How can we create a better life for everyone?

Why is equality still so elusive, while inequality is seen as normal and almost inevitable? We interview the sharpest economic minds in the world, as they share ideas about what real economic equality might look like - and how to achieve it.

Inequality takes many forms, one of which is the gap between the richest and the poorest in society. As Nobel Laureate Sir Angus S. Deaton notes, it’s not possible to make everyone a millionaire, but can something be done about the increasing disparity between the 'have lots' and the 'have nots'?

Why do some countries get stuck in poverty?

Nobel Laureate Sir Arthur Lewis grew up in St. Lucia during World War One and had first-hand experience of the ‘have nots’ as the country was very poor and still dealing with the aftermath of slavery.

Sir Arthur described an economy with a modern capitalist sector and an under-developed sector – which led to inequality and lower wages. His work on economic development, and why some countries get stuck in cycles of poverty, challenged the thinking of the time.

"High levels of unemployment allow an urban entrepreneurial class to exploit plentiful labor. They enjoy the profits of their development, while people at the bottom of society don’t progress at all and unemployment becomes indigenous to the system as a whole."

Real GDP growth 2016

Why is there such a large gap between the richest and the poorest?

Nobel Laureate Robert M. Solow explored why some economies grow much faster than others, and examined why some parts of the world have experienced rapid industrialization while others have seen economic stagnation. Solow argues that there is no economic need for such a sharp contrast between the world’s rich and poor, and firmly believes that economics can be used to improve equality.

"The science of economics should teach us not only how to increase the wealth of all of us, but to share the wealth more equally than we do."

Is financial aid the answer?

Foreign aid is an important source of income for many poorer countries, but is it the best way of raising living standards for people living in them? Nobel Laureate Sir Angus S. Deaton, who’s spent a lifetime studying the concerns of the ‘one percent’, says:

"It’s very difficult to overcome the simplistic view that if you’re poor and I’m rich and I give you money, that’ll make you better off."

He adds that foreign aid can sometimes inadvertently support corrupt or inefficient regimes, and never reach the people it’s meant to help. “The great tragedy is that there are many people around the world who are still extremely poor. So the question is, what’s to be done about that? And who should do it?”

Is globalization helping or hindering equality?

The world’s becoming more interconnected, and globalization has increased in recent years.

While there remains a gap between the richest and the poorest, globalization has been good for some developing countries. One of the positives has been the huge numbers of people in countries like China who’re no longer living in poverty.

 

Nobel Laureate Sir James A. Mirrlees, who lives in Hong Kong, suspects that China will continue on an upward curve:

"I feel pretty sure that urban wages in the big Chinese cities will be comparable with wages in the big (western) cities within the next 50 years."

Can we rewrite the rules of our economy to achieve equality?

Nobel Laureate Joseph E. Stiglitz says there’s no easy overnight way to do this. But he also says that if we wrote the rules to make the economy more unequal, we should be able to rewrite them to make them more equal.

"Give workers more bargaining rights, curb the power of corporations, create better corporate governance, keep checks and balances on the financial sector. There is an agenda that can promote strong growth in the US economy."

Should we redistribute wealth in society?

Paul R. Krugman is probably one of the most recognizable (and vocal) laureates we’ve spoken to, and his opinion pieces in the New York Times frequently take fire at the ‘one percent’ and climate change deniers.

He rejects “conventional wisdom”, arguing that it’s often the wisdom of powerful elites. Talking about inequality, he says that there are things we can – and should – be doing to redress the balance.

“Redistribution, taxes and transfers, guarantee of basic income in some form for the less fortunate, paid for by taxes on the most fortunate. We can do that.”

It’s not just about the rich and the poor, what about gender equality?

Women could add $12 trillion to the global economy in the next decade*, and their wealth is growing faster than men’s.

But gender equality still hasn’t come far enough, despite obvious steps forward in recent decades. In fact, the World Economic Forum predicts the gender gap won’t close entirely until 2086.

The theme of the last International Women’s Day was #BeBoldForChange. We’re shining a spotlight on some of the exceptional ways in which women are challenging, reinventing and innovating across the world.

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Can you make a difference personally?

Equality can seem like too big an issue to do anything about on a personal level. But our Life’s Questions series looks at how with the right investments people can actually make a difference to the environment and society, because we think it's possible to do good and still do well.

"Sustainable investing is about making a change for a better future. And it's also about the returns it can generate"

Paul Simon
Impact investor and philanthropist

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