Challenges in the Era of Globalization - iaabd

Challenges in the Era of Globalization
Edited by Emmanuel Obuah
What do we understand about inequality and why does it take place? Inequality raises complex economic,
social, political and ideological questions that can best be ‘disentangled’ by first establishing some ground
rules on what we mean by equality. First, in legalistic terms, equality refers to the notion that members of
society should be equal in the eyes of the law. Second, equality of opportunity conjures up an image of
meritocracy, that is, that every member of society has an equal chance of fulfilling their potential,
developing their talents and applying themselves to the task in hand. Finally, equality of outcome
represents a benchmark against which we can judge unequal distribution of income, deep-seated poverty
etc. By identifying unequal distribution, we are at the same time comparing this situation with a
hypothetical one where everyone receives the same income. For the political economy approach (below),
these concepts are contradictory and meaningless when seen through the prism of the capitalist system
that is ‘structured’ along class relations of exploitation. The BWA Census (2010), Global Gender Gap
Reports (2009; 2010) and the survey by Statistics South Africa (2009) show widespread inequalities in
South Africa. However, how can we explore this phenomenon?
From an orthodox approach, workers and capitalists receive income that is proportional to their
contribution to production. In other words, the price of labour is ‘earned’ income (wages, salaries), while
the price of capital is ‘unearned’ income (interest, dividends and profit). Using per capita income as an
indicator of inequality, orthodox economists contend that any differences in earnings can only be
explicable from differences in people’s contribution to production. Some people are argued to be
naturally more talented, more skilled and intelligent than others. When choosing between work and
leisure, some people are prepared to work longer or more intensively than others. Some people will take
on more difficult, dangerous or responsible jobs; whilst others will sacrifice earnings and leisure in order
to acquire the necessary skills for jobs that pay them handsomely in the future. Inequalities in earnings are
therefore defined as ‘fair’ and desirable since scarce talent is used in the most efficient ways, thus
benefiting society from this standpoint. Emphasis is placed on equality of opportunity rather than equality
of outcome. In her 1975 address, Margaret Thatcher encapsulated this ‘business-as-usual, do-nothing’
viewpoint: “The pursuit of equality is a mirage. What is more desirable and practical than the pursuit of
equality is the pursuit of the equality of opportunity, and opportunity means nothing unless it includes the
right to be unequal”. Inequalities in income and wealth are justified as merely reflecting inequalities in
people themselves. To the extent that women and men are arguably different in terms of their intelligence,
enterprise, etc, then logically each person must do that job for which they are most suited or most able.
Differentials in income are seen as essential in encouraging people to do the more ‘valuable’ jobs that are
determined by society, by consumer wants.
To contrast this view with the political economy approach; it is posited that private ownership creates a
class that, by virtue of its ownership of the means of production, can lay claim to the surplus gained in
production. The key to understanding unequal distribution of wealth and income from this perspective is
through the process of accumulation rather than merely biological disposition. Those people who have
higher incomes for example, be it via inheritance, (social) networking, corruption or (forcible)
expropriation, will be able to command a greater proportion of the surplus, and have greater opportunities
to accumulate. In any case, without the abolition of inheritance, equality of opportunity merely implies
inequality of outcome. There is also a greater chance that these people will hold large holdings of capital,
enabling them to cushion themselves against risk and uncertainty and have more control over privately
owned resources and financial institutions, contributing to the ever-widening inequalities under the
capitalist market system. Therefore, inequality encompasses power relations. As long as there is private
property, equality of opportunity will thus not be guaranteed, let alone lead to equality of outcome and
condition. People are ‘moulded’ by society, while at the same time they also strive to re-shape and reconstitute
that society. Since gender is a social and cultural construct within different historical contexts,
women’s subordination involves economic and racial oppression as well as patriarchal relations (Cameron
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