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Inequality: From Information to Understanding and Action

by Frank Stilwell on July 25, 2019
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Check out Frank Stilwell speaking on the political economy of inequality during Social Sciences Week 2019 on 10 September, tickets available, HERE.

Why write a new book on economic inequality? During the six years since the French political economist Thomas Piketty published Capital in the 21st Century, many others have appeared. Piketty and an international group of colleagues are now putting out regular reports on trends in income and wealth for an ever-widening array of nations. With so much information now available, we have little excuse for being unaware of the growing economic inequalities that exist in almost every nation on our planet.

Yet, a deep understanding of inequality is much less evident.  Many people seem to regard large economic inequalities as inexorable, perhaps determined by the state of technology, by innate differences in rich and poor people’s abilities – or maybe just the luck of the draw. This dearth of deep understanding is politically paralysing.

The recent Australian federal election is indicative. The ALP campaigned on a platform of mildly redistributive reforms, based mainly on reducing tax concessions that disproportionately favour people on high incomes. The conservatives castigated this as ‘class warfare’. A (slim) electoral majority stuck with the ‘devil they knew’ rather than embracing modest reformism that would, in many cases, have actually benefitted them.

Is redress of inequality destined to remain indefinitely in the ‘too hard basket’? If so, we can expect adverse social and economic consequences. As various international studies have shown, there are strong correlations between the extent of inequality and a wide range of social disorders, including mental and physical ill-health, crime, and low educational attainment. Extreme inequalities also make effective action on climate change harder to develop. Democracy itself seems more fragile, as economic inequalities distort and corrupt our political institutions.

Concerns about extreme inequalities have been expressed by prominent public figures, including the head of the Catholic Church. Even senior executives in international agencies like the IMF and World Bank now ‘talk the talk’, although their agencies rarely ’walk the walk’ on the policy front. Yet, the voluminous information that now exists about growing inequalities is evidently insufficient to turn the tide. Conservative politicians, wedded to discredited economic orthodoxies about why we supposedly ‘need’ big inequalities, remain oblivious to — and complicit in — the social stresses it creates.

Economic inequality has been a theme running through my research and writing for more than four decades. So I rapidly agreed when the editors at Polity Press asked me to author a new book on the political economy of inequality. This would be a timely opportunity, I thought, to set out our current state of knowledge for the benefit of students, activists, academics, and policy makers.

Actually writing the book was tougher than I expected. I realised that I had to synthesize and summarise an already huge literature on inequality. I also needed to consider how inequality relates to issues of ability and disability, geography, class, gender, and race. Another complication is that existing analyses of inequality use different analytical frameworks and rest on varying value judgments. Careful sorting of these differences made for difficult decisions about how to pitch the book concurrently to the different audiences I wanted to reach.

There’s also the recurrent tension between ‘balance’ and advocacy. I write as a social scientist, trying to understand and to change the world (thereby following in the footsteps of a renowned 19th century political economist who famously said something similar: visitors to his grave in north London can read his words there!). In my new book’s preface, I describe my own approach as ‘committed scholarship’. For me this requires cool consideration of the evidence and its diverse interpretations, while looking for paths to progress. Along the way, the technical aspects of inequality measurement and the key analytical concepts have to be considered – distinguishing, for example, between income and wealth; the functional and household distributions of income; and public and private wealth. And it all has to be done without losing the interest of general readers simply seeking to know ‘what is going on out there?’.

Where’s that “out there” anyway? The world comes across as highly variegated when we see it through a “political economy of inequality” lens. In the United States, the growth of inequality has been particularly striking. We can get a sense of some more moderate possibilities by comparing the United States to nations in Europe. Looking at the BRICS — Brazil, Russia, India, China, and South Africa — further expands our understanding of the world’s huge and increasing inequalities. A global approach is needed if we are to take stock of how international economic inequalities are interacting with inequalities within individual nations. Australia is in the mix, seen in comparative context.

The evidence on what is happening ‘out there’ also needs to be related to theoretical propositions about the causal factors, always a big challenge in the social sciences. The book tackles this challenge with separate sections on patterns, processes, problems, policies, and prospects. It explains the political economic forces shaping inequality; reviews the social, economic, environmental and political problems that result; and then considers the potentially egalitarian public policies; wrapping up with reflections on the prospects for more egalitarian outcomes.

It is in the final two chapters that blending ‘pessimism of the intellect’ with ‘optimism of the will’ — to use Gramsci’s classic formulation — becomes explicit. The former requires attention to the obstacles on the road ahead – the ignorance, ideologies, interests and institutions that entrench the status quo. The latter requires focus on the ingredients for progress – critique, vision, strategy, and organization. We need a critical understanding of what’s happening, a vision of the better world to which we aspire, a strategy for getting from here to there, and organizational vehicles capable of going the distance. It is by assessing these capacities and prospects that the book addresses what needs to be done.

I have written this book in the belief that we can achieve a more egalitarian world. Books seldom directly change the world, but if the world is already changing – and it always is – they can give a nudge or add momentum for a change of direction. I certainly hope so. The need for effective integration of information, understanding and action has seldom been more evident.

Some parts of this article are adapted from an earlier article on inequality.com. The Political Economy of Inequality is available in bookstores worldwide and as an e-book.

Frank Stilwell
Emeritus Professor of Political Economy at the University of Sydney, co-ordinating editor of the Journal of Australian Political Economy (JAPE), and Fellow of the Academy of Social Sciences in Australia.

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