rich and poor essay

Essay on Inequality Between Rich And Poor

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100 Words Essay on Inequality Between Rich And Poor

What is inequality.

Inequality means not being equal, especially in status and chances to succeed. When talking about rich and poor people, it’s about the big gap between them. Rich people have more money, better houses, and can go to good schools. Poor people struggle for basic things like food and a place to live.

Why It Matters

This gap is important because it can make life unfair. If you’re born poor, it’s harder to get rich. This means not everyone gets the same start in life. Some have lots of help and chances, while others have very few.

What Causes Inequality?

Many things cause this gap. Rules that favor the rich, not enough good jobs, and poor access to education are some reasons. Sometimes, where you’re born or your family can decide if you’ll be rich or poor.

Effects on Society

A big gap between rich and poor can hurt everyone. It can lead to fewer people being happy and more crime. It can also make it hard for a country to grow strong because not all people can help build it.

What Can Be Done?

250 words essay on inequality between rich and poor.

Inequality is when people have different amounts of money, resources, or power. Some individuals have a lot, while others have very little. This difference is most clear when we look at rich and poor people.

Money Matters

Rich people can buy what they want, like good homes, education, and healthcare. Poor people often struggle to buy even basic things like food and a safe place to live. This difference means that rich and poor people live very different lives.

Education and Opportunities

Rich people can afford better schools, which often lead to better jobs and more money. Poor people might not go to school as much, which makes it hard for them to get good jobs. This makes it difficult for poor people to earn more money and improve their lives.

Health and Happiness

Rich people often have better health because they can pay for doctors and healthy food. Poor people may get sick more often because they can’t afford these things. Being sick can make it hard to work or go to school, which can keep people poor.

Why It’s a Problem

When rich and poor people live so differently, it’s not fair. Everyone should have a chance to live a good life. If only a few people have most of the money and power, it can make others feel left out or unhappy. It’s important to find ways to make things more equal so that everyone has the same chances in life.

500 Words Essay on Inequality Between Rich And Poor

Inequality between rich and poor is like a big gap or difference in what people have. Think of it as two groups of people: one group has a lot of money, nice houses, and can buy anything they want, while the other group has very little money, might not have a good place to live, and can’t always buy what they need.

Why Inequality Exists

Many reasons cause this gap. Sometimes, it’s because people are born into families with lots of money, so they start off with more than others. Other times, it’s because of the different chances people get, like better schools or jobs. Also, some places in the world have rules that make it easier for rich people to keep getting richer, while making it hard for poor people to get ahead.

The Effects of Inequality

Rich people, on the other hand, can do a lot more things. They can travel, eat healthy food, and go to the best schools. This can make them even richer as they grow up, because they have more opportunities.

There are ways to make this gap smaller. One way is to make sure everyone gets a good education, no matter how much money their family has. Another way is to have rules that help poor people get better jobs and pay them fair wages. Also, rich people can help by sharing some of their money with those who need it.

People Making a Difference

Inequality between rich and poor is a big issue that affects many people’s lives. It’s important to know about this gap so we can work together to make it smaller. By giving everyone the same chances to learn and work, and by helping each other, we can make the world a fairer place. Remember, even small actions can make a big difference in someone’s life.

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Culture Online

Why do the rich keep getting richer and the poor keep getting poorer?

What compels people to think a certain type of way and understand things different to normal people? How does one break the cycle of poverty?

24 March 2021

That's a great question and something that many economists at UCL and elsewhere work on and also something that forms the central focus of the yearlong mandatory Economics module for UCL BSc Economics first-year students. Let me break down the question into two parts.

First, if you compare between different countries in the world, then you find that the gap between rich and poor countries has to a certain extent shrunk in recent times with the poorest countries in the world becoming quite a lot richer in the last 4 or 5 decades.  This link from Our World in Data  shows this (the graph is interactive, and there's lots more on this topic through the link).

For the second part, if you look at people within a country, particularly rich countries, you can see that inequality has indeed risen since about the late 1970s ( this link again from Our World in Data has more on it ). In the US in particular, this rise has to a certain degree been accompanied by the poor getting poorer over this period (not just the rich getting richer). There are several reasons for this development, including deindustrialisation, the ICT revolution favouring certain types of jobs, fall in unionisation, and globalisation.

Breaking out of the poverty trap is difficult of course, but one of the key factors that have been observed in both rich and poor countries, is investment in education and other human capital. Unfortunately in many of the countries that have seen the greatest rise in inequality in the last few decades, the government's spending on human capital (health, education, etc) has declined very often for ideological reasons. So there is a way to resolve this issue, but the political will is often missing.  

Take a look at this  free online book called 'The Economy'  written by academics at UCL and other universities. The book is used by BSc Economics students in their first year of study. 

Answered by:

Parama Chaudhury

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Richer and Poorer

For about a century, economic inequality has been measured on a scale, from zero to one, known as the Gini index and named after an Italian statistician, Corrado Gini, who devised it in 1912, when he was twenty-eight and the chair of statistics at the University of Cagliari. If all the income in the world were earned by one person and everyone else earned nothing, the world would have a Gini index of one. If everyone in the world earned exactly the same income, the world would have a Gini index of zero. The United States Census Bureau has been using Gini’s measurement to calculate income inequality in America since 1947. Between 1947 and 1968, the U.S. Gini index dropped to .386, the lowest ever recorded. Then it began to climb.

Income inequality is greater in the United States than in any other democracy in the developed world. Between 1975 and 1985, when the Gini index for U.S. households rose from .397 to .419, as calculated by the U.S. Census Bureau, the Gini indices of the United Kingdom, the Netherlands, France, Germany, Sweden, and Finland ranged roughly between .200 and .300, according to national data analyzed by Andrea Brandolini and Timothy Smeeding. But historical cross-country comparisons are difficult to make; the data are patchy, and different countries measure differently. The Luxembourg Income Study, begun in 1983, harmonizes data collected from more than forty countries on six continents. According to the L.I.S.’s adjusted data, the United States has regularly had the highest Gini index of any affluent democracy. In 2013, the U.S. Census Bureau reported a Gini index of .476.

The evidence that income inequality in the United States has been growing for decades and is greater than in any other developed democracy is not much disputed. It is widely known and widely studied. Economic inequality has been an academic specialty at least since Gini first put chalk to chalkboard. In the nineteen-fifties, Simon Kuznets, who went on to win a Nobel Prize, used tax data to study the shares of income among groups, an approach that was further developed by the British economist Anthony Atkinson, beginning with his 1969 paper “On the Measurement of Inequality,” in the Journal of Economic Theory . Last year’s unexpected popular success of the English translation of Thomas Piketty’s “Capital in the Twenty-first Century” drew the public’s attention to measurements of inequality, but Piketty’s work had long since reached American social scientists, especially through a 2003 paper that he published with the Berkeley economist Emmanuel Saez, in The Quarterly Journal of Economics . Believing that the Gini index underestimates inequality, Piketty and Saez favor Kuznets’s approach. (Atkinson, Piketty, Saez, and Facundo Alvaredo are also the creators of the World Top Incomes Database, which collects income-share data from more than twenty countries.) In “Income Inequality in the United States, 1913-1998,” Piketty and Saez used tax data to calculate what percentage of income goes to the top one per cent and to the top ten per cent. In 1928, the top one per cent earned twenty-four per cent of all income; in 1944, they earned eleven per cent, a rate that began to rise in the nineteen-eighties. By 2012, according to Saez’s updated data, the top one per cent were earning twenty-three per cent of the nation’s income, almost the same ratio as in 1928, although it has since dropped slightly.

Political scientists are nearly as likely to study economic inequality as economists are, though they’re less interested in how much inequality a market can bear than in how much a democracy can bear, and here the general thinking is that the United States is nearing its breaking point. In 2001, the American Political Science Association formed a Task Force on Inequality and American Democracy; a few years later, it concluded that growing economic inequality was threatening fundamental American political institutions. In 2009, Oxford University Press published both a seven-hundred-page “Handbook of Economic Inequality” and a collection of essays about the political consequences of economic inequality whose argument is its title: “The Unsustainable American State.” There’s a global version of this argument, too. “Inequality Matters,” a 2013 report by the United Nations, took the view—advanced by the economist Joseph Stiglitz in his book “The Price of Inequality”—that growing income inequality is responsible for all manner of political instability, as well as for the slowing of economic growth worldwide. Last year, when the Pew Research Center conducted a survey about which of five dangers people in forty-four countries consider to be the “greatest threat to the world,” many of the countries polled put religious and ethnic hatred at the top of their lists, but Americans and many Europeans chose inequality.

What’s new about the chasm between the rich and the poor in the United States, then, isn’t that it’s growing or that scholars are studying it or that people are worried about it. What’s new is that American politicians of all spots and stripes are talking about it, if feebly: inequality this, inequality that. In January, at a forum sponsored by Freedom Partners (a free-market advocacy group with ties to the Koch brothers), the G.O.P. Presidential swains Ted Cruz, Rand Paul, and Marco Rubio battled over which of them disliked inequality more, agreeing only that its existence wasn’t their fault. “The top one per cent earn a higher share of our income, nationally, than any year since 1928,” Cruz said, drawing on the work of Saez and Piketty. Cruz went on, “I chuckle every time I hear Barack Obama or Hillary Clinton talk about income inequality, because it’s increased dramatically under their policies.” No doubt there has been a lot of talk. “Let’s close the loopholes that lead to inequality by allowing the top one per cent to avoid paying taxes on their accumulated wealth,” Obama said during his State of the Union address. Speaker of the House John Boehner countered that “the President’s policies have made income inequality worse.”

The reason Democrats and Republicans are fighting over who’s to blame for growing economic inequality is that, aside from a certain amount of squabbling, it’s no longer possible to deny that it exists—a development that’s not to be sneezed at, given the state of the debate on climate change. That’s not to say the agreement runs deep; in fact, it couldn’t be shallower. The causes of income inequality are much disputed; so are its costs. And knowing the numbers doesn’t appear to be changing anyone’s mind about what, if anything, should be done about it.

Robert Putnam’s new book, “Our Kids: The American Dream in Crisis” (Simon & Schuster), is an attempt to set the statistics aside and, instead, tell a story. “Our Kids” begins with the story of the town where Putnam grew up, Port Clinton, Ohio. Putnam is a political scientist, but his argument is historical—it’s about change over time—and fuelled, in part, by nostalgia. “My hometown was, in the 1950s, a passable embodiment of the American Dream,” he writes, “a place that offered decent opportunity for all the kids in town, whatever their background.” Sixty years later, Putnam says, Port Clinton “is a split-screen American nightmare, a community in which kids from the wrong side of the tracks that bisect the town can barely imagine the future that awaits the kids from the right side of the tracks.”

Inequality-wise, Port Clinton makes a reasonable Middletown. According to the American Community Survey conducted by the U.S. Census Bureau, Port Clinton’s congressional district, Ohio’s ninth, has a Gini index of .467, which is somewhat lower than the A.C.S.’s estimate of the national average. But “Our Kids” isn’t a book about the Gini index. “Some of us learn from numbers, but more of us learn from stories,” according to an appendix that Putnam co-wrote with Jennifer M. Silva. Putnam, the author of “Bowling Alone,” is the director of the Saguaro Seminar for civic engagement at Harvard’s Kennedy School of Government; Silva, a sociologist, has been a postdoctoral fellow there. In her 2013 book “Coming Up Short: Working-Class Adulthood in an Age of Uncertainty” (Oxford), Silva reported the results of interviews she conducted with a hundred working-class adults in Lowell, Massachusetts and Richmond, Virginia, described her account of the structural inequalities that shape their lives as “a story of institutions—not individuals or their families,” and argued that those inequalities are the consequence of the past half century’s “massive effort to roll back social protections from the market.” For “Our Kids,” Silva visited Robert Putnam’s home town and interviewed young people and their parents. Putnam graduated from Port Clinton High School in 1959. The surviving members of his class are now in their mid-seventies. Putnam and Silva sent them questionnaires; seventy-five people returned them. Silva also spent two years interviewing more than a hundred young adults in nine other cities and counties across the nation. As Putnam and Silva note, Silva conducted nearly all of the interviews Putnam uses in his book.

“Our Kids” is a heartfelt portrait of four generations: Putnam’s fellow 1959 graduates and their children, and the kids in Port Clinton and those nine other communities today and their parents. The book tells more or less the same story that the numbers tell; it’s just got people in it. Specifically, it’s got kids: the kids Putnam used to know, and, above all, the kids Silva interviewed. The book proceeds from the depressing assumption that presenting the harrowing lives of poor young people is the best way to get Americans to care about poverty.

Putnam has changed the names of all his subjects and removed certain identifying details. He writes about them as characters. First, there’s Don. He went to Port Clinton High School with Putnam. His father worked two jobs: an eight-hour shift at Port Clinton Manufacturing, followed by seven and a half hours at a local canning plant. A minister in town helped Don apply to university. “I didn’t know I was poor until I went to college,” Don says. He graduated from college, became a minister, and married a high-school teacher; they had one child, who became a high-school librarian. Libby, another member of Putnam’s graduating class, was the sixth of ten children. Like Don’s parents, neither of Libby’s parents finished high school. Her father worked at Standard Products, a factory on Maple Street that made many different things out of rubber, from weather stripping to tank treads. Libby won a scholarship to the University of Toledo, but dropped out to get married and have kids. Twenty years later, after a divorce, she got a job as a clerk in a lumberyard, worked her way up to becoming a writer for a local newspaper, and eventually ran for countywide office and won.

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All but two of the members of Putnam’s graduating class were white. Putnam’s wistfulness toward his childhood home town is at times painful to read. The whiteness of Port Clinton in the nineteen-fifties was not mere happenstance but the consequence of discriminatory housing and employment practices. I glanced through the records of the Ohio chapter of the N.A.A.C.P., which included a branch in Port Clinton. The Ohio chapter’s report for 1957 chronicles, among other things, its failed attempt to gain passage of statewide Fair Housing legislation; describes how “cross burnings occurred in many cities in Ohio”; recounts instances of police brutality, including in Columbus, where a patrolman beat a woman “with the butt of his pistol all over her face and body”; and states that in Toledo, Columbus, “and in a number of other communities, the Association intervened in situations where violence flared up or was threatened when Negro families moved into formerly ‘all-white neighborhoods.’ ” Thurgood Marshall, the director of the N.A.A.C.P.’s Legal Defense and Educational Fund, spoke in Ohio in 1958, after which a sympathetic Cleveland newspaper wrote that Marshall “will never be named to the Supreme Court.” In 1960, the Ohio N.A.A.C.P. launched a statewide voter-registration drive. One pamphlet asked, “Are you permitted to live wherever you please in any Ohio City?” Putnam acknowledges that there was a lot of racism in Port Clinton, but he suggests that, whatever hardships the two black kids in his class faced because they were black, the American dream was nevertheless theirs. This fails to convince. As one of those two kids, now grown, tells Putnam, “Your then was not my then, and your now isn’t even my now.”

In any case, the world changed, and Port Clinton changed with it. “Most of the downtown shops of my youth stand empty and derelict,” Putnam writes. In the late nineteen-sixties, the heyday of the Great Society, when income inequality in the United States was as low as it has ever been, the same was probably true of Port Clinton. But in the nineteen-seventies the town’s manufacturing base collapsed. Standard Products laid off more than half of its workers. In 1993, the plant closed. Since then, unemployment has continued to rise and wages to fall. Between 1999 and 2013, the percentage of children in Port Clinton living in poverty rose from ten to forty.

Silva found David hanging out in a park. His father, currently in prison, never had a steady job. David’s parents separated when he was a little boy. He bounced around, attending seven elementary schools. When he was thirteen, he was arrested for robbery. He graduated from high school only because he was given course credit for hours he’d worked at Big Boppers Diner (from which he was fired after graduation). In 2012, when David was eighteen, he got his girlfriend pregnant. “I’ll never get ahead,” he posted on his Facebook page last year, after his girlfriend left him. “I’m FUCKING DONE .”

Wealthy newcomers began arriving in the nineteen-nineties. On the shores of Lake Erie, just a few miles past Port Clinton’s trailer parks, they built mansions and golf courses and gated communities. “Chelsea and her family live in a large white home with a wide porch overlooking the lake,” Putnam writes, introducing another of his younger characters. Chelsea was the president of her high school’s student body and editor of the yearbook. Her mother, Wendy, works part time; her father, Dick, is a businessman. In the basement of their house, Wendy and Dick had a “1950s-style diner” built so that Chelsea and her brother would have a place to hang out with their friends. When Chelsea’s brother got a bad grade in school, Wendy went all the way to the school board to get it changed. Chelsea and her brother are now in college. Wendy does not appear to believe in welfare. “You have to work if you want to get rich,” she says. “If my kids are going to be successful, I don’t think they should have to pay other people who are sitting around doing nothing for their success.”

Aside from the anecdotes, the bulk of “Our Kids” is an omnibus of social-science scholarship. The book’s chief and authoritative contribution is its careful presentation for a popular audience of important work on the erosion, in the past half century, of so many forms of social, economic, and political support for families, schools, and communities—with consequences that amount to what Silva and others have called the “privatization of risk.” The social-science literature includes a complicated debate about the relationship between inequality of outcome (differences of income and of wealth) and inequality of opportunity (differences in education and employment). To most readers, these issues are more familiar as a political disagreement. In American politics, Democrats are more likely to talk about both kinds of inequality, while Republicans tend to confine their concern to inequality of opportunity. According to Putnam, “All sides in this debate agree on one thing, however: as income inequality expands, kids from more privileged backgrounds start and probably finish further and further ahead of their less privileged peers, even if the rate of socioeconomic mobility is unchanged.” He also takes the position, again relying on a considerable body of scholarship, that, “quite apart from the danger that the opportunity gap poses to American prosperity, it also undermines our democracy.” Chelsea is interested in politics. David has never voted.

The American dream is in crisis, Putnam argues, because Americans used to care about other people’s kids and now they only care about their own kids. But, he writes, “America’s poor kids do belong to us and we to them. They are our kids.” This is a lot like his argument in “Bowling Alone.” In high school in Port Clinton, Putnam was in a bowling league; he regards bowling leagues as a marker of community and civic engagement; bowling leagues are in decline; hence, Americans don’t take care of one another anymore. “Bowling Alone” and “Our Kids” also have the same homey just-folksiness. And they have the same shortcomings. If you don’t miss bowling leagues or all-white suburbs where women wear aprons—if Putnam’s then was not your then and his now isn’t your now—his well-intentioned “we” can be remarkably grating.

In story form, the argument of “Our Kids” is that while Wendy and Dick were building a fifties-style diner for their kids in the basement of their lakefront mansion, grade-grubbing with their son’s teachers, and glue-gunning the decorations for their daughter’s prom, every decent place to hang out in Port Clinton closed its doors, David was fired from his job at Big Boppers, and he got his girlfriend pregnant because, by the time David and Chelsea were born, in the nineteen-nineties, not only was Standard Products out of business but gone, too, was the sense of civic obligation and commonweal—everyone caring about everyone else’s kids—that had made it possible for Don and Libby to climb out of poverty in the nineteen-fifties and the nineteen-sixties. “Nobody gave a shit,” David says. And he’s not wrong.

“Our Kids” is a passionate, urgent book. It also has a sad helplessness. Putnam tells a story teeming with characters and full of misery but without a single villain. This is deliberate. “This is a book without upper-class villains,” he insists in the book’s final chapter. In January, Putnam tweeted, “My new book ‘Our Kids’ shows a growing gap between rich kids and poor kids. We’ll work with all sides on solutions.” It’s easier to work with all sides if no side is to blame. But Putnam’s eagerness to influence Congress has narrative consequences. If you’re going to tell a story about bad things happening to good people, you’ve got to offer an explanation, and, when you make your arguments through characters, your reader will expect that explanation in the form of characters. I feel bad for Chelsea. But I feel worse for David. Am I supposed to hate Wendy?

Some people make arguments by telling stories; other people make arguments by counting things. Charles Dickens was a story man. In “Hard Times” (1854), a novel written when statistics was on the rise, Dickens’s villain, Thomas Gradgrind, was a numbers man, “a man of facts and calculations,” who named one of his sons Adam Smith and another Malthus. “With a rule and a pair of scales, and the multiplication table always in his pocket, Sir, ready to weigh and measure any parcel of human nature, and tell you exactly what it comes to.”

Numbers men are remote and cold of heart, Dickens thought. But, of course, the appeal of numbers lies in their remoteness and coldness. Numbers depersonalize; that remains one of their chief claims to authority, and to a different explanatory force than can be found in, say, a poem. “Quantification is a technology of distance,” as the historian of science Theodore Porter has pointed out. “Reliance on numbers and quantitative manipulation minimizes the need for intimate knowledge and personal trust.” It’s difficult to understand something like income inequality across large populations and to communicate your understanding of it across vast distances without counting. But quantification’s lack of intimacy is also its weakness; it represents not only a gain but also a loss of knowledge.

Corrado Gini, he of the Gini index, was a numbers man, at a time when statistics had become a modern science. In 1925, four years after Gini wrote “Measurement of Inequality of Incomes,” he signed the “Manifesto of Fascist Intellectuals” (he was the only statistician to do so) and was soon running the Presidential Commission for the Study of Constitutional Reforms. As Jean-Guy Prévost reported in “A Total Science: Statistics in Liberal and Fascist Italy” (2009), Gini’s work was so closely tied to the Fascist state that, in 1944, after the regime fell, he was tried for being an apologist for Fascism. In the shadow of his trial, he joined the Movimento Unionista Italiano, a political party whose objective was to annex Italy to the United States. “This would solve all of Italy’s problems,” the movement’s founder, Santi Paladino, told a reporter for Time . (“Paladino has never visited the U.S., though his wife Francesca lived 24 years in The Bronx,” the magazine noted.) But, for Gini, the movement’s purpose was to provide him with some anti-Fascist credentials.

The story of Gini is a good illustration of the problem with stories, which is that they personalize (which is also their power). His support for Fascism doesn’t mean that the Gini index isn’t valuable. It is valuable. The life of Corrado Gini can’t be used to undermine all of statistical science. Still, if you wanted to write an indictment of statistics as an instrument of authoritarian states, and if you had a great deal of other evidence to support that indictment—including other stories and, ideally, numbers—why yes, Gini would be an excellent character to introduce in Chapter 1.

Because stories contain one kind of truth and numbers another, many writers mix and match, telling representative stories and backing them up with aggregate data. Putnam, though, doesn’t so much mix and match as split the difference. He tells stories about kids but presents data about the economy. That’s why “Our Kids” has heaps of victims but not a single villain. “We encounter Elijah in a dingy shopping mall on the north side of Atlanta, during his lunch break from a job packing groceries,” Putnam writes. “Elijah is thin and small in stature, perhaps five foot seven, and wears baggy clothes that bulk his frame: jeans belted low around his upper thighs, a pair of Jordans on his feet.” As for why Elijah is packing groceries, the book offers not characters—there are no interviews, for instance, with members of the Georgia legislature or the heads of national corporations whose businesses have left Atlanta—but numbers, citing statistics about the city (“Large swaths of southern and western Atlanta itself are over 95 percent black, with child poverty rates ranging from 50 percent to 80 percent”) and providing a series of charts reporting the results of studies about things like class differences in parenting styles and in the frequency of the family dinner.

In “The Age of Acquiescence: The Life and Death of American Resistance to Organized Wealth and Power” (Little, Brown), Steve Fraser fumes that what’s gone wrong with political discourse in America is that the left isn’t willing to blame anyone for anything anymore. There used to be battle cries. No more kings! Down with fat cats! Damn the moneycrats! Like Putnam’s argument, Fraser’s is both historical and nostalgic. Fraser longs for the passion and force with which Americans of earlier generations attacked aggregated power. Think of the way Frederick Douglass wrote about slavery, Ida B. Wells wrote about lynching, Ida Tarbell wrote about Standard Oil, Upton Sinclair wrote about the meatpacking industry, and Louis Brandeis wrote about the money trust. These people weren’t squeamish about villains.

To chronicle the rise of acquiescence, Fraser examines two differences between the long nineteenth century and today. “The first Gilded Age, despite its glaring inequities, was accompanied by a gradual rise in the standard of living; the second by a gradual erosion,” he writes. In the first Gilded Age, everyone from reporters to politicians apparently felt comfortable painting plutocrats as villains; in the second, this is, somehow, forbidden. “If the first Gilded Age was full of sound and fury,” he writes, “the second seemed to take place in a padded cell.” Fraser argues that while Progressive Era muckrakers ended the first Gilded Age by drawing on an age-old tradition of dissent to criticize prevailing economic, social, and political arrangements, today’s left doesn’t engage in dissent; it engages in consent, urging solutions that align with neoliberalism, technological determinism, and global capitalism: “Environmental despoiling arouses righteous eating; cultural decay inspires charter schools; rebellion against work becomes work as a form of rebellion; old-form anticlericalism morphs into the piety of the secular; the break with convention ends up as the politics of style; the cri de coeur against alienation surrenders to the triumph of the solitary; the marriage of political and cultural radicalism ends in divorce.” Why not blame the financial industry? Why not blame the Congress that deregulated it? Why not blame the system itself? Because, Fraser argues, the left has been cowed into silence on the main subject at hand: “What we could not do, what was not even speakable, was to tamper with the basic institutions of financial capitalism.”

Putnam closes “Our Kids” with a chapter called “What Is to Be Done?” Tampering with the basic institutions of financial capitalism is not on his to-do list. The chapter includes one table, one chart, many stories, and this statement: “The absence of personal villains in our stories does not mean that no one is at fault.” At fault are “social policies that reflect collective decisions,” and, “insofar as we have some responsibility for those collective decisions, we are implicated by our failure to address removable barriers to others’ success.” What can Putnam’s “we” do? He proposes changes in four realms: family structure, parenting, school, and community. His policy recommendations include expanding the earned-income tax credit and protecting existing anti-poverty programs; implementing more generous parental leaves, better child-care programs, and state-funded preschool; equalizing the funding of public schools, providing more community-based neighborhood schools, and increasing support for vocational high-school programs and for community colleges; ending pay-to-play extracurricular activities in public schools and developing mentorship programs that tie schools to communities and community organizations.

All of these ideas are admirable, many are excellent, none are new, and, at least at the federal level, few are achievable. The American political imagination has become as narrow as the gap between rich and poor is wide.

“Inequality: What Can Be Done?,” by Anthony Atkinson, will be published this spring (Harvard). Atkinson is a renowned expert on the measurement of economic inequality, but in “Inequality” he hides his math. “There are a number of graphs, and a small number of tables,” he writes, by way of apology, and he paraphrases Stephen Hawking: “Every equation halves the number of readers.”

Much of the book is a discussion of specific proposals. Atkinson believes that solutions like Putnam’s, which focus on inequality of opportunity, mainly through reforms having to do with public education, are inadequate. Atkinson thinks that the division between inequality of outcome and inequality of opportunity is largely false. He believes that tackling inequality of outcome is a very good way to tackle inequality of opportunity. (If you help a grownup get a job, her kids will have a better chance of climbing out of poverty, too.) Above all, he disagrees with the widespread assumption that technological progress and globalization are responsible for growing inequality. That assumption, he argues, is wrong and also dangerous, because it encourages the belief that growing inequality is inevitable.

Atkinson points out that neither globalization nor rapid technological advance is new and there are, therefore, lessons to be learned from history. Those lessons do not involve nostalgia. (Atkinson is actually an optimistic sort, and he spends time appreciating rising standards of living, worldwide.) One of those lessons is that globalizing economies aren’t like hurricanes or other acts of God or nature. Instead, they’re governed by laws regulating things like unions and trusts and banks and wages and taxes; laws are passed by legislators; in democracies, legislators are elected. So, too, new technologies don’t simply fall out of the sky, like meteors or little miracles. “The direction of technological change is the product of decisions by firms, researchers, and governments,” Atkinson writes. The iPhone exists, as Mariana Mazzucato demonstrated in her 2013 book “The Entrepreneurial State,” because various branches of the U.S. government provided research assistance that resulted in several key technological developments, including G.P.S., multi-touch screens, L.C.D. displays, lithium-ion batteries, and cellular networks.

Atkinson isn’t interested in stories the way Putnam is interested in stories. And he isn’t interested in villains the way Fraser is interested in villains. But he is interested in responsible parties, and in demanding government action. “It is not enough to say that rising inequality is due to technological forces outside our control,” Atkinson writes. “The government can influence the path taken.” In “Inequality: What Can Be Done?,” he offers fifteen proposals, from the familiar (unemployment programs, national savings bonds, and a more progressive tax structure) to the novel (a governmental role in the direction of technological development, a capital endowment or “minimum inheritance” paid to everyone on reaching adulthood), along with five “ideas to pursue,” which is where things get Piketty (a global tax on wealth, a minimum tax on corporations).

In Port Clinton, Ohio, a barbed-wire fence surrounds the abandoned Standard Products factory; the E.P.A. has posted signs warning that the site is hazardous. There’s no work there anymore, only poison. Robert Putnam finds that heartbreaking. Steve Fraser wishes people were angrier about it. Anthony Atkinson thinks something can be done. Atkinson’s specific policy recommendations are for the United Kingdom. In the United States, most of his proposals are nonstarters, no matter how many times you hear the word “inequality” on “Meet the Press” this year.

It might be that people have been studying inequality in all the wrong places. A few years ago, two scholars of comparative politics, Alfred Stepan, at Columbia, and the late Juan J. Linz—numbers men—tried to figure out why the United States has for so long had much greater income inequality than any other developed democracy. Because this disparity has been more or less constant, the question doesn’t lend itself very well to historical analysis. Nor is it easily subject to the distortions of nostalgia. But it does lend itself very well to comparative analysis.

Stepan and Linz identified twenty-three long-standing democracies with advanced economies. Then they counted the number of veto players in each of those twenty-three governments. (A veto player is a person or body that can block a policy decision. Stepan and Linz explain, “For example, in the United States, the Senate and the House of Representatives are veto players because without their consent, no bill can become a law.”) More than half of the twenty-three countries Stepan and Linz studied have only one veto player; most of these countries have unicameral parliaments. A few countries have two veto players; Switzerland and Australia have three. Only the United States has four. Then they made a chart, comparing Gini indices with veto-player numbers: the more veto players in a government, the greater the nation’s economic inequality. This is only a correlation, of course, and cross-country economic comparisons are fraught, but it’s interesting.

Then they observed something more. Their twenty-three democracies included eight federal governments with both upper and lower legislative bodies. Using the number of seats and the size of the population to calculate malapportionment, they assigned a “Gini Index of Inequality of Representation” to those eight upper houses, and found that the United States had the highest score: it has the most malapportioned and the least representative upper house. These scores, too, correlated with the countries’ Gini scores for income inequality: the less representative the upper body of a national legislature, the greater the gap between the rich and the poor.

The growth of inequality isn’t inevitable. But, insofar as Americans have been unable to adopt measures to reduce it, the numbers might seem to suggest that the problem doesn’t lie with how Americans treat one another’s kids, as lousy as that is. It lies with Congress. ♦

Money and Happiness in Poor and Wealthy Societies Essay

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Introduction

Positive correlation between happiness and money, insignificant correlation between happiness and money, works cited.

Many societies believe that money does not buy happiness. However, others affirm the contrary belief by saying that income levels affect people’s happiness. Before delving into the details of these perceptions, it is important to understand that happiness is an emotional or mental state where people experience more positive than negative feelings. These feelings outline how people interact with different stimuli, such as income, to influence their happiness.

People experience different emotional effects through such stimuli. The positive and negative effect refers to the effects that varying income levels have on people’s feelings and emotions. In detail, a positive effect refers to the extent that a person experiences positive moods (such as joy and interest), while negative affect refers to negative emotions (such as anxiety, sadness, and depression) that most people experience from varying income levels.

Using the above definitions, happiness, and emotional outcomes, Kesebir and Diener (117) say unsurprisingly different researchers have investigated the relationship between happiness and money. Indeed, many societies believe that life is not about (merely) living, but living a fulfilling and happy life (quality life). This realization has caused many philosophers to explore different ways of rising above the mere existence of life to a more fulfilling purpose of living.

Comprehending the motivations for pursuing money and happiness is the key to understanding this correlation. In this paper, I argue that wealthy and poor societies have different relationships between money and happiness. In detail, after exploring different types of correlation between the two variables, I explain that the relationship between both variables is strong in low-income societies, but it gradually weakens as income increases (especially in wealthy societies). Based on this understanding, money affects happiness to a limited extent. Indeed, beyond the satisfaction of basic human needs, other non-monetary factors, such as social relationships, have a more significant correlation with happiness than money does.

The positive correlation between money and happiness mainly exists in low-income societies. The utilitarian philosophies of the modern era affirm this relationship (Kesebir and Diener 117). However, their influences stem from common beliefs in the 19 th century (and beyond), which equaled happiness to utility (utility refers to the ability of material possessions to satisfy human needs and wants). Using the relationship between happiness and utility, many medieval societies believed the latter was equal to human pleasure (Kesebir and Diener 117). Jeremy Bentham and Aristotle (among other philosophers) supported this view by saying that most people should strive to experience more pleasure than pain (as a measure of their happiness) (Kesebir and Diener 117). They also argued that different societies should use this basis for understanding morality and legislation (Kesebir and Diener 117).

As many societies embraced this idea, the medieval conception of happiness, as a function of virtue and perfection, disappeared (Kesebir and Diener 117). People started to see material possessions as more important than gaining respect from society (by practicing good morals and virtues). Similarly, this ideological shift made it uncommon for many people to focus on issues of human well-being (human well-being closely associates with happiness because it refers to a state of health or prosperity) (Kesebir and Diener 117). Therefore, their focus shifted to material possessions as a measure of happiness.

In line with the above argument, Aristotle argued that wealth was an important requirement for happiness. Easterlin (3) shared the same view by explaining America’s perception of happiness. He said many US citizens perceived happiness through “material” lenses. The Easterlin (3) paradox summed this view by showing that income had a direct correlation with happiness. It based this argument on several cross-national studies, which showed that rich people were happier than poor people were. For example, in a 1970 American study, Easterlin (4) found out that less than one-quarter of low-income people believed they were “happy” people.

Comparatively, about double this number of respondents (in the high-income group) said they were happy. The same findings appeared in more than 30 similar researches conducted in other parts of the world. Although the same study established a correlation between happiness and education, health, and family relationships, income emerged as having the strongest and most consistent relationship with happiness (Easterlin 4).

Although Easterlin (3) used the above findings to support the correlation between income and happiness, he said increasing everybody’s income weakened the correlation between both variables. Therefore, income variations affected people’s perceptions of happiness (people always judge their happiness based on what their peers think of them). Lane (57) supported these views when he said that most people often adjusted to a new standard of measuring their happiness whenever they increased their income levels (the desire for money tapers off as income increases). Using this analogy, Easterlin (5) believed that wealthy nations were no happier than poor nations. Based on the same logic, he said that people’s subjective perceptions of happiness depended on their welfare perceptions (Easterlin 5).

Therefore, as opposed to perceiving their happiness through “material” lenses, they did so by understanding how it compared to their social norms. Consequently, people who are above the “norm” feel happier than those who are below it (how people perceive the social norm depends on the economic well-being of the society).

Although Easterlin (5) argued that happiness was subjective to the national income (as shown above), researchers who have conducted studies that are more recently told that the correlation between happiness and well-being was stronger than his paradox showed. Consequently, they revised this model by saying that increased national income affected the overall sense of individual well-being in a country. Unlike the data relied on Easterlin (4), researchers established the above fact, using findings that are more reliable. For example, Lane (56) quoted the findings of a 1976 transnational study, which showed that a nation’s poverty index affected the well-being of its citizens (such as people’s attitudes, feelings, and perceptions). These studies showed that personal satisfaction increased with increased levels of economic development (money “bought” happiness).

Money has an insignificant correlation with happiness in wealthy societies. This is an old view of this relationship because philosophers from ancient Greece started exploring this insignificant correlation in 370 BC (Kesebir and Diener 118). They said material wealth had an indirect correlation with happiness. Based on this understanding, they believed that a man’s mind defined his level of happiness. Similarly, they believed it was difficult for people to be happy if they lacked morals and virtues (money was not a priority). Democritus and Epicurus (two ancient Greek philosophers) mainly advanced this view (Kesebir and Diener 118).

Similarly, other ancient Greek philosophers, such as Socrates and his student, Plato, refuted the claim that happiness depended on the “enjoyment” of beautiful and good things. They believed that all people needed to show prudence and honor to be happy (Kesebir and Diener 118). Lane (56) has also reported the same findings after analyzing the relationship between money and happiness in a contextual approach. Like, Easterlin (3), he said in many developed countries, money did not increase happiness levels. Frank Andrews and Stephen Withey (cited in Lane 58) also supported these findings when they said that different socioeconomic groups showed small differences in people’s well-being. They also said that income levels had an insignificant impact on life as a whole.

The above findings show the different correlations between income and happiness. However, I believe this limited correlation mainly emerges in wealthy societies, as opposed to low-income societies. For example, non-monetary issues have a strong correlation with happiness in wealthy societies. Economists also affirm this fact through the Maslow hierarchy of needs because they say people crave for higher-level needs, such as love, social relationships, and recognition after they have met their primary needs such as food, shelter, sex, and clothing. Since many people in wealthy societies do not struggle to meet basic human needs, the insignificant correlation between happiness and money applies to this group of people.

Some philosophers maintain a “middle ground” by supporting the limited influence of money on happiness. Epicureans also supported this view because they said wealth was important to people’s happiness, to the extent that it gave people their basic needs, like shelter and clothing (Kesebir and Diener 118). However, beyond this threshold, it had an insignificant relationship with happiness. This analysis affirms the different correlations between happiness and income across poor and wealthy nations. Indeed, Kesebir and Diener 117) say there is a strong correlation between happiness and income in low-income countries, while wealthy economies experience an insignificant correlation between the two variables. A comparative study conducted in America revealed that the wealthiest Americans (profiled in Forbes) were only modestly happier than middle-income and low-income control groups that lived with them in the same location (Lane 58).

Based on the above analysis, income is not the only variable that affects happiness. Non-monetary issues affect happiness too. Lane (58) supports this argument by highlighting the need to distinguish individual pleasures from human well-being issues. Individual pleasures may depend on income, but people’s well-being is subjective. Therefore, besides income, other factors affect people’s happiness. To support this view, Lane (58) cited a 1982 study (conducted by Gallup), which asked Americans what made them happy (Lane 58). The respondents said family relationships made them happier than money did. Other things that made them happy included television, friends, reading books (and other pleasures) that most people from low-income families could afford (Lane 57).

Therefore, income does not solely define happiness. This analysis shows that although most people need to have adequate money to be happy, money, in isolation, is not sufficient to guarantee happiness, beyond providing basic needs. In the book, Happy People , Jonathan Freedman (cited in Lane 57) affirmed the above fact by saying that rich and poor people have different perceptions of the role of wealth in increasing people’s happiness levels. Overall, while many rich people understand that wealth does not automatically guarantee happiness, people from low-income societies believe it does. This was similarly true for their perceptions of well-being. Therefore, when a person is extremely poor, money looks like a “savior” of some sort, but as income increases, this idea disappears. This analogy has stronger merit than the general perception that money “buys” happiness. Indeed, not all happy people are rich. In this regard, many human societies have focused so much on material wealth that they have forgotten. It does not guarantee happiness.

After weighing the findings of this paper, easily, a person could affirm an indirect relationship between happiness and income. Some researchers say money has a direct relationship with happiness, while others do not affirm this relationship. This inconsistency stems from the contextual appeal of income and wealth to human societies. For example, income has a weak correlation with happiness in wealthy societies. However, this relationship is stronger in low-income societies. Evidence also shows that there was a weak correlation between income and happiness in medieval societies because many people believed adhering to human virtues made people happy (this was the medieval standard for happiness).

However, the modern era changed this perception and shifted the societal focus from virtues and morals to material wealth. Now, people attach more value to income and similar “material” factors. However, as changes to the Easterlin (3) paradox suggest, wealth increases happiness to a limited extent. Overall, this paper shows that income and happiness have a “contextual” relationship. For example, if there is a broad increase in income across a nation, this correlation weakens (the Easterlin (3) paradox mainly supports this view); however, as income levels decrease, the correlation strengthens. Consequently, there is a strong correlation between money and happiness in low-income societies. In wealthy societies, non-monetary factors like health and the quality of family relationships have a stronger impact on happiness than money does.

Easterlin, Richard. “Does Money Buy Happiness?” Public Interest 30.3 (1973): 3-10. Print.

Kesebir, Pelin and Ed Deiner. “In pursuit of happiness: Empirical Answers to Philosophical Questions.” Perspectives on Psychological Science 3.2 (2008): 117-123. Print.

Lane, Robert. “Does Money buy Happiness?” Public Interest 113.3 (1993): 56-65. Print.

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Modern Technology Is Increasing The Gap Between Rich and Poor - IELTS Essay

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Model Essay 1

The advent of modern technology has sparked a debate on its impact on socio-economic disparities, with opinions diverging on whether it widens or narrows the gap between the affluent and the underprivileged. This essay contends that while technology can indeed exacerbate inequality, its potential to democratize access to information and opportunities predominantly serves to bridge the socio-economic divide.

Proponents of the view that technology aggravates inequality argue that the high cost of cutting-edge technologies and the skills required to harness them create significant barriers for the less affluent. This phenomenon, known as the "digital divide," implies that wealthier individuals and nations can leverage technology to gain even more wealth, thus exacerbating the socio-economic disparities. For instance, access to high-speed internet, indispensable for many modern professions, remains a luxury in numerous parts of the world. This disparity is further highlighted by the digital literacy gap, which prevents the underprivileged from fully participating in the digital economy, underscoring the widening gap.

Conversely, the argument that technology acts as a great equalizer is both compelling and supported by numerous global success stories. Online education platforms, for example, offer free or low-cost courses to millions, providing a vital ladder for socio-economic mobility and bridging the knowledge divide. Furthermore, mobile banking and fintech innovations have revolutionized financial inclusion in regions previously underserved by traditional banking systems, enabling small entrepreneurs in remote areas to access credit, manage finances, and grow their businesses efficiently. These advancements not only underscore technology's potential to level the playing field but also illustrate its role in fostering entrepreneurial spirit and innovation among the economically disadvantaged.

In conclusion, while it is undeniable that technological advancements can initially deepen socio-economic rifts due to unequal access and capability gaps, the broader perspective reveals a trend towards inclusivity and empowerment. As we harness technology responsibly and inclusively, its capacity to dismantle barriers and foster equality becomes increasingly apparent, making it a pivotal tool in the quest to narrow the gap between rich and poor.

Model Essay 2

In the contemporary era, the role of modern technology in shaping socio-economic disparities has sparked a polarizing debate. Some argue it exacerbates the divide between the affluent and the destitute, while others believe it bridges this gap. This essay contends that technology serves both to widen and narrow these disparities, depending on its accessibility and application.

On one hand, technology's proponents highlight its democratizing potential. The advent of online education platforms, for instance, has rendered knowledge more accessible, enabling individuals from underprivileged backgrounds to acquire skills and education that were previously beyond their reach. Such platforms have not only democratized education but have also empowered individuals with the tools necessary for socio-economic advancement, thus potentially leveling the playing field. Moreover, digital financial services have facilitated greater financial inclusion, allowing people in remote areas to access banking services, thereby fostering economic empowerment and reducing geographical barriers to financial services.

Conversely, the critics of technological advancement point to the digital divide as a significant factor that exacerbates inequality. Access to cutting-edge technology often requires substantial financial resources, making it a privilege of the wealthy. Consequently, while the affluent have the luxury of leveraging technology to amplify their wealth, the poor are left further behind due to lack of access. This disparity is evident in the job market, where high-paying roles increasingly demand advanced technological skills, thus marginalizing those without the means to acquire such education. Moreover, this gap widens as technology evolves, requiring constant upskilling that disproportionately favors the economically advantaged.

In conclusion, while technology has the potential to bridge the gap between the rich and poor by democratizing access to education and financial services, the prevailing digital divide underscores its role in widening socio-economic disparities. Ultimately, the impact of technology on socio-economic inequality is contingent upon efforts to ensure equitable access.

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Study Shows Income Gap Between Rich and Poor Keeps Growing, With Deadly Effects

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By Lola Fadulu

• Published Sept. 10, 2019 Updated June 11, 2020

WASHINGTON — The expanding gap between rich and poor is not only widening the gulf in incomes and wealth in America. It is helping the rich lead longer lives, while cutting short the lives of those who are struggling, according to a study released this week by the Government Accountability Office.

Almost three-quarters of rich Americans who were in their 50s and 60s in 1992 were still alive in 2014. Just over half of poor Americans in their 50s and 60s in 1992 made it to 2014.

“It’s not only that rich people are living longer but some people’s life expectancy is actually shrinking compared to their parents, for some groups of people,” said Kathleen Romig, a senior policy analyst at the liberal Center on Budget and Policy Priorities.

Income inequality has roiled American society and politics for years, animating the rise of Barack Obama out of the collapse of the financial system in 2008, energizing right-wing populism and the emergence of nationalist leaders like Donald J. Trump, and pushing the Democratic Party leftward. Senator Bernie Sanders, a self-described democratic socialist who is seeking the Democratic presidential nomination, commissioned the report from the Government Accountability Office, Congress’s independent watchdog, and seized on its findings.

“Poverty is a life-threatening issue for millions of people in this country, and this report confirms it,” Mr. Sanders said in a statement .

The Census Bureau reported on Tuesday that the poverty rate declined last year to 11.8 percent, the lowest level since 2001. But median household income was $63,200 in 2018, essentially unchanged from a year earlier, and income gains slowed last year from the increases posted in 2015 and 2016.

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Ielts writing task 2 sample 400 - the gap between rich and poor is becoming wider, ielts writing task 2/ ielts essay:, the gap between the rich and the poor is becoming wider; the rich are becoming richer, and the poor are getting even poorer. what problems can the situation cause what can be done to reduce this gap.

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The ‘Rich’ and ‘Poor’: The Widening Income and Development Gap Between Rich and Poor Nations Worldwide

• First Online: 25 June 2019

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• Richard J. Estes 10  

Part of the book series: Social Indicators Research Series ((SINS,volume 76))

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Wealth inequalities both within and between nations has reached an extreme point and is continuing to increase (Collier P. The bottom billion: why the poorest countries are failing and what can be done about it. Oxford University Press, New York, 2007; Henneberg S, The wealth gaps. Farmington Hills: Greenhaven Publishing, 2017). Today, approximately 8% of the world’s population owns approximately 85% of the world’s wealth, much of it held just by the upper 1% of the global population, whereas the “bottom” 92% of the world’s population hold somewhat less than 15% of global wealth (Burton J, 25 Highest income earning countries. World Atlas; Economics , April 25. Retrieved March 23, 2018 from https://www.worldatlas.com/articles/the-highest-incomes-in-the-world.html , 2017a; Countries with the lowest income in the world. World Atlas: Economics , April 25. Retrieved March 23, 2018 from https://www.worldatlas.com/articles/countries-with-the-lowest-income-in-the-world.html , 2017b; Frank RH, Falling behind: how rising inequality harms the middle class. University of California Press, Berkeley 2007; Piketty T, Capital in the twenty-first century (A. Goldhammer, Trans.). Belknap Press, Cambridge, 2017). Further, contemporary trends in the global wealth patterns contribute to a high sense of subjective ill-being among large segments of the global population, even within economically advanced countries (Clark A, Senik C, Happiness and economic growth: lessons from developing countries. Oxford University Press, Oxford, 2017; Helliwell J, Layard R, Sachs J, World happiness report, 2017. Sustainable Development Solutions Network, New York, 2017). The present scenario can be improved upon however, but it will require a more equitable flow of net national wealth to a larger share of the world’s national and global populations (Estes RJ, Sirgy MJ, Chapter 20: Well-being from a global perspective. In R. J. Estes & M. J. Sirgy (Eds.), The pursuit of well-being: the untold global history. Springer, Cham, 2017b; Graham C Happiness around the world: the paradox of happy peasants and miserable millionaires. Oxford University Press, New York, 2012; Stiglitz JE, The price of inequality: how today’s divided society endangers our future. W.W. Norton Books, New York, 2013).

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The Gini index or Gini coefficient is a statistical measure of distribution developed by the Italian statistician Corrado Gini in 1912. It is often used as a gauge of economic inequality, measuring income distribution or, less commonly, wealth distribution among a population. The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality. Values over 1 are theoretically possible due to negative income or wealth levels generated by selected countries ( Investopedia 2018 ).

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Estes, R.J. (2019). The ‘Rich’ and ‘Poor’: The Widening Income and Development Gap Between Rich and Poor Nations Worldwide. In: Brulé, G., Suter, C. (eds) Wealth(s) and Subjective Well-Being. Social Indicators Research Series, vol 76. Springer, Cham. https://doi.org/10.1007/978-3-030-05535-6_21

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By Olympio Barbanti, Jr. Originally Published October 2003; Current Implications section added by Heidi Burgess in April 2017.

Current Implications

This article is really interesting to apply 14 years later.  Not only was it written in an earlier political and economic era, but it was written by a Brazilian scholar who viewed inequality from the point of view of developed versus less developed countries. More...

Introduction

In the age of globalization, the gap between high and low income countries is not only persisting, but in many cases it is widening, as the OECD (Organization for Economic Cooperation and Development)[1] has shown in its study of Luxembourg. While the existence of such a divide is unquestionable, its origins, structure, and consequences are not. Could one, for example, securely say that income gaps lead to conflict? Is it possible to relate intractability to this divide? Rather than answer these thorny questions, this article explores the debate with the aim of identifying its key arguments. But first, it is necessary to clarify some concepts.

Poverty, Inequality and Welfare

Poverty: Poverty has been approached in both absolute and relative terms. "Absolute poverty" is a measurable quantity referring to a lack of the basic resources needed to maintain a minimum of physical health, normally calculated in calories or nutritional levels. "Relative poverty" has a qualitative dimension. It refers to general standards of living in different societies, taking into account culturally sensitive interpretations of poverty, and variations between and within societies over time.

Inequality: For those concerned with social policies and economic growth, inequality is normally interpreted as lack of equality of condition, that is lack of achievement of any given welfare indicator (e.g. income, consumption) or any valuable attribute of a population. For example, the larger the difference in income between a country's rich and poor, the larger the inequality. Note that reduction of poverty levels within any given society may not imply a reduction of inequality, because all classes in society may benefit simultaneously from economic growth, keeping the same proportion among them. While it seems clear that inequality is undesirable, there is a great deal of debate over the desirability of total equality. One debate over equality questions is the meaning and value of concepts such as class, status, power, and authority. These cannot, it is argued, be completely equalized without suppressing other values such as personal freedom and individualism.

Welfare: It has a much broader meaning, referring to the general state of well-being that an "entity" enjoys. Here, "entity" can be taken as a person or as a state, thus one can speak in terms of "personal well-being" or "welfare of the state."

Economic Logic and the Development Discourses

Classical economists have been largely influenced by Kuznet's 1955 postulate that suggests that in the early stages of economic growth in developing countries, inequality will tend to worsen, while at later stages there will be a better distribution of income.[2] Therefore, inequality, as well as poverty, Kuznet argued, could be tackled by efficient economic policy -- in other words, by rational development .

Though Kuznets's hypothesis influenced the study of income distribution for nearly four decades, others had previously established a direct casual relationship between economic development and overall betterment in people's life. This connection gained international political meaning on January 20, 1949, the day President Truman took office. In his Inaugural Address, Truman[3] said:

We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. The old imperialism -- exploitation for foreign profit -- has no place in our plans. What we envisage is a program of development based on the concepts of democratic fair dealing.

As Sachs[4] notes, Truman's speech "created" underdevelopment, by attaching a positive meaning to America's political institutions, which were built on "scientific advances and industrial progress." Development, then, could be achieved through science and material progress. The president also pointed out how politics and economics should work together to achieve development through "fair dealing."

For two at least decades, this rationalist view of development informed aid assistance to Third World countries. Underlying these ideas was the Weberian concept of modern (rational, urban, disciplined) versus traditional (superstition, rural, undisciplined). Weber's "spirit of capitalism" defined a life-style that reconciled discipline, diligence, and moderation, a rational hard-working principle necessary to turn "peasants into laborers."[5] The physical distance from the natural environment, and the very nature of non-agricultural activities, would disperse superstition, an essential characteristic of traditional/rural societies. Thus, development thinking rewarded rational behavior, linked to urban entrepreneurship and capitalist development.

It was only at the beginning of the 1970s that this development model was challenged within the circles of classical economics. Robert S. McNamara, then president of the World Bank, questioned the usefulness of economic definitions of development, and opened an avenue for a more humanist way of thinking that emerged later in the decade when the International Labor Office sponsored the "Basic Needs Approach."

Since then, development theories have changed character: they have begun to consider human dimensions involved in economic development, and questioned the real meaning of "development" to the poor. Welfare economists, such as Amartya Sen, have forcefully introduced new concepts, such as human-centered development. The concept of " empowerment " has also become central in the analysis of developing countries, which many prefer to call Less Developed Countries (LDCs).

At the same time, classical economists[6] have proven, with observations from 108 countries, that there is no support for Kusnet's hypothesis that inequality falls as economic development advances.[7] Therefore, there is a growing perception that the main casual relationship between inequality and economic growth is in fact the opposite: inequality is likely to obstruct the rate and quality of economic growth. It is therefore possible that a country could continue its economic development regardless of the inequalities its economy produces. Growth with inequality is an explosive mixture, one in which the very rich and the very poor live side by side in large urban centers. This fuels many forms of social conflict.

Double-standard "free" trade

Since Truman's inaugural words, the capitalist system has logged an incredible number of achievements. The technological revolution has brought a new standard of wealth, health and comfort to the peoples of First World countries, as well as great accomplishments in LDCs. According to E.A. Brett, these achievements have been possible due to a new institutional framework that supports "competitive markets, political freedoms, universal education, encourages objective scientific research, allows social and political criticism, and provides safety nets to reduce risk and deprivation."[8]

But Brett also observes that these achievements come with conflict. "Reducing scarcity," says Brett, "has created a crisis of sustainability as our propensity to consume exceeds our capacity to conserve diversity and control wastes; removing national barriers has exposed poor and ill-equipped peoples to the threats as well as the benefits of free trade and competitive markets; globalizing communications has reduced cultural diversity and exposed everyone to the temptations of an often materialistic and trivial international media industry."[9] In addition, Brett analyses the demands of competition in the capitalist setting, transforming workers into workaholics, with implications for stress-related illnesses, family breakdown, and the loss of traditional values and community solidarity.

The internationalization of the economy has had a direct impact in one of LDCs most important sectors: the international trade in agricultural and livestock commodities. Lagging behind in terms of industrialization, it is in the commodity market that LDCs may be competitive due to innate comparative advantages such as weather, soil, specific products, and labor costs. It is by commercializing their natural products, either raw or (semi) processed, that LDCs may achieve a balance of trade surplus. However, it is also in the agricultural markets that rich countries' policies have been most contradictory.

For example, global cotton prices have fallen by 50 percent since the mid-1990s. According to an Oxfam report,[10] when adjusted for inflation, prices are now lower than at any time since the Great Depression of the 1930s. However, as the study points out, despite its rhetoric of economic liberalism, the United States' cotton subsidies give its cotton producers an unnatural place in world market. It is only because of these subsidies that U.S. cotton is globally competitive. "Every acre of cotton farmland," says Watkins, "attracts a subsidy of $230, or around five times the transfer for cereals. In 2001/02 farmers reaped a bumper harvest of subsidies amounting to $3.9 billion -- double the level in 1992."[11] This is larger than the entire USAID budget for Africa's 500 million people, and also larger than the entire GDP (Gross Domestic Product) of a country like Burkina Faso.

The problem is not liberalization of trade. As McKay et al. have discussed, trade liberalization "can have significant impacts on poverty which may be either positive or negative."[12] Liberalization may have positive impacts in the long run because, "it stimulates broadly based economic growth." Nevertheless, as the authors state, "it can still have significant adverse effects on particular groups...especially in the short term."[13] The problem is "double-standard" liberalism, one which may spread the gospel of democratic free trade, and at the same time put people's livelihoods at risk

This is also the case with the European Union's Common Agricultural Policy, which, among other roles, protects the income of its member nations' dairy farms "through a system of price support, production quotas, import restrictions, and export subsidies."[14] According to Fowler et al, "milk production is the most important agricultural activity in the majority of EU member states," and is particularly important in France, Germany, the Netherlands, Ireland, Italy, and the UK, representing around 14 percent of agricultural production, or $38 billion, and involving 600,000 farmers.[15]

Arguing the need to attend to its own internal market, the EU introduced a system of production quotas in 1984, which was set at 120 million tons of milk per year. This is 110 per cent of today's domestic consumption, which means that a large export surplus was built into the quota system. In addition, the dairy sector receives subsidies of around $16 billion -- 40 percent of dairy production. This is, says Fowler, "equivalent to more than $2 per day per cow. Half the world's people live on less than this amount."[16]

The damage is twofold. First, within the EU, subsidies are monopolized by the dairy processing and exporting industries, which have concentrated production, transportation, distribution and trade at the expense of the small farmer. So, "the number of EU dairy farmers has fallen by more than 50 percent over the past decade, while average herd size has increased by 55 percent."[17] The same concentration of production at the hands of large transnational companies effects LDCs. Low-priced dairy products from the EU are shipped to countries like Jamaica, Dominican Republic, Argentina, and India where they undermine local small-scale production.

The cases of U.S. cotton and EU dairy subsidies are just two examples of how economic globalization has benefited a few large companies and producers while damaging the small, mostly in developing countries. There are many other cases in the commodity sector as well as in the financial sector. However, the core discussion here is whether, and how, this state of affairs leads to social conflict.

Rich-poor relations and social conflicts

The development discourse and practice has been based on a rational approach that assumes that economic growth benefits all society, reducing both poverty and inequality. "Good" development, moreover, would be achieved by those LDCs that follow Western political institutional models, echoing Truman's view of "development based on the concepts of democratic fair dealing." However, it is clear that in at least two sectors important to rich countries, cotton and milk, the dealing has been far from fair.

This may have some implications for social conflicts in LDCs. Recent research carried out for the World Bank by Fajnzylber et al., for example, claims to have found substantial evidence indicating a sharp increase in violence during the last decade of ever-increasing globalization.[18] This violence was measured using recorded homicide rates in both the two poorest regions of the world (Latin America and sub-Saharan Africa), and where growth of inequality has been fastest (Eastern Europe, Russia, and Central Asia).

Additionally, econometric research on Brazil carried out for the World Bank has found increasing demand for public safety in both poor and richer neighborhoods.[19] These studies show that both poverty and inequality have risen in the last decade. By 1998, 1.2 billion people still lived on less than a dollar a day, and 2.8 billion on less than two. If so, the "quality" of development has been widely compromised. A development that takes place without "quality," that is, without fairness, is a development undermined by intense and diverse forms of social conflicts.

While figures on crime may illustrate the situation, there are dimensions to current relations between rich and poor countries that both reveal the depth of inequality between the two as well as possibilities of transforming or resolving this disparity and its resulting social conflicts.

First, the dual behavior of rich countries has undermined LDCs' faith in the possibilities of alternative dispute resolution (ADR) methods. This is partially because dispute settlement mechanisms existent at the global level (like those from the World Trade Organization -- WTO), have not been able to counter rich-countries' biased trade policies. Also, the Western framework of democratic institutions that has given support, and meaning, to economic liberalism and therefore to "fair dealing" has itself been called into question. There is therefore a vacuum of meaning in Western democratic institutions that support ADR.

Second, expanding inequality has reinforced the power of local elites in LDCs, who, in many cases, achieved prominence under a colonial power. The situation today could be called a "new colonialism" with two levels. The first level involves the power of the rich over the majority of the poor. The second has to do with the use of that power in relation to globalization: within the unstable political and economic setting of LDCs, inside information is vital for international businessmen. Those who hold economic, political and/or informational power in LDCs are in a position to channel investment and/or development where they want. The overall result is an even larger imbalance of power , which restrains fair negotiation and conflict transformation/resolution practices. To some extent, local-scale rich-poor conflicts mirror the conflicts between LDCs and the rich nations.

Third, the contradiction between rich nations' development aid intentions and their actual trade practices has a negative result among LDC populations. A country's commercial practice, like its culture, can be, rightly or wrongly, identified with its people's beliefs. American trade practices, for example, are the practices that Americans supposedly defend. It could be argued, therefore, that the attacks on the World Trade Center and the Pentagon were attacks on what the perpetrators' identified as symbols of the main source of LDCs' growing poverty and inequality: American trade policy and its military.

Development economics also have to do with human values. Globalization brings about a change in people's lifestyles and behaviors. Forms of alternative income earning have grown faster than formal and secure employment. Global companies have maintained control over planning, and sent to LDCs all stages of production that involve financial and human risk. Life in LDCs has become more unstable, generating and/or expanding many different types of conflict, from crime to intra-household violence, from environmental destruction to unfair competitive practices in human relations and commerce.

Finally, the logic of globalization tends to homogenize once diverse institutions and the cultural frameworks derived from them. This brings conflict in different forms, as local culture institutions and structures have to adapt or risk dying out. This includes ADR practices themselves: their introduction in LDCs may become a source of conflict if indigenous forms of negotiation, based on local values and cultures, are not taken into account.

This list is not complete. Inequality has more faces and more links to social conflict than this paper has the room to discuss. The issues raised here -- the connections between peoples' welfare and social conflict at both local and global levels -- deserve further analysis.

This article is really interesting to apply 14 years later.  Not only was it written in an earlier political and economic era, but it was written by a Brazilian scholar who viewed inequality from the point of view of developed versus less developed countries. Neither he, nor we, at the time, were focusing on conflicts between the rich and the poor as being something that affected people and politics within developed countries.  We particularly weren't thinking about such conflicts as concerning US politics. But it did then, and it does even more so now, as inequality has been increasing in the U.S. for at least that long.  

Certainly many of Barbanti's observations remain true in this different context and time. Development (translated into increased prosperity, perhaps, in the US) does not reduce inequality; it may actually increase it. Class, status, power, and authority cannot be equalized, without suppressing other values such as personal freedom and individualism.  

As he perceptively argued, trade is not an equalizer, but rather a driver of inequality.  But neither he, nor we, in 2003, considered the argument that trade would be hurting the US economy or its citizens.  His argument was that trade was structured to benefit rich countries at the expense of the poor. In some sense, that is still true.  But many in the U.S. feel that trade is hurting them as well, which is why President Trump promised in his campaign to renegotiate or pull out of NAFTA as well as several other international trade agreements. (It should be noted that his tone has softened considerably since he has taken office.)

So I urge you to read this article with an eye to what applies now, and what doesn't.  And regardless of your answers, what clearly does apply is that conflicts between rich people and poor people, both within and between countries, is very complex and intractable.  

--Heidi Burgess   May 10, 2017.

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[1] OECD, Income Distribution in OECD Countries: Evidence from the Luxembourg Income Study (Paris: OECD, 1995).

[2] S. Kuznets, "Economic Growth and Income Inequality," American Economic Review 45, no. 1(1955): 1-28.

[3] Harry S. Truman, "Inaugural Address, January 20, 1949," in Documents on American Foreign Relations (Connecticut: Princeton University Press, 1967).

[4] Wolfgang Sachs, ed., The Development Dictionary -- A Guide to Knowledge as Power (London: Zed Books, 1995).

[5] Weber M., The Protestant Ethic and the Spirit of Capitalism , (London: Unwin University Press, 1971).

[6] K. Deininger and L. Squire, "A New Data Set Measuring Income Inequality," World Bank Economic Review 10 (1996): 565-591.

[7] See international inequality database at http://www.worldbank.org/research/growth/absineq.htm .

[8] E. A. Brett, (2000) "Development Theory, Universal Values and Competing Paradigms: Capitalist Trajectories and Social Conflict," LSE Development Studies Institute -- Working Paper Series No. 00-02 , (London: London School of Economics, 2000), 20.

[10] K. Watkins, "Cultivating Poverty -- The Impact of U.S. Cotton Subsidies on Africa," Oxfam Briefing Paper 30 (Oxford: Oxfam, 2002).

[11] ibid, 2.

[12] A. McKay and others, "A Review of Empirical Evidence on Trade, Trade Policy and Poverty - A Report to the Department for International Development (DFID), prepared as background document for the Second Development White Paper," mimeo (London, DFID, 2000), 45.

[13] ibid, 45.

[14] P. Fowler and others, "Milking the CAP -- How Europe's dairy regime is devastating livelihoods in the developing world," Oxfam Briefing Paper 34 (Oxford: Oxfam, 2002), 4.

[15] ibid, 4.

[16] ibid, 7.

[17] ibid, 2.

[18] P. Fajnzylber, D. Lederman and N. Loayza, "Determinants of Crime Rates in Latin America and the World," World Bank Latin America and the Caribbean Viewpoints Series Paper (Washington, D.C.: World Bank, 1998).

[19] M. Pradhan and M. Ravallion, "Demand for Public Safety," Free University and the World Bank , mimeo (Washington, D.C., World Bank, 1998).

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Home — Essay Samples — Business — Tax — Tax Equity In The Rich And Poor

Tax Equity in The Rich and Poor

• Categories: Tax Taxation

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Words: 1662 |

Published: Dec 16, 2021

Words: 1662 | Pages: 4 | 9 min read

Table of contents

Introduction, tax equity in the rich and poor, counter-arguments.

• Goodman, P. (2011, September 30). Should We Tax the Rich More? (Pros and Cons). Retrieved from https://soapboxie.com/government/Should-we-tax-the-rich-more-pros-and-cons
• Herings, P. J., & Predtetchinski, A. (2011). Procedurally Fair Income Taxation Schemes. SSRN Electronic Journal. doi:10.2139/ssrn.1890464
• Vallentyne, P. (2018). Libertarianism and Taxation. Taxation, 98-110. doi:10.1093/oso/9780199609222.003.0006
• Vitelli, A. (2019, April 16). Should we raise taxes on the rich? Retrieved from https://www.theperspective.com/debates/businessandtechnology/raise-taxes-rich/
• Sandel, M. (2010). Justice : What's the right thing to do?(1st pbk. ed.). New York: Farrar, Straus and Giroux. 

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