Is doing something about inequality a choice between bash the rich v tackling poverty? Some thoughts for Blog Action Day

Today is Blog Action Day, and we’re all supposed to blog about inequality. Ricardo Fuentes (Oxfam Head of Research) & his team are even marking the day by kicking off a 85 v 3.5bn cartoonnew inequality-themed blog, Mind the Gap – check it out.

I’ve already done my more general call to arms for BAD, so here’s something more in keeping with this blog’s usual tone of navel-gazing uncertainty: I’m a bit baffled by the stuff I’ve been reading recently on inequality and the post-2015/Sustainable Development Goals, and in particular what issues to focus on if you are ‘tackling inequality’. Allow me to spread my confusion (and ask you to vote, right).

Claire Melamed of ODI has a piece discussing inequality and the post-2015 agenda, called ‘The other half: To end inequality, we must realise that it isn’t about the rich, it’s about the poor. And we know almost nothing about them’. She asks:

‘What does it matter to an impoverished farmer in South Sudan if 85 people hold as much wealth as half the world’s population? If those 85 people gave everything away, would that actually help the farmer? The problem, I have come to think, is that there are two very different ways of thinking about inequality. The first is all about the rich. The second is all about the poor. The first is the one we usually hear about. The second is the one that really matters.’

Claire reckons that all the focus on the rich is a distraction, generating lots of outrage but ‘a dearth of actual policy ideas’.

She recognizes that more redistributive taxation is one such idea, but argues:

‘If governments make very rich people a bit poorer by changing tax or inheritance rules, who’s to say the money won’t just be spent on missiles or grandiose infrastructure projects or other things that people don’t really want, and which certainly won’t help to tackle extreme poverty? ‘

Instead, she argues ‘we need to look, not at the top of the wealth distribution, but at the bottom; not at the inequalities that make people rich, but the ones that keep people poor.’

Class_War 2_250px

Her big idea is that the position of poor people ‘depends to a remarkable degree on the groups that they belong to. Where do they live? What is their ethnic group or religion? Do they have a mental illness or a physical disability? What family do they come from?’

So the kind of inequality we should be addressing is group-based inequality, which basically comes down to affirmative action and supporting the empowerment of marginalized groups.

At which point, I headslapped and said ‘hold on – that’s the Chronic Poverty agenda, which another bit of ODI has been working on for a decade.’ Not sure her colleagues will be best pleased to hear that ‘we know almost nothing about them’.

Then I took a look at Save the Children’s new report ‘Leaving No One Behind’, which argues for ‘Embedding equity in the post-2015 framework through stepping stone targets’. But in turns out that ‘Stepping stones’ are just a catchy phrase for interim benchmarks for the disadvantaged groups – we’re back to chronic poverty again.

So is that it – does all this fuss about inequality just boil down to forgetting about the excessively rich and powerful, and getting back to addressing chronic poverty through a combination of targeting, anti-discrimination and group empowerment? That view seems to fit pretty much with the World Bank’s ‘shared prosperity’ agenda, which neatly sidesteps inequality to focus on ‘fostering income growth of the bottom 40 percent of the population in every country’.

That seems like a bit of a cop-out to me – surely we should do both? Recovering and strengthening the sense of social responsibility of the powerful is important, as is attacking the chronic poverty of the people at the bottom of the heap – why can’t they be mutually reinforcing? At the top, the effort includes more and fairer redistribution through taxation, but also thinking about ‘predistribution’ – some economic models pile up inequality by, for example, favouring capital intensive sectors, whereas others generate more benefits to the poor by creating jobs or involving small farmers in value chains. Then there’s the need for constraints on elite power and political capture – when was the last time a development organization talked about the rules governing lobbying or financing political campaigns, North or South? Put them all together and the overall task becomes something like supporting the strengthening of the social contract between (all) citizens and the state.

Don’t get me wrong, I think the chronic poverty agenda is really important (that’s why I’m on the advisory board of the Chronic Poverty Action Network). But I felt their most recent

Erm, probably not
Erm, probably not

Chronic Poverty report lost the plot a bit on the SDGs: instead of arguing that chronic poverty is what is left when all the relatively easily reducable poverty has been tackled, and should thus be at the core of ‘getting to zero’ in the post 2015 process, the report went off at a tangent about what to do about people who are not chronically poor, but ‘churn’ in and out of poverty over the course of a year. That’s interesting and important, but people who churn are by definition, not the chronic (i.e. permanent) poor.

So within ODI, Claire Melamed (who runs the team on growth, poverty and inequality, but mainly does post 2015 stuff) is advocating putting chronic poverty at the heart of the SDGs, while the actual chronic poverty people are talking about something else. And anyway, I disagree with both of them, because we should be addressing both the top and bottom of the inequality equation. Feels like time for a poll (if only to put Tim Gore out of his misery for getting the ‘wrong’ answer on the last one).

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14 Responses to “Is doing something about inequality a choice between bash the rich v tackling poverty? Some thoughts for Blog Action Day”
  1. Charles Knox-Vydmanov

    I share your confusion Duncan. I personally think that a focus on “the poor” is really problematic in terms of reducing inequality, as I don’t see many examples of where policy that is focused on the poor gains much investment. As Sen put it neatly “Benefits meant exclusively for the poor often end up being poor benefits.” This is born out in the global picture of social protection. I’ve written a bit about why this focus is problematic:—charles-knox-vydmanov.pdf

    I also agree an exclusive focus on “the rich” is limited.

    But aren’t we missing the biggest issue, which is the “middle class”? In reality, this middle class in most low and middle income countries is actually a group of people who may be “non-poor” but face substantial vulnerability. My sense is redistributive policy stems from a social contract where this major force in the population agree to pay tax (based on their means) to support a basic level of social security and services. If these policies are designed well, they will particularly benefit the poorest, but also provide the political foundation for taxing of the rich.

  2. Nicholas Shaxson

    I agree, but I think it would be good to explicitly put the words ‘wealth extraction’ in there somewhere. Which is another, I think friendlier, way of talking about rent-seeking. If the rich are extracting wealth from poorer sections of society, (e.g. via bank bailouts, just to cite one among innumerable examples) then no strategy can work without tackling these problems at the top. Inequality is a good bridge through which to make this connection. The Equality Trust has more to say here, via TJN:

  3. Joern Geisselmann

    I have been struggling with similar questions as you, Duncan, for some time now and I am grateful that you bring them up for discussion. What has to change if we take high, and mostly growing, inequality into the equation? To simply keep on doing the same stuff that we have been doing before – poverty reduction -, perhaps now with a stronger focus on the chronic and ultra poor, seems not enough to me (though this is certainly very important). I thus disagree with Claire Melamed that it isn’t about the rich. To me, it is clearly about both the rich and the poor.

    There seem to be no easy answers though. Real progressive taxation should, in my opinion, certainly be part of the answer. Philanthrophy as well. Eventually I think, however, the debate needs to move beyond these issues and investigate (and address!) the systemic causes that create a world where a few dozen or hundred people own half or more of the world’s wealth while billions live in poverty and even in OECD countries more and more people live vulnerable and insecure lives.

    Yes, should the 85 richest persons in the world give away all their wealth today, this might not change the life of the mentioned impoverished South Sudan farmer much, at least not for long. But advancing a global culture and an economic system where injustice and the exploitation of others is no longer tolerated with indifference and disproportionate gain is no longer regarded as the emblem of success will eventually.

    • Muhsin Maltezos

      Nice comment, and the most relevant that I have read so far here. I do not believe there will be any improvement in the eradication of poverty until the injustice and exploitation inherent in the present cultural and economic system is addressed.

      If there is to be a sustainable solution, these issues need to be acknowledged and an alternative system that promotes social and economic justice put into place with the broadest possible base for support.

  4. Daria Ukhova

    Hi Duncan, thanks for a really thought-provoking post. And for drawing attention to Claire’s post, which actually made me feel quite ambivalent.

    On the one hand, I do agree with you that the suggestion to focus on the bottom of the redistribution, indeed, seems an old story. Inequality is a relational phenomenon, and while Claire seems to recognise this fact saying that ‘Governments tend to look after their own, namely the groups close to the top of the wealth distribution’ (isn’t it the slightly disguised political capture argument?), somehow this bit of the argument then evaporates from by the end of her article.

    On the other hand, I think Claire raises a very important issue of horizontal inequality, which – and on this I agree with her – has been pretty much overlooked in the current spike of attention towards the rich. I remember a discussion in Oxfam about this back in February, when I asked, if we had looked at what gender and what ethnicity those 85 richest people were? In a recent discussion on global inequality, it also occurred to me that the 85 story actually also says something about global inequality – you just need to look at nationalities of those people. If inequality is a relational phenomenon, then we should also recognise that it’s also about the relationship between men and women, ethnic groups, etc. and even about the relationship between different countries (as the recent case of American vulture funds vs. Argentina suggests)

    So, I think it’s important not to divide the two perspectives on inequality, but rather combine them and look for policy solutions with both of these perspectives in mind.

  5. Robert K. Walker

    Dear colleagues,
    When Nietzsche wrote in 1883-1885 that (traditional concepts of) God were “dead,” he hit the nail on the head. Without spiritual motivation of some sort, there has been little reason for the rich and powerful to sincerely concern themselves with inequality (or the environment, for that matter). At about the same time, admonitions were being addressed to the peoples, and particularly to the wealthy and the rulers, of the earth:
    The poor in your midst are My trust; guard ye My trust, and be not intent only on your own ease.
    (Baha’u’llah, The Persian Hidden Words)
    Bind ye the broken with the hands of justice, and crush the oppressor who flourisheth with the rod of the commandments of your Lord, the Ordainer, the All-Wise.
    (Baha’u’llah, Synopsis and Codification of the Kitab-i-Aqdas, p. 21)
    Congratulations on offering a forum for discussion of this issue.
    Robert K. Walker, EdD

  6. Ken Smith

    While it might be hard for the richest 85 to give away their wealth , it really is a large amount of cash , and could make a significant difference to the Sudanese farmer. It just indicates the priorities we have in the current world system.

  7. Diego Sanchez Ancochea

    We need to find agendas that create opportunities and pressures to tax the rich (something always hard) while benefiting the poor and other members of society as well. In particular, this is a great opportunity to justify and put in the agenda universal social policies. Juliana Martínez Franzoni and I argue that universalism should not mean massive coverage for all even if services are different for different groups. It should include massive coverage of equal, high quality services in health care, pensions and other services. If we frame universal social policy in this way, we will be favouring the poor (which benefit from quality and from having the middle class in their favour) and large segments of the middle class, while increasing pressures to tax the rich. This is exactly what the equity agenda (which goes well beyond pro-poor interventions) should follow

  8. Faiza Shaheen

    Hi Duncan, thank you for yet another great blog. You touch on really important issues in this piece, and I both agree and disagree with you. I recently joined Save the Children, having formally been at the New Economics Foundation, so have considered the issue of inequality from many different angles. I’ve come to the following conclusions:
    • Both group-based and economic inequality matters. We can’t ignore that in parts of the world discrimination on the basis of race, religion, gender etc. is still rife. At the same time, economic inequality is a sign that the economic system we employ is far from inclusive. Truly addressing inequality requires us to take steps to address both types of inequality, which can look quite different on paper but are ultimately complementary.
    • On the focus on the rich or poor, I agree it’s not an either/or issue. We do need to do something about redistribution and tax avoidance etc., at the same time just addressing wealth at the top will not necessarily mean we will lower poverty or increase government spending on the poor. Ultimately, this is not about blaming rich people but economic and political systems – if we can get those right we will address poverty while lowering inequality.
    • We haven’t yet developed a coherent set of policies that will address inequality. Currently the discussions about inequality in political circles are largely stuck in the rhetoric mode – we need to push policies such as government accountability, universal health care and social protection measures to direct action.

    On your comment about the Save the Children stepping stones work, we are very clear that we care about both between and in-group inequality (in the report you mention, as well as others such as Framework for the Future and Born Equal) – that’s why we advocate for a target to reduce income inequality as well as measures to close the gaps between groups in the post-2015 framework. Ultimately inequality is too big a challenge to get fixated on one point, we need to attack from all angles.

  9. William Hayes

    Your initial bafflement put me in mind of a long-ago Ms. Magazine article lamenting the paralysis that comes of such notions as this:

    “Before we support some change intended to benefit women in our world, we ought to be sure that the women whose situations we intend to better are the most deserving of all those whom we might help:

    — not just women, in general, but working-class women
    — not just working-class women, but those in 3rd world countries
    — not just working-class women in 3rd world countries, but….”

    and more generally and perhaps more often stated thus:

    “Before we put out hands and hearts to any task intended to make the world a better place, we ought to be sure that the task we choose is not only a good one, but is the best possible one that we might be doing.”

    All in all, a wonderfully liberating post with an inspired ending (the Poll) a la “OK, break’s over! VOTE and get back to work!”

  10. Robert K. Walker

    There have been highly publicized examples of a few very wealthy American men spending a fraction of their wealth on social programs in poor countries. There are other examples of expression of opinions in favor of measures to reduce domestic inequality, such as the Earned Income Tax Credit. As restrictions on direct political contributions are being eased or eliminated, billionaires spend millions supporting candidates that favor or oppose certain environmental policies (but I haven’t seen any doling out megabucks to candidates proposing to reduce inequality). In Brazil, ten São Paulo billionaires have had an out-sized effect on an election process in which the black woman candidate has already been eliminated and a rich white man from a neighboring state seems poised to become the next president – with unknown consequences for the recent trend to somewhat reduce inequality in this, the most unequal big country in the world.

  11. aldo matteucci


    I’ll put this in here, hoping for this article to catch your eye:

    Rory Stewart Chairman of the Defence Committee of the House of Commons and the author of The Places in Between, among other books. He was previously the Ryan Professor of ­Human Rights at the Harvard Kennedy School, has just published an indictment of Western policies in Afghanistan:

    You may want to ponder and discuss the issues – and our refusal to see the “real-existing” situation, while running after lofty concepts.

  12. Sam Gardner

    A very good post, and I think the point is well made.

    Poverty is bad and it is important to help the poor. But the real underlying problem is power. By tackling only the poor you build charity into the system, which is instead of justice.

    Justice is a right. Charity is not.

    If push comest to shove, the injustice of inequity will not be tackled with programs only targeting poor. It will be tackled by allying the poor with the middle class.

    The middle class who believe they are allied with the super rich and there will be trickle down eventually.

    So I believe in the long run, it is equity, the balance rich and poor that counts. Aiming at the poor only will not really lead to equity in the long run, because the power relations leading to inequity are intact.