Inequality Matters: Why globalization doesn’t lift all boats
Nancy Birdsall
Boston Review
March/April 2007 A distinction is first made between
constructive and
destructive inequalities of income. Constructive inequality is identified with income inequality combined with equal
opportunities leading to the most fruitful engagement of individual initiative yielding high social mobility and economic growth. This identification, however, seems flawed. It does not seem to realize that equal opportunities presuppose limited income inequality and is incompatible with economic growth as it is currently prosecuted through uncounted external (public or collective) costs, such as global warming and species extinction (an economy dedicated to equal opportunities for everyone, however, would operate towards a decent life for everyone; it would be concerned with what counts rather than the merely countable, to borrow eloquent distinctions by Daly). As for destructive inequality, this is identified with income inequalities and other conditions leading to low social mobility and widening income disparities.
With these distinctions made, it is argued that globalization often furthers destructive inequality because many developing countries lack the social
institutions to mitigate destructive inequality and further constructive inequality. Moreover, the incentive given by globalization to developing countries is to dispense with the indicated institutions for constructive inequality if immediate investments intent upon immediate returns are to be forthcoming. Accordingly, the article argues for a global polity that will permit and indeed induce resource inflows from the developed economies in aid of the establishment of social institutions in the developing countries that would operate to foster constructive inequality (which as the critique above implies, would actually operate towards an equal-opportunities society).