Social inequality is a difference in privileges, resources, and compensation considered by a social group as unjust and prejudicial to the potential of the individuals of the community. It is an objectively measurable and subjectively perceived difference.
The elements that compose it are the existing objective differences, i.e. the minor or major possession of socially relevant resources. The differences are a consequence of the action of social selection mechanisms rather than of merit and are interpreted by the disadvantaged subjects and groups (or by those who represent them) as unjust; considering oneself a victim of unjust discrimination is a subjective component.
It is therefore important to distinguish between difference and social inequality. If the first is the opposite of the concept of assimilation, the second corresponds to the exact opposite of social equality.
Sociology addresses the issue of social inequality by elaborating two distinct interpretations, both valid and unavoidable:
- Evaluative interpretation consists of the study of order, division of labor, and social stratification. For example. the position of CEO of a large company is very high; the individual will be placed in the upper-middle range of the social hierarchy.
- Political interpretation consists of the study of interests and power and explains inequality with the difference in power; therefore with a fundamental injustice.
Social inequality effects
The effects of inequality go far beyond purchasing power. Inequalities affect people’s life expectancy and access to basic services such as health care, education, water, and sanitation. They can limit the human rights of individuals through, for example, discrimination, abuse, and lack of access to justice. A high level of inequality does not incentivize personal training, it stifles economic and social mobility and human development and, consequently, slows down economic growth. Furthermore, it feeds uncertainty, vulnerability, and insecurity, undermines trust in institutions and the government, increases dissension and social tensions, and causes violence and conflict.
There is growing evidence that a high level of income and wealth inequality is causing an increase in nativism and extreme forms of nationalism. Inequality also impairs the ability of individuals and communities to adapt to and mitigate climate change. The latest populist reactions to the carbon tax demonstrate the growing difficulty in taking courageous climate action without first addressing the underlying causes of inequality.
Technology can be effective in balancing this situation through, for example, the enhancement of connectivity, financial inclusion, access to the market, and public services. However, those who are still unable to access it could experience a consequent and further marginalization, since within some groups progress is slowing down and even retreating.
Social inequality and pandemic
Covid-19 has even widened the gap between rich and poor. According to statistics, by 2030, over half a billion more people will be living in poverty. While billionaire fortunes have returned to astronomical pre-pandemic levels in just 9 months. All this data is lined up by Oxfam’s latest report, “The Virus of Inequality“. Which also reveals how the pandemic has affected the poor, women, and ethnic minorities.
Social inequality and economic growth
There is a growing consensus that focusing on economic growth without taking into account the consequences of its distribution has led to high levels of income and wealth inequality in many parts of the world. The data presented in the 2019 Multidimensional Poverty Index showed a low relationship between poverty and levels of economic inequality, revealing that two-thirds of the poor of the world live in middle-income countries.
According to Oxfam, if current levels of disparity continue, the global economy would have to be 175 times higher for everyone to earn more than $ 5 a day. There is a clear urgency to achieve inclusive, equitable, and sustainable growth, ensuring a balance between the economic, social, and environmental dimensions of sustainable development.
Since the late 1970s, for example, income inequality in the advanced economies of the English-speaking world has returned to the high levels of a century ago, while in continental Europe it has not grown so significantly.
Social inequality: neither inevitable nor irreversible
In 2015, world leaders approved the 2030 Agenda for Sustainable Development, a plan of action for people, the planet, and prosperity, which includes 17 goals to build more peaceful, just, and sustainable societies.
- Goal 1. End poverty in all its forms everywhere
- Goal 2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
- Goal 3. Ensure healthy lives and promote well-being for all at all ages
- Goal 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
- Goal 5. Achieve gender equality and empower all women and girls
- Goal 6. Ensure availability and sustainable management of water and sanitation for all
- Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all
- Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
- Goal 10. Reduce inequality within and among countries
- Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable
- Goal 12. Ensure sustainable consumption and production patterns
- Goal 13. Take urgent action to combat climate change and its impacts*
- Goal 14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
- Goal 15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
- Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- Goal 17. Strengthen the means of implementation and revitalize the global partnership for sustainable development
Recognizing that inequalities put long-term socio-economic development at risk and generate violence, disease, and environmental degradation, Goal 10 aims to reduce inequalities and inequalities in opportunities, income, and power.
- 10.1 By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average
- 10.2 By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status
- 10.3 Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard
- 10.4 Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality
- 10.5 Improve the regulation and monitoring of global financial markets and institutions and strengthen the implementation of such regulations
- 10.6 Ensure enhanced representation and voice for developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions
- 10.7 Facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies
- 10.A Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements
- 10.B Encourage official development assistance and financial flows, including foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries, in accordance with their national plans and programmes
- 10.C By 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent
The goals set both nationally and internationally include eliminating discriminatory laws and policies, improving the regulation of global financial markets, facilitating regular, safe, and disciplined migration, and strengthening inclusion in the decision-making process. Between 2010 and 2016, the income of the poorest 40% of the population grew faster than that of the entire population of 60 out of the 94 countries reported. This shows that inequality is neither inevitable nor irreversible.
Inequality takes many forms and varies significantly between countries. Although Goal 10 and its targets provide guidelines, the fight against inequality must refer to the context of each country, economic imperatives, and political realities. It is not possible to find a single strategy that fits all cases. To counter the scourge of inequality in all its forms and manifestations, it will be of fundamental importance to generate greater awareness and create broader political support, identify and redefine public spending priorities to reduce inequality in access and opportunities, redefine taxes and fiscal approach to reduce intra and intergenerational income and wealth inequalities, and ultimately manage rapid technological change.
A solution: wealth redistribution
Perhaps, we can find an answer in a recent analysis made by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam, and Patriotic Millionaires and let it guide us toward a path to reducing social inequality on a global level. Figures show that an annual tax on the richest people in the world would be enough to take 2.3 billion people away from poverty, produce enough vaccines for the whole world, and deliver universal health care and social protection for all the people of low and lower-middle-income countries that represent 3.6 billion individuals.
An annual wealth tax applied to the richest people in the world would raise USD $ 2.52 trillion a year (with a steps structure of 2 % tax on wealth over $ 5 million; 3 % on wealth over $ 50 million; 5 % on wealth over $1 billion.)
A higher progressive wealth tax would raise even more, USD $ 3.62 trillion a year (with 2 % on wealth starting at $ 5 million; 5 % on wealth over $ 50 million; and 10 % on wealth over $ 1 billion.)
The analysis also brings out a shocking reality: global wealth among the world’s richest people rose during the COVID-19 pandemic deepening inequality.
Today, globally:
- 3.6 million people have over $5 million in wealth, with a combined wealth of $75.3 trillion.
- 183,300 households own over $50 million, for a combined wealth of $36.4 trillion.
- 2,660 billionaires have a total combined wealth of $13.76 trillion. (Forbes, November 30, 2021).
Conclusion
We want to conclude by quoting parts of the Speech Delivered at the Dedication of the John Brown Memorial Park in Osawatomie, Kansas, given by Theodore Roosevelt on August 31, 1910, in which he carries out an attack on the excessive concentration of wealth and it is as current as ever.
“In every wise struggle for human betterment one of the main objects, and often the only object, has been to achieve in large measure equality of opportunity. In the struggle for this great end, nations rise from barbarism to civilization, and through it people press forward from one stage of enlightenment to the next. One of the chief factors in progress is the destruction of special privilege. The essence of any struggle for healthy liberty has always been, and must always be, to take from some one man or class of men the right to enjoy power, or wealth, or position, or immunity, which has not been earned by service to his or their fellows.”
“At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress. In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will. At every stage, and under all circumstances, the essence of the struggle is to equalize opportunity, destroy privilege, and give to the life and citizenship of every individual the highest possible value both to himself and to the commonwealth. That is nothing new.”
“I stand for the square deal. But when I say that I am for the square deal, I mean not merely that I stand for fair play under the present rules of the game, but that I stand for having those rules changed so as to work for a more substantial equality of opportunity and of reward for equally good service. One word of warning, which, I think, is hardly necessary in Kansas. When I say I want a square deal for the poor man, I do not mean that I want a square deal for the man who remains poor because he has not got the energy to work for himself. If a man who has had a chance will not make good, then he has got to quit.”
“The Constitution guarantees protection to property, and we must make that promise good. But it does not give the right of suffrage to any corporation…. There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done…Corporate expenditures for political purposes, and especially such expenditures by public-service corporations, have supplied one of the principal sources of corruption in our political affairs.”
“The effort at prohibiting all combination has substantially failed. [This is a reference to the effort at ‘trust-busting’ that he inaugurated as president, but which he felt had not been pursued vigorously by his successor, William Howard Taft.] The way out lies, not in attempting to prevent such combinations, but in completely controlling them in the interest of the public welfare.
“The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need to is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise. We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows…
“We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.
“No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar’s worth of service rendered — not gambling in stocks, but service rendered.”
“The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective-a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.”
“I recognize the right and duty of this generation to develop and use the natural resources of our land; but I do not recognize the right to waste them, or to rob, by wasteful use, the generations that come after us.”
“The right to regulate the use of wealth in the public interest is universally admitted. Let us admit also the right to regulate the terms and conditions of labor, which is the chief element of wealth, directly in the interest of the common good. The fundamental thing to do for every man is to give him a chance to reach a place in which he will make the greatest possible contribution to the public welfare. Understand what I say there. Give him a chance, not push him up if he will not be pushed. Help any man who stumbles; if he lies down, it is a poor job to try to carry him; but if he is a worthy man, try your best to see that he gets a chance to show the worth that is in him. No man can be a good citizen unless he has a wage more than sufficient to cover the bare cost of living, and hours of labor short enough so after his day’s work is done he will have time and energy to bear his share in the management of the community, to help in carrying the general load. We keep countless men from being good citizens by the conditions of life by which we surround them. We need comprehensive workman’s compensation acts, both State and national laws to regulate child labor and work for women, and, especially, we need in our common schools not merely education in book-learning, but also practical training for daily life and work.”
“We need to set our faces like flint against mob-violence just as against corporate greed; against violence and injustice and lawlessness by wage-workers just as much as against lawless cunning and greed and selfish arrogance of employers. If I could ask but one thing of my fellow countrymen, my request would be that, whenever they go in for reform, they remember the two sides, and that they always exact justice from one side as much as from the other. I have small use for the public servant who can always see and denounce the corruption of the capitalist, but who cannot persuade himself, especially before election, to say a word about lawless mob-violence. And I have equally small use for the man, be he a judge on the bench or editor of a great paper, or wealthy and influential private citizen, who can see clearly enough and denounce the lawlessness of mob-violence, but whose eyes are closed so that he is blind when the question is one of corruption of business on a gigantic scale.”
“Those who oppose reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism.”