Does Economic Growth Address Inequality?

on Tuesday, 19 January 2016. Posted in Quotes

Dinyar Godrej argues that growth of the global economy has not reduced inequality

Does Economic Growth Address Inequality?

"Between 1900 and 2008 world population quadrupled and the economy more than kept up with GDP per capita increasing sixfold. If one looks at GDP increase for the world as a whole (factoring in population increase and adjusting for inflation), it has leapt up more than 25-fold1. 

The question that begs is whether the rising tide has lifted all boats. Apart from some success in the very basics, such as literacy and maternal mortality rates, the picture remains familiar: rewards for the very few and stasis or worse for the vast majority.

After this century of growth, 925 million people do not have enough to eat, and just under half the world's population lives in absolute poverty - despite more than enough created wealth to abolish such evils2. Yet traditional economists keep repeating the mantra of growth. Anne Krueger, who has worked for both the World Bank and the IMF, claims 'Poverty reduction is best achieved through making the cake bigger, not by trying to cut it up in a different way." No surprise then that economic growth hasn't effected inequality."

By Dinyar Godrej, An excerpt from "10 Economic Myths", New Internationalist, December 2015.


Notes

1. Rob Dietz and Dan O'Neill, Enough is Enough, Earthscan, 2013.

2. United Nations, http://www.un.org/en/globalissues/briefingpapers/food/vitalstats.shtml

 

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