Professional Documents
Culture Documents
Access to this document was granted through an Emerald subscription provided by emerald-srm:600462 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for
Authors service information about how to choose which publication to write for and submission guidelines
are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as
providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee
on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.
International
Journal of Social Worsening income gaps and a
Economics
29,6
sustainable future
Richard J. Ward
480 University of Massachusetts Dartmouth, Massachussetts, USA
Keywords Income, Developing countries, Sustainable development
Abstract To resolve the wide and growing disparity of incomes within the USA and between
highly and poorly developed countries, self-empowerment of the poor while devoutly to be
encouraged and wished for will not suffice without continued and enhanced global commitments
of assistance from private, public domestic and international governments and institutions in the
tasks of educating and training of the poor for better jobs, improved health practices and viable
Downloaded by Universitas Brawijaya At 01:13 31 October 2017 (PT)
democracies. The effort will require the transfer of billions of dollars to development from the
estimated $1.5 trillion currently spent on military arms worldwide and more equitable land
distribution without political and social upheaval. Human nature must be pressed to eschew
selfish materialism, indifference and political opportunism, for the common good of current and
future generations.
Income inequality, whether domestic to the USA or among nations, developed
and less developed, has the makings of an everlasting debate with no solutions.
I struggled with the issue decades ago! In one article (Ward, 1972) said:
. . . income inequality in income distribution has become a very live issue in recent years. The
two central categories of income inequality which threaten to disrupt orderly progress and
peace are: 1. the internal or intra-national income distribution spread, 2. the ever widening
gap or disparity between the more developed and less developed countries of the world.
Seems a bit far fetched to absolve the computer on the basis of two years of
performance almost 20 years ago! Yet, his essential point about the impact of
computers deserves continuing examination, though by adding ``technology'' in
its broader context of people trained to handle electronic machinery, tools,
equipment, robotics and the like, some of the gap can undoubtedly be
rationalized on the basis of those who have received such training and those
who have not.
Whatever the causes of the worsening inequality of incomes in the USA, at
least one-third of people polled by the Pew Research Center claim that their
lives are worse, ``despite the humming economy''.
As Lester (1999) put it:
. . . accompanying the hum of computers and the roar of the economy at the end of the
twentieth century is a nagging feeling among millions of Americans that something has
been lost.
International The global arena
Journal of Social There is some logic to introducing this topic with some perspectives on the
Economics US economy, since with about 7 percent of the world's population, we
consume the lion's share of the globe's food and other resources. As an
29,6 aside, notwithstanding Handel's assertion about the passive role of the
computer in the income inequality debate, the fact that there are more
482 computers in use in the USA than in the rest of the world combined says
something about their role in creating the launching pad for new
communications and other technologies leaving more of the untrained
behind, not to mention speed in all phases of business operations in meeting
product output goals dictated by the speedy rise in effective demand.
Collectively, the top 20 percent of the more affluent industrial nations control
86 percent of global gross domestic product, while the bottom 20 percent
Downloaded by Universitas Brawijaya At 01:13 31 October 2017 (PT)
control just 1 percent. In Laurea's (1999) words, ``the boom for the wealthiest of
the world's population [has been] a bust for just about everyone else''. In this
regard, the United Nation's Report (UN, 1999) lists the ten best and worst
countries to live in as follows:
. Top ten: Canada, Norway, USA, Japan, Belgium, Sweden, Australia, The
Netherlands, Iceland, UK.
. Bottom ten: Sierra Leone, Niger, Ethiopia, Burkina Faso, Burundi,
Mozambique, Guinea-Bissau, Eritrea, Mali, Central African Republic.
Stated numerically, the issue was put succinctly by Michael Renner (1997,
p. 121):
The gap between rich and poor has grown to tremendous levels, both globally and within
many individual countries (table below). Worldwide, the richest fifth of the population now
receives 60 times the income of the poorest fifth, up from 30 times in 1960. In the United
Kingdom, the ratio between the top 20 and bottom 20 percent went from 4:1 in 1977 to 7:1 in
1991. In the United States, it went from 4:1 in 1970 to 13.1 in 1993.
As Table I from this source shows, the ratios of the richest 20 percent of the
population to poorest 20 percent in selected countries varies considerably.
According to the aforementioned UN Report (UN, 1999), among 95
developing nations of Asia, Africa and the Middle East, only India and China
avoided further slowdown in 1999. The slowdown for the remaining 93
countries (UN, 1999, cited in Laurea, 1999) ``will leave 1.5 billion people, or a
quarter of the world's population, living on less than a dollar a day''. Not that
India's situation is all that sanguine. Its population is projected to reach 1.5
billion by 2050, thus adding 16 million each year, and ``there are doubts as to
whether the natural resource base will support such growth'' (UN, 1999, cited in
Laurea, 1999). Already, 52 years after its independence, as Brown and Halwell
(1999) point out, over 50 percent of India's population are undernourished and
underweight and unable to read or write.
In this scenario, the income disparity between the rich and the poor countries
can be appreciated by the finding in this UN Report that in the period
1994-1998, ``the wealthiest 200 individuals in the world more than doubled their
Country Ratio Worsening
income gaps and
South Africa 45:1 the future
Brazil 32:1
Guatemala 30:1
Senegal 17:1
Mexico 14:1 483
Malaysia 12:1
Zambia 9:1
Algeria 7:1
China 7:1 Table I.
South Korea 6:1 Ratios of the richest
20 percent of the
India 5:1
population to the
Downloaded by Universitas Brawijaya At 01:13 31 October 2017 (PT)
net worth to $1 trillion, which is more than the gross domestic products of
Canada, Belgium, Spain, South Korea, Brazil or Russia''! (UN, 1999, cited in
Laurea, 1999). Also, each of the top global corporations General Motors, Ford,
Mitsui & Co., Mitsubishi, Exxon, Wal-Mart, Royal Dutch Shell, for example
had sales totaling more than the GDPs of many countries of Asia, Africa and
Latin America (UN, 1999, p. 32).
The message here is clear: the widening gap within the wealthiest nations
and between the wealthiest and the poorest is alarming, exacerbated by the
recent collapse of the Asian high flyers Indonesia, Japan, Korea, Thailand.
The slow and still hesitant policy moves by Japanese leadership to revive its
economy, cope with its aging population and workforce, recharge its
entrepreneurial flair for innovation and creative exports, while allowing
foreign access to its markets, will be essential to the long term health of all
of the Asian economies. There are signs of progress in Japan, and, indeed, in
Asia generally, but far less than hoped for or needed. In another part of the
world, economic drag also prevails: the uncertainties of Latin America's
effectiveness in meeting the global competitive challenges adds to the lag in
world economic revival.
All of these ambiguities contribute to the postponement by central
governments and other policymakers of rigorous strategies for addressing the
injustices of the income inequality phenomenon per se, though effective policies
to address serious unemployment, credit and other domestic and international
monetary crises would dramatically contribute to alleviating recession and
hence unemployment and loss of personal income.
this decade's good news the promise of tomorrow? Will this be the East Asian century? (now
in doubt).
What about the USA? Americans should remember the refusal of the British to face up to
their troubles, before they too let themselves be soothed by optimistic prognoses. That is the
weakness of futurism: the soothsayers do not hang around to take responsibility for their
errors. Even if they do, no one notices them any more; and they themselves remember only
the good guesses . . .
Meanwhile advanced and backward, rich and poor do not seem to be growing closer.
Optimistic number-crunchers point to overall mini-convergence, but they put Asia with the
poor, and only the special success of East Asia (seemingly aborted temporarily, at least, in the
late 1990s) yields this optical illusion. Africa and the Middle East are still going nowhere.
Latin America is doing a mixed job, mixed over time and space. The former Socialist bloc is in
transition: some countries are doing well; others, particularly the former Soviet Union, swing
in high uncertainty (Landes, 1998, p. 518).
For Landes to have arrived at this rather, opaque generalization after pages of
analysis, valid though much of it may be, can hardly be taken as an
encouraging view toward man's ability to affect all those ``natural inequalities''
to some positive degree. Moreover, Landes (1998) seems to suggest that the
poor must pull themselves out of a depressing world environment when he
concludes that ``self-empowerment is essential for the poor. And what of the
poor themselves?'' he asks rhetorically.
History tells us that the most successful cures for poverty come from within. Foreign aid can
help, but like windfall wealth, can also hurt. It can discourage effort and plant a crippling
sense of incapacity. As the African saying has it, ``the hand that receives is always under the
one that gives''. No, what counts is work, thrift, honesty, patience, tenacity. To people haunted
by misery and hunger, that may add up to selfish indifference. But at bottom, no
empowerment is so effective as self-empowerment (Landes, 1998, p. 523).
Table II.
Decade after decade, the growth of population forces people off the land into
the cities and joblessness. Renner (1997, p. 121) concludes that:
Together with population growth, which forces peasants to subdivide plots into smaller and
smaller parcels from one generation to the next, unequal land tenure is causing increasing
landlessness.
Hence the migration to cities. This phenomenon is occurring all over Asia,
Africa and Latin America, creating an area of both potential disaster as well as
opportunity for remedy.
Most of these and other inequality of income issues require heroic policy
approaches by national governments. The commitment to such remedial
policies calls for enormous resolve really sea changes in political and cultural
tides that are so powerfully established and inherent in the historic rhythms of
life in these countries.
Country Observation
Conclusions
What, then, can we do? Note that the issue of sustainable growth had slipped
away from the above discourse. Sadly, the poorest nations in the world are too
preoccupied with survival even to care about it, let alone deal with it. In this,
they will need the help of the more affluent nations and the international
organizations they largely support. While the policies of the IMF and the World
Bank have been roundly criticized in the last decade as to their effectiveness in
bringing about even monetary or financial stability in critical areas or the
world, let alone addressing the income inequality issue by stabilizing monetary
and financial policies and institutions and promoting market incentives and
trade practices, the IMF and World Bank reason that such measures promote
responsible and opportunistic economics destined for a role in the free trade of
the nations. In fact, it often appears, as in the Indonesian and Russian cases,
that such policies exacerbated the problems and the process, and certainly left
behind an environment in which the poorest became drastically poorer than
they were five years ago.
For its part, the UN (1999, pp. 95, 104) offers a number of generalized policy
and action proposals:
. to ensure the generation of pro-poor growth'' and ``for reducing income
inequality'';
. restore full employment and expansion of opportunities as high priority;
. remove anti-poor bias in macroeconomic frameworks;
. invest in capabilities of poor people by restructuring public
expenditures and taxation toward increased access of poor to education;
. increase productivity of small-scale agriculture;
. promote micro enterprises and the informal sector (private start-ups,
shops, distribution outlets, easier credit sources);
. emphasized labor intensive industrialization to expand employment;
International . make public provision for safe water, health services, housing, financial
Journal of Social assets and resource flows to poor people to create productive job
Economics opportunities;
29,6 . provide income transfers during social or economic adjustments and
crises;
488 . remove constraints on poor countries in trade, investment and
technology;
. accelerate debt relief for the highly indebted poor countries.
Easy to list such measures, but difficult to muster the global cooperation and
commitments in the complex and controversial political environment in which
the world's nations struggle to cooperate with effective results.
Downloaded by Universitas Brawijaya At 01:13 31 October 2017 (PT)
The paradox here is that addressing the income inequality issue with
policies such as proposed by the UN to enhance growth via value added GDP
growth does not necessarily yield environmentally sustainable societies nor
progress. Much of the productivity induced economic job creating growth is, in
one way or another, harmful to the environment hence to people, yet is fostered
by governments through tax write offs or outright subsidies. To quote one
economist (Roodman, l999), ``Worldwide, subsidies worth at least $650 billion
equivalent to 9 percent of all government revenues to support logging,
mining, oil drilling, livestock grazing, fishing, energy use and driving [a
car] . . .'', free electricity to farmers in India ``who use it to pump water out of
underground aquifers faster than rain is recharging them. That amount far
exceeds what is spent on environmentally protective subsidies'' i.e. on soil,
forest or water conservation. US industrial style support of agriculture
supports the use of pesticides which contribute to soil erosion and water
pollution. On the other hand, worldwide, many countries are raising taxes on
environmentally damaging pollutants and other practices. A spectacular
success in this regard was the 1987 Montreal Protocol or Treaty on Depletion of
the Ozone Layer, where nations were required to cut emissions and used taxes,
regulations. subsidies and education plans to comply.
Educating our youth in sustainable development principles of conserving
resources and avoiding wasteful production processes must become a high
priority. ``To become ecologically literate,'' an Oberlin Professor reminds us,
``students need to experience education less as an exercise in taking dictation
than as an ongoing dialogue, in which ideas are formulated, tested against
everyday experience, and revised, as they shape the world economy and
geopolitics'' (Roodman, 1999, p. 186).
Beyond the obvious and well known efforts by Western nations and
institutions to promote convergence of incomes around the world while
addressing vital sustainable growth issues, which this paper obviously did not
discover but only reiterate there is more and more questioning of the resolve
of affluent Western or industrialized nations to mount a genuine assault on
either its own or the world's income inequality or environmental dilemmas.
Questions abound of greed, indifference, unwillingness to live with less, to curb Worsening
appetites, to curb the frenzy for more wealth, more material conveniences and income gaps and
excesses, more food, more everything but self sacrifice for the good of the the future
many, or for the desperately poor or the world. We spend more on pet foods and
on animal health care in the USA than on the starving children of Africa, Asia
or Latin America combined. We are also a nation of gun addicts and far too
much violent entertainment. Our frivolous spending exceeds our annual budget 489
for national defense! What we waste in this throw-away society could, when
reconstituted, amply supply a goodly number of the poorest of the world.
Getting at the income disparity issue means getting at the imperfections in our
minds and souls that lead to the indifference to world poverty indifference to
one half of the world's population living on $2 a day and the dire
Downloaded by Universitas Brawijaya At 01:13 31 October 2017 (PT)
UN (1999), Human Development Report, (re Pearson Commission), Oxford University Press,
New York, NY.
Ward, R.J. (1972), ``Aspects of the income inequality problem in less developed countries'',
Economlia Internazlonale, Vol. XXV, No. 1, pp. 122-38.
Wolf, R. (1999), ``Small, midsize cities not sharing in the strong US economy'', USA Today,
11 June, p. 10A.
This article has been cited by:
1. Martin Kelly. 2015. Finding Meaning in the Business Environment. Philosophy of Management 14:2,
135-156. [CrossRef]
Downloaded by Universitas Brawijaya At 01:13 31 October 2017 (PT)