Inequality and the Post-2015 Agenda
As of today, two thirds of the world population lives in countries where income inequality increased between the mid 1990s and the mid-to-late 2000s. High inequality rates have detrimental effects on both economic growth and social wellbeing, and can cause conflicts. However, inequality has been neglected in the MDG framework, with only the symptoms of inequality being dealt with. Instead, the structural causes of inequality should be addressed in a systematic way if the goal is a more equal global economy.
Inequality comes in different forms. Economic inequality includes income inequality, the uneven distribution of the tax burden between capital and labour, and mechanisms in the financial system, such as tax havens. Political inequality refers to the lack of democratic voice and political participation within nation states and limited political representation in international organizations. Social inequality, finally, implies unequal access to employment, education and social security.
The effects of inequality have contributed to social exclusion all over the world, particularly affecting the most vulnerable members of society: the poor. Inequality hinders poor people from participating in economic processes while allowing the rich to benefit most from the accumulation of wealth. Furthermore, inequality corrodes the quality of institutions, may lead to conflicts and hampers human well-being.
Globalization and the financial system can be identified as the major causes of global inequality. International trade agreements, for example, have enabled the free flow of capital across the world, but also lead to capital flight from developing countries and a race to the bottom on the global labour market. The fact that political power is concentrated in the hands of a tiny elite cannot be ignored in this context. To tackle inequality globally, the interests of the stakeholders who benefit from the asymmetry of market economies must be unveiled.
Drawing on The Broker’s debate on inequality, this panel will present different proposals as to how inequality might be included in the post 2015 development goals. It will discuss the meaning of economic welfare and well-being and definitions of growth beyond GDP; reflect on the relation between the scarcity of goods on the one hand and the global labour market that enables mass production on the other; and offer concrete ideas and strategies on how to restructure the financial system parallel to the creation of a more just tax transfer system.