Home > The Great Unraveling? > Growing Economic and Environmental Inequality

Despite prevalent claims that economic well-being has been on the rise in recent decades globally, the post-colonial period has been one of increasing, not decreasing, inequality between the Global North and Global South.

Growing economic and social inequality is a driving factor in a range of major problems, from poor health to political fragmentation, but also deeply manifest in the climate and broader environmental crisis.

In this episode of the “Great Unraveling?” series, Jason Hickel joins Laurie Laybourn-Langton to  explore the state of economic and environmental inequality today and its implications for the future.  

Dr. Jason Hickel is an economic anthropologist, a Senior Lecturer at Goldsmiths University of London, and serves on the Statistical Advisory Panel for the UN Human Development Report 2020. His research focuses on global inequality, political economy, post-development, and ecological economics, which are the subjects of his two most recent books: The Divide: A Brief Guide to Global Inequality and its Solutions (2017), and Less is More: How Degrowth Will Save the World (2020).


Laurie Laybourn-Langton
Growing economic and social inequality is implicated in a range of major issues from poor health to political fragmentation issues, which have received far more attention in recent years. And the environmental crisis itself is an issue of equity. The problem is largely caused by wealthy communities and countries. And it’s impacts fall disproportionately on those who are poor and less responsible.

This episode explores the state of inequality today, and its implications for the future. To do so, I’m joined by Dr. Jason Hickel, who is an economic anthropologist, a senior lecturer at Goldsmiths, University of London, and serves on the statistical advisory panel for the UN Human Development Report 2020.

His research focuses on global inequality, political economy, post development, and ecological economics, which are variously the subjects of his two most recent books in 2017, The Divide: A Brief Guide to Global Inequality and its Solutions. And this year, Less is More: How Degrowth Will Save the World.

Jason, welcome.

Jason Hickel
Thanks, good to be with you.

Laurie Laybourn-Langton
It’s good to have you here. So let’s launch into the first question. It’s common to hear the story that global poverty has reduced significantly in recent decades, along with reductions in inequality, at least within some countries. What’s your take on that story?

Jason Hickel
Yeah, it’s a problematic narrative. It’s one that’s been dominant for quite a long time now. The narrative relies on World Bank figures, of course, which has been repeated by the UN, you know, entities in the STGs and so on. But, scholars have been raising red flags about this narrative for a very long time, actually.

Finally, now that’s become out in the open and there is now this kind of a strong consensus building against the narrative, on the grounds that: A) the vast majority of gains against poverty over the past few decades have come from one place in the world, and that’s China. And that’s important because China was not structurally adjusted, according to the Washington Consensus model, that was applied to the rest of the Global South through the structural adjustment period in the 1980s and 1990s.

So most of the South suffered kind of this imposition of radical neoliberalism, which actually caused an increase in poverty, whereas China did not. China was allowed to continue with its kind of development policies, against the will of Washington, for the most part.

So when you take China out of the equation, then the story immediately changes. And suddenly, we see that there’s been no reduction in the total number of people living on less than $1.90 a day at all since 1980, when measures began.

But furthermore, there’s been real questions raised about the $1.90 figure, okay. So, interestingly, for a figure that has become so, you know, dominant and so widely used, it has no empirical basis—in terms of its ability to meet actual human needs.

We have piles of evidence now showing that people who live above that are still not able to access even basic human nutrition, to say nothing of things like shelter and so on. So it’s an empirically baseless metric. Scholars have been insisting there’s a minimum empirical threshold for measuring poverty, which is the minimum necessary for nutrition.

And normal human life expectancy, about 70 years, is about $7.40 cents a day. Okay. So what happens when we measure global poverty at that level? The story changes completely. We see that now 4.2 billion people—around 60% of the human population—live under that threshold. Okay. And the number of people living under that threshold has grown dramatically since the 1980s. We’ve seen an explosion in the number of people living in poverty.

Even in proportional terms, with China out of the equation, even proportionately, the number has been growing up until very recently. So the problem is A) worse than we’ve been told to believe; and B) has been getting worse during the 80s and 90s, during the structural adjustment period, and only recently sort of stabilizing. So it’s a serious issue. It reveals that the global economy is basically not working for the majority of humanity.

That’s an important inversion of the dominant understanding, which is that the global economy is working just fine to get rid of poverty, and so we should keep doing what we’re doing with neoliberal globalization and so on. But the truth is exactly the opposite.

It’s stunning to me the disjuncture between the dominant media narrative that we’ve all internalized, and the actual scholarly narrative which runs completely against it. So I think that, basically, we academics have done a bad job of standing up against kind of a dominant media narrative promoted by people like Bill Gates and Steven Pinker. But now people are beginning to do that, and that narrative is crumbling.

Laurie Laybourn-Langton
So let’s bring in another element, sorry, that is increasingly affecting that prevalent narrative—the populist one—that does not actually sync with the reality. Let’s bring in the environmental crisis.

The UN has warned the climate breakdown, and I quote here, “threatens to undo the last 50 years of progress in development, global health, and poverty reduction.” And then they go on to say, potentially creating a world of “climate apartheid.”

So it would be good to hear from you, your interpretation of the links between inequality, between poverty, and the environmental crisis, and environmental limits—both in terms of how those issues are already interacting and how, again, the consequences may be different from the mainstream narrative.

Jason Hickel
Yes. First, let’s get a handle on how bad inequality is right. Again, there’s kind of this mainstream narrative that inequality has been reduced over the globalization period. But here again, scholars point out that, in fact, exactly the opposite is true.

The World Bank likes to tell us about inequality in terms of relative gains in income, okay. So if a poor person’s income doubles from $1 a day to $2 a day, that’s considered to be a greater increase, then if a rich person’s income increases by 50%. But given that the rich start at an extraordinarily much higher base, the the absolute gap is growing dramatically, despite that. If you look at it in absolute terms, again, the story changes.

And so what we see is that the real per capita income gap between the Global North and the Global South has widened dramatically since the end of colonialism. It’s nearly quadrupled in real absolute terms.

So the post-colonial globalization period has actually been one of increasing inequality between the North and the South, rather than decreasing inequality. It’s exactly the opposite of the outcome that we’ve been sort of lulled into accepting.

Now, this has significant implications for what’s happening with the climate. Because climate change, and the causes and consequences of climate change are similarly divided between North and South.

In terms of national contributions to emissions in excess of the safe planetary boundary of 350 parts per million, the Global North has contributed 92% of those excess emissions—which means that 92% of the damages caused by climate breakdown, are being caused by excess emissions in the Global North, right? That’s extraordinary.

The Global South collectively has contributed 8% of excess emissions. And yet, despite that fact, they suffer more than 90% of the costs of climate breakdown in terms of damages, and in terms of loss to economic output. And they suffer 98% of all climate change related deaths.

So despite the majority of climate damage being caused by the North, the vast majority is being suffered by the people in the South, who have done virtually nothing to cause the problem in the first place.

That is, I think, really absent from our from our narrative here. And we have to include it. So, yes, I think the argument about climate apartheid, is exactly right.

You know, we’re already seeing climate breakdown cause hunger rates to increase and poverty rates to increase, and most importantly, mass displacement across areas like Central America, happening right now. I mean, Bangladesh is a third underwater as we speak.

These places are increasingly uninhabitable for humans in terms of the possibility for stable agricultural output, and the possibility for safety from storms and flooding. And what’s going to happen as that occurs, is there’s going to be increasing movements of people to safer, more habitable parts of the planet, which happen to be in the Global North, since the Global North is least harmed by climate breakdown. And that’s going to cause political conflagrations unless we have a radical approach to rapid emissions reductions and a safe way to deal with the consequences of it.

Laurie Laybourn-Langton
So that was going to be my next question, which is that if we if we are already, in some respects, living in a world of apartheid—between those who are over enjoying and exploiting what’s left of a stable global environment, and those who are suffering under it, and didn’t get the benefits anyway—as we look into that future under business as usual scenario, and that divide grows greater and greater, and the instability that then results from it, what is the alternative to that?

What is needed now, such that we can tackle the emergence of that nightmarish future? And I mean that beyond just the ones that we are all aware of in the mainstream narrative, of the need to increasingly deal with environmental crisis. We already have destabilization baked in, so we’re going to have to deal with that anyway. What is the alternative approach that we need to take, that complements existing mainstream narratives about mitigation and adaptation?

Jason Hickel
Yeah, well, first of all… So now virtually everyone’s on board with the idea of staying under 1.5 degrees. I would say this is increasingly part of our discourse. And that’s important because literally 2 degrees is is extremely dangerous for much of this planet.

Maybe the UK will be okay under such a scenario, for instance. But for much of the Global South—to put it in the words of one of the Global South chief climate negotiators—it’s basically a death sentence. It’s basically a suicide pact, right? They never agreed to 2 degrees. Two degrees as a threshold was imposed, basically, by Global North negotiators. One point five. We must insist on a 1.5 degree future. To do that, we know that we have to get global emissions down to zero by 2050.

But, remember, that the Paris Agreement has a clause in it that emphasizes common but differentiated responsibilities. What that means is that high income nations have responsibility to reduce their emissions much more quickly than poorer nations.

What does that look like? According to the Stockholm Environment Institute scientists, who have modeled this, that means getting down to zero by 2030. Okay. Now, that focuses the mind. That sharpens the mind. That is much more dramatic than anyone is presently planning to do.

The UK is planning for 2050. You know, the Green New Deal plan in the US is 2050. So we’re talking about a much more dramatic, more rapid trajectory. And, apart from anything else, that will require post-growth and degrowth strategies in the North. Because the IPCC is clear that it’s not possible for us to reduce emissions, to stay within current budgets for 1.5 degrees, while pursuing economic growth at the same time.

More growth means more energy demands. More energy demand makes it all the more difficult for us to roll out enough renewable energy capacity to cover it. So the less economic expansion you have, the less energy you need, the easier it is to cover that with renewables.

That’s what the IPCC report in 2018 calls for. And yet somehow that dimension got lost in the media coverage of this report. Okay, but that’s the hard truth of it. And so, you know, this requires us to rethink the way that our economies work. There’s really no other way around it. And that has to be part of our conversation.

So I would say yes, rapid, radical emissions reductions is our key alternative. That comes along with post-growth economic principles, a dramatic reduction in material and energy throughputs in high-income nations. But it must also come along with global justice, with key global justice demands, right?

If you want to avoid the kind of mass displacement and political instability that is going to result from a continuation of the business as usual approach, then you need to rethink the way that distribution works in the global economy.

We need debt cancellation for Global South countries. We need an end to structural adjustment policies, which are still being imposed on Global South countries by creditors. We need something like a global minimum wage system to ensure that people in the south receive fair wages for the work that they put into the global economy.

I mean, we have a situation right now where the Global South contributes… this is crazy… the Global South contributes about 80% of the labor and resources that go into the global economy. And yet the people who render that labor in those resources receive about 5% of the income that the global economy generates each year.

That is crazy. And that’s got to change. I mean, this is effectively a colonial arrangement that remains in place today, and nobody talks about it. And it’s in place because of fundamental power imbalances in the global economy between the Global North and the Global South.

Countries in the Global North have all the power, have disproportionate power in the World Bank and the IMF, which control international economic policy. They get their way in trade negotiations in WTO, where bargaining power depends on market size, right? Over and over again, the richest countries get to determine the rules of the global economy.

So we have to democratized the World Bank and the IMF—a demand that’s been coming from the South for decades now. We need to democratize the international trade system to ensure that the South receives fair returns for its resources and labor.

Without that, then you’re going to see, I’m afraid, increasing polarization, increasing instability, and mass displacement. And so, you know, I guess my message is that these two have to come together. We have to have a shift to post-growth policy in the North for the sake of rapid climate mitigation. But that must come along with a global justice lens for the South.

Ultimately, what’s happening right now is a process, of atmospheric colonization by rich countries, but also a process of material and labor colonization. And so we have to address these two functions together. They’re part of the same sort of deadly package. And the 21st century must be the century that this gets resolved.

Laurie Laybourn-Langton
I think that’s the perfect note to end on. Jason, thank you so much for joining us.