Abstract
Inequality between nations could be viewed as a major global faultline and although there is evidence that it is slowly being reduced, the gap between countries at the top and bottom remains enormous, with GDP per head of the top 25 high-income countries of the Global North being 52 times that of the bottom 25 countries. Inequality within countries is increasing, with evidence of a growing concentration of income and wealth in the hands of a small number of very rich individuals and senior corporate executives on astronomical salaries and bonuses. The COVID-19 pandemic appears to be reinforcing inequality. These developments are widely considered to be a threat to national and international security. Studies that have sought to find a relationship between inequality and threats to security in the form of terrorism and violent and property crime have found it to be positive. There are, therefore, sound practical reasons why inequality should be reduced, if not moral ones to underpin genuine democracy and human rights.
Highlights
Inequality between nations could be viewed as a major global faultline and there is evidence that it is slowly being reduced, the gap between countries at the top and bottom remains enormous, with GDP per head of the top 25 high-income countries of the Global North being 52 times that of the bottom 25 countries
Whether the question is the cause of inequality or what inequality causes, the distribution of income and wealth between and within countries is becoming a major faultline in the economic structure of the world economy
The inequality of nations around the globe remains a key feature of the world economy, dominated as it is by the rich and powerful countries of the Global North and, in particular, by the global financial corporates who have been able to exert a strong degree of control over largely compliant governments
Summary
In 1960, the 25 countries with the highest GDP per head had, on average, 32 times that of the 25 with the lowest. The received wisdom, based on the work of Kuznets (1955), was that as capitalism developed, the share of income going to the owners of capital would increase, and as the political and economic power of the workers increased, their share would start to rise so that, over time, the curve plotting the relationship between inequality and time would form an inverted U shape. For example, it was recently reported that the top 1% of the population owns 45% of the world’s wealth (Credit Suisse, 2019) and that the richest five people (all men) own as much wealth as the bottom 50% of the world population (Buchheit, 2017) This increasing inequality is a feature of late capitalism but can be found in the emerging economies, where Piketty shows that since 1980 the share of the top percentile of labour income had steadily risen two to threefold by 2010. The Great Depression of the 1930s is a striking example of how this kind of inequality had an effect on security, through the growth of fascist movements in Europe culminating in a civil war in Spain, which became a prelude to Nazi Germany’s invasions of Czechoslovakia, Poland and France, and the resulting six-year second world war
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