Transcript Globalisation and Inequality Overcoming the

Globalisation and Inequality
Overcoming the Progressive Challenge
Olaf Cramme
Policy Network
Melbourne
12 April 2007
Debate about globalisation
• Impact of globalisation heavily contested on left and right
• Managed capitalism (1960-1979) including Rhine
capitalism and Japanese capitalism
• Washington consensus / (neo-)liberal economic integration
since 1980
• Disputes about
(a) poverty reduction
(b) growth
(c) unemployment
(d) inequality
Atlas of Global Inequality: Ratio of income in one country to the world mean
Source: The UC Atlas of Global Inequality
Map of countries by GDP (PPP) per capita, in international dollars
Source: Wikimedia using IMF data of 2005
Distribution of people in the world according to GDP per capita n
international dollars of country where they live (year 2000)
India
China
.3
Fraction
.2
Brazil, Russia
.1
W.Europe,
Japan
USA
0
5000
10000
20000
gdp per capita in ppp
30000
Source: Milanovic, 2005
World Map GINI coefficient
Source: Wikimedia
Debate about globalisation and
inequality
Agreement
Disagreement
Global inequality is very high
Global inequality has risen since
1970/80
International inequality increased
after 1980
The effects of globalisation on
inequality
Inequality has risen in most highincome countries
Causality between globalisation and
inequality
Inequality has risen in most
developing countries of the “new
globalisers”
Trend in recent global and
international inequality
International and global inequality
1950-2000
0.7
Global Inequality
Gini Index
0.6
0.5
19
50
19
52
19
54
19
56
19
58
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
0.4
Year
World unweighted
World population-weighted
World weighted except China
Source: Milanovic, 2005
Income inequalities
UK
Australia
US
(inequality
among male
adults)
Sources: Office for National Statistics
Year
GINI coefficient
Year
GINI coefficient
1970
0.394
1980
0.403
1970
0.310
1980
0.278
1990
0.428
1990
0.338
2000
0.462
2000
0.383
US Census Bureau
Andrew Leigh, Australian
National University
Average annual increases in GINI coefficient for equivalent
disposable income since 1979
Sources: Burtless 2001, Saunders 2001 and Harding and Greenwell 2001
Why internal, international and global
inequality matters
• Adverse effects of inequality:
Higher poverty, lower economic growth to poverty reduction, lower
average health, high crime rates, weaker property rights, poorer
standard of public services, more fragile democracies,
(Note that causality is not proven but empirical evidence suggests
strong correlation between inequality and these variables – see e.g.
WB World’s Development Report 2006; UNDP Human Development
Report 2006; Wade 2007)
• Likelihood of increased migration
• Moral-ethical concerns / question of justice / global community
• Extreme inequality source for potential social and political tensions
New cleavages
Globalisation seems to have reinforced the following two cleavages that
structure political space in most OECD countries
•
•
•
Socio-economic dimension
(welfare, budget, economic
liberalisation)
Opposition between pro-state and
pro market position given new
meaning and emphasis
Pro-state likely to become more
defensive and more protectionist
Pro-market likely to become more
assertive of the enhancement of
national competitiveness on world
markets
Cultural dimension
(cultural liberalisation, immigration,
Europe)
• Enhanced opposition to the cultural
liberalisation of the new social
movements
• Defence of tradition is expected to
take on an increasingly ethnic or
national character
• Central to this is the issue of
immigration
See Hanspeter Kriensi et al, 2006.
Dilemmas for modern social democracy (1)
• Often undifferentiated position to these cleavages because of
uncertainty due to internal division with regard to economic and
cultural integration
• Mainstream political parties tend to formulate a “winner’s programme”
(Kriensi), i.e. a programme in favour of further economic and cultural
integration  increasingly challenged by populist parties that
formulate “loser’s programmes”
• Increased market integration is perceived as threatening national social
achievements and causing rising inequalities  appears bigger
dilemma for centre-left than centre-right
Dilemmas for modern social democracy (2)
• In developed countries policy-makers often claim that global economic
integration benefits rich people proportionally more than poor people
 In the developing economies policy-makers often view globalisation
as providing good opportunity for their country and people
• Progressive left concerned with global social justice (through economic
openness) and advancing social justice ‘at home’  complex
relationship
• Historically, social democrats have framed the case for justice and
security as pre-occupations of nation states alone  no longer viable in
a globalising world
Overcoming the challenges (1)
• Global economy has to be managed to ensure a more equitable
distribution of the costs and benefits of globalisation for every citizen
 Agenda focusing almost exclusively on inclusion, opportunities and
community obligations for citizens not good enough anymore
 Yet policies relying predominately on redistribution not a solution
• If the triumph of shareholder capitalism over stakeholder capitalism is
inevitable what is the social democratic answer?
• Recognising the complex inter-relationship between states and markets
as well as the limits to both as models for organising the economy and
the production of public goods
• Re-interpretation of social justice and equality in the 21st century
 Looking at life course dynamics and new social realities
Overcoming the challenges (2)
• Programme and agenda that include both winners and losers from
globalisation
• A new social democratic narrative in a world of globalisation that
disentangles today’s complexity in policy-making, bridges realism and
idealism and spans the regional, national and international level
• Concept for Global Social Democracy including a strong focus on
multilateral cooperation on issues such as environment, international
development and security
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