carry out, support, and engage with social science rise to this challenge? Given the scale of the challenge, I would argue, that they must.