29.01.2015 Views

1FW2e8F

1FW2e8F

1FW2e8F

SHOW MORE
SHOW LESS

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

SECTION 1 2 3<br />

EXTREME INEQUALITY<br />

BUSTING THE<br />

INEQUALITY MYTHS<br />

Those who say that extreme inequality is not a problem,<br />

or that it is the natural order of things, often base their<br />

arguments on a number of myths.<br />

MYTH 1<br />

Extreme inequality is as old as humanity, has always been with us,<br />

and always will be.<br />

The significant variations in levels of inequality over time and between different<br />

countries demonstrates that levels of inequality are dependent on a number<br />

of external factors, such as government policies, rather than simply being<br />

the natural order of things.<br />

The 20 th century provides numerous examples of how inequality can be<br />

significantly reduced and how it can radically increase within the span of<br />

just one generation. In 1925, income inequality in Sweden was comparable<br />

with contemporary Turkey. But, thanks to the creation of the Swedish welfare<br />

state, which, among other things, included provisions for universal free<br />

access to healthcare and universal public pensions, by 1958 inequality in<br />

Sweden had reduced by almost half and continued to decrease for the next<br />

20 years. 303 The experience of Russia mirrors that of Sweden. At the end of the<br />

1980s, levels of inequality in Russia were comparable with its Scandinavian<br />

neighbours. However, since the beginning of the transition to a market<br />

economy in 1991, inequality has almost doubled. 304<br />

In more recent years, countries in Latin America have significantly reduced<br />

inequality. Between 2002 and 2011, income inequality dropped in 14 of the 17<br />

countries where there is comparable data. 305 During this period, approximately<br />

50 million people moved into the emerging middle class, meaning that, for<br />

the first time ever, more people in the region belong to the middle class<br />

than are living in poverty. 306 This is the result of years of pressure from<br />

people’s movements that have campaigned for more progressive social<br />

and economic policies. The governments that the people have elected<br />

have chosen progressive policies, including increased spending on public<br />

health and education, a widening of pension entitlements, social protection,<br />

progressive taxation and increases in employment opportunities and the<br />

minimum wage. Latin America’s experience shows that policy interventions<br />

can have a significant impact on income inequality.<br />

There is also a strong body of evidence which shows that extreme inequality<br />

has been rising in every other region of the world over the past three decades,<br />

which is why the negative consequences must be taken seriously, now more<br />

than ever. 307<br />

64

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!