Martin Duys, a member of our Emerging Fellows program initiates publishing a series of blog posts aimed at identifying the impacts of inequality on the world order by 2050. This is his first post in our EF blog inspecting inequality through the lens of security. The views expressed are those of the author and not necessarily those of the APF or its other members.
In 2013 Barack Obama described inequality as the “defining challenge of our time”. In 2014 Thomas Pikkety’s academic tome, “Capital in the Twenty-First Century” was translated into English and became a bestseller. In the same year Oxfam published a report claiming that the net worth of the world’s eighty-five richest people was equivalent to that of the poorest fifty percent of the global population. In 2015, in response, the World Economic Forum declared inequality, alongside climate change, as the challenge for its annual meeting in Davos. Inequality is clearly an issue on the global agenda, but is it one that could potentially lead to instability, conflict, or perhaps even war?
Income inequality is generally expressed by using an index of some kind to describe the manner in which income is distributed across a population. The Gini coefficient is the best-known example but can be difficult to understand. Comparing the share of total income earned by the top segment of a population (the top one percent, or the top ten percent) with that of the bottom fifty percent is more intuitively understandable.
Global income inequality has been steadily increasing for the past two hundred years. Only in the past thirty-five years with the rapid economic growth of countries in the Near and Far East has the trend begun to reverse. Between-country inequality has been decreasing recently, but where people are born is still the single largest factor determining their economic prospects, far more than any individual effort on their part. In-country inequality has been on the rise in most countries since the nineteen-eighties, especially in those countries that have followed a strategy of lower taxes and smaller government in order to encourage economic growth.
The trend reversal in levels of between-country inequality could be a source of increased security concern in the medium to long term. As the economies of countries such as India and China continue to grow their share of the global economy, the balance of power between nations will continue to visibly shift. Will it be possible for China to overtake the United States as the dominant world economy without their falling into what Graham Allison describes as the Thucydides Trap? An almost inevitable war between a previously dominant power and the new one.
One of the obvious consequences of between-country inequality is economic migration from poorer to wealthier countries. The effects of uncontrolled migration on the internal political climates of the destination countries have been only too obvious resulting in increased levels of nationalism and xenophobia. Whether in Germany, the United States, the United Kingdom, or South Africa the response to the presence of newcomers by locals is in many ways consistent and comparable.
There is evidence that high levels of in-country inequality may dampen economic growth prospects, but a clear symptom of in-country inequality is the rapid growth of the private security industry. It is estimated that more than fifty percent of the world’s population lives in countries where there are more people employed by the private security industry than by the national police service.
Some argue that that, although the share of the economic pie accruing to the upper echelons has been increasing, this doesn’t reflect the dramatic improvement in the lives of the lowest echelons brought about by the parallel decrease in levels of absolute poverty. The increase in stability and security that results from a general reduction in absolute poverty far outweighs any potential destabilisation caused by rising inequality.
Some level of inequality can also be seen as a motivating factor that encourages individuals to strive towards achieving the economic rewards that could result from further education, or career advancement.
The issue of inequality is very much on the agenda globally. There are some recent examples of security related issues where inequality has been a contributing factor. The Occupy movement after the 2008 global financial crisis had its roots in issues of inequality, as did the protests in Chile in 2019. The role that inequality plays in contributing to future issues of security will depend largely on whether levels of inequality continue to increase, or whether there is genuine movement from discussion to action on the issue.
© Martin Duys 2020