Inequality - 5 Myths Debunked: Myth 4

Continuing the series…

Myth 4: A rich place like the UK has far too much inequality.

Reality: The UK's inequality is a sign that things are improving for developing nations.

To see why inequality in the UK is not a problem, we need to talk about its relationship with global inequality. The general wisdom on global inequality is roughly this: that a much more globalised free market is helping poorer countries develop a lot quicker than they used to, and incidentally at a faster rate than the richer ones. Notice the key word there being 'global' inequality. National inequality - that is, in-country inequality in places like the UK and USA is rising.

An increase in in-county inequality in places like the UK and USA is exactly what you should expect to see when there is a decrease in global inequality, because people in wealthy nations in the lowest and second lowest quintile are now competing for jobs with people in the lowest three (or in some cases four) quintiles in developing countries. In other words, increased inequality in the UK and USA is good news, not bad news, because it signals that tens of thousands of people in developing countries have been and will continue to be lifted out of poverty by being competitive in the global market.

If people on the hard left are really true to the Marxist conception of fairness that they so frequently espouse - "From each according to his ability, to each according to his need" - then they should be pleased and optimistic about this, because increased in-country inequality amounts to increased well being of the ones with the greatest need - the poorest and least well off people in the world.

You may assert that in-county inequality is a lot due to the increased wealth of the very richest in society, so there is every reason to moan. But it's the richest in society who are doing the most to engender a broader and more inclusive globalised market, so this is exactly what we would expect to see. It's true, of course, that people struggling in wealthy countries still need help, and their situations are not be trivialised, but it would take a pretty parochial, ethnocentric, even possibly xenophobic person to prefer the diminution of the UK and USA's pretty bad poverty situations over the diminution of the wider, more futile and life threatening poverty situations in the developing world (unlike the UK and USA, many of the world's poorer countries don't have a properly functioning welfare system).

I'd be wary of anyone who wants to make a reputation writing dissonant articles about the 'speck' of increasing UK or USA inequality while paying no regard for the 'plank' of increasing global equality that a globalised market is bringing to the world's neediest people. There's a long way to go yet though - but we're continuing to move in the right direction.