Economic Inequality

The greater the amount of inequality between the rich and the poor, the harder it is to maintain democracy_1,2. As the 21st century progresses, we have seen a tide of protests, demonstrations and civil disruption, most of which are connected by "deep and rising frustrations with inequalities"₃.

The United Nations say that 46% of the world's wealth is owned by the richest 1% of the population₄, and economists think somewhere between 10% and 50% of it all is held in tax havens_5,6, forcing the poor to pay a much higher proportion and causing true damage to democracies and developing countries alike.₇

Big businesses in 2022 hid about $1 trillion profits by exploiting loopholes. Billionaires do the same, and as a group achieve the lowest taxation of all (less than a percent). To tackle all this inequality of opportunity and rolling poverty, policies "require much more than a mechanistic transfer of income. They often need to address social norms, policies and institutions formed deep in history"₈.

1. Gini Inequality Ratings, by Country and Region
2. Multidimensional Poverty
3. Inequalities By Region
4. Tax Havens
5. Instability and the Failure of States
6. UK's Anti-Tax-Avoidance Antics at EU Level
7. Links

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1. Gini Inequality Ratings, by Country and Region

#1980s #1990s #2000s #2010s #capitalism #economics #inequality #social_development

Income Inequality (Gini Coefficient) (2023)9
Pos.		Lower is better %9
1	Slovakia	24.1%10
2	Slovenia	24.3%10
3	Belarus	24.4%11
4	Ukraine	25.6%11
5=	Netherlands	25.7%10
5=	Moldova	25.7%10
7	Iceland	26.1%12
8	Czechia	26.2%10
9=	UAE	26.4%13
9=	Kyrgyzstan	26.4%14
11	Belgium	26.6%10
12=	Syria	26.6%14
12=	Azerbaijan	26.6%15
14	Tonga	27.1%10
15	Algeria	27.6%16
16=	Norway	27.7%17
16=	Finland	27.7%10
18	Kiribati	27.8%17
19	Armenia	27.9%14
20	Denmark	28.3%10
q=167.

Income Inequality (Gini Coefficient) (2023)9
Pos.		Higher is worse %9
167	S. Africa	63.0%18
166	Namibia	59.1%19
165	Belize	57.7%20
164	Colombia	54.8%14
163	Swaziland	54.6%21
162	Botswana	53.3%19
161	Brazil	52.0%14
160	Zambia	51.5%14
159	Angola	51.3%13
158=	Mozambique	50.3%17
156=	Zimbabwe	50.3%17
156	Panama	48.9%22
155=	Congo, (Brazzaville)	48.9%16
154	Guatemala	48.3%18
153	Honduras	48.2%17
152	Costa Rica	46.7%22
151	Nicaragua	46.2%18
150	Comoros	45.3%18
149	Paraguay	45.1%14
148	Lesotho	44.9%12
q=167.

The Gini coefficient measures the imbalance amongst incomes in a country; lower scores are better. 100% is absolute and universal inequality, and 0% means that incomes are distributed equally between people₉. It doesn't factor-in standing wealth (just income), so its not a comprehensive indicator of all inequality. By averaging countries' results by continent, you can see the best regions: Europe (30.8%), Asia (33.0%) and The Middle East (33.3%)₉; and also the worst: South America (44.2%), North America (43.8%) and Africa (40.7%)₉.

“Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. [...]Data are based on primary household survey data obtained from government statistical agencies and World Bank country departments. Data for high-income economies are mostly from the Luxembourg Income Study database.”

World Bank (2024)
data.worldbank.org/indicator/si.pov.gini

Note that on the table, the 'current' value doesn't generate points for the Social and Moral Development Index; it's a visual indicator only. The historical averages are what give countries points. This is because the latest data for many countries is still from the 2010s, for which an average is already calculated.

Regional and historical data.

	Area	2023 %9	2010s Avg23	2000s Avg23	1990s Avg23	1980s Avg23	Countries, Highest & Lowest
	Africa...	40.7%	41.7%	43.4%	47.4%	42.3%	Algeria (27.6%), Guinea (29.6%) and Egypt (31.9%) S. Africa (63.0%), Namibia (59.1%) and Swaziland (54.6%)
	Asia...	33.0%	34.6%	36.0%	36.8%	35.9%	UAE (26.4%), Kyrgyzstan (26.4%) and 2-country draw Turkey (44.4%), Philippines (40.7%) and Malaysia (40.7%)
	Australasia	34.8%	35.2%	39.9%	39.2%	32.3%	Tonga (27.1%), Kiribati (27.8%) and Fiji (30.7%) Papua New Guinea (41.9%), Micronesia (40.1%) and Tuvalu (39.1%)
	Europe...	30.7%	31.7%	31.9%	31.4%	28.4%	Slovakia (24.1%), Slovenia (24.3%) and Belarus (24.4%) Turkey (44.4%), Bulgaria (39.0%) and Lithuania (36.7%)
	North America	43.8%	45.9%	49.4%	47.8%	46.8%	Canada (31.7%), Dominican Rep. (37.0%) and El Salvador (38.8%) Belize (57.7%), Panama (48.9%) and Guatemala (48.3%)
	South America	44.2%	46.4%	51.4%	51.4%	50.4%	Suriname (39.2%), Peru (40.3%) and Uruguay (40.6%) Colombia (54.8%), Brazil (52.0%) and Paraguay (45.1%)
	The Middle East...	33.4%	34.3%	35.9%	37.5%	40.3%	UAE (26.4%), Syria (26.6%) and Iraq (29.5%) Turkey (44.4%), Israel (37.9%) and Yemen (36.7%)
	World	36.5%	37.7%	39.6%	40.8%	38.0%	Slovakia (24.1%%), Slovenia (24.3%%) and Belarus (24.4%%) S. Africa (63.0%%), Namibia (59.1%%) and Belize (57.7%%)

There are limitations to Gini Inequality Index data. Some countries only have limited data. For 88 countries, there were only 10 or fewer data points - these have been noted in the footnotes. Some decade averages are based on only a few values. Also, wealth that isn't linked with routine income goes unfactored. Other models of economic inequality should also be consulted when looking at a particular country; for example, the Palma Ratio is better at discerning differences at the high-end and low-end, and the Theil Index is good for analysing income distribution across socio-economic sub-groups.

2. Multidimensional Poverty

#capitalism #economics #inequality #poverty #social_development

Multidimensional Poverty (2018)24
Pos.		Lower is better Severity24
1	Armenia	.001
2	Ukraine	.001
3	Serbia	.001
4	Turkmenistan	.001
5	Jordan	.002
6	Kazakhstan	.002
7	Montenegro	.002
8	Trinidad & Tobago	.002
9	Maldives	.003
10	Albania	.003
11	Thailand	.003
12	Moldova	.004
13	Palestine	.004
14	Tunisia	.005
15	St Lucia	.007
16	Libya	.007
17	Algeria	.008
18	Kyrgyzstan	.008
19	Bosnia & Herzegovina	.008
20	Barbados	.009
q=101.

Multidimensional Poverty (2018)24
Pos.		Higher is worse Severity24
101	Niger	.590
100	S. Sudan	.580
99	Chad	.533
98	Burkina Faso	.519
97	Ethiopia	.489
96	Central African Rep.	.465
95	Mali	.457
94	Madagascar	.453
93	Mozambique	.411
92	Burundi	.403
91	Congo, DR	.389
90	Guinea-Bissau	.372
89	Benin	.368
88	Guinea	.336
87	Liberia	.320
86	Sierra Leone	.297
85	Nigeria	.291
84	Senegal	.288
83	Gambia	.286
82	Angola	.282
q=101.

The Multidimensional Poverty Index is the United Nation's presentation of data on a wide range of factors, in additional to basic income it also includes access to clean water, nutrition and housing. The index is a count of the percentage of the population that are deprived across multiple fields, adjusted by the intensity of the poverty₂₄. The countries at the bottom of this index are Armenia (.001), Ukraine (.001) and Serbia (.001)₂₄; portions of their populations are truly living horrifically impoverished lives.

3. Inequalities By Region

#capitalism #economics #health #human_development #inequality #life_expectancy #poverty #social_development

Here's the total regional results this shows average national results for all countries that fall within those regions.:

	Area	Income Inequality (Gini Coefficient) (2023) Lower is better %9	Multidimensional Poverty (2018) Lower is better Severity24	Inequality in Life Expectancy (2019) Lower is better25	Social & Moral Lower is better Avg Rank26
	Africa...	40.7%	.264	26.10	119.0
	Asia...	33.0%	.084	11.80	92.0
	Australasia	34.8%	.174	13.47	95.3
	Europe...	30.7%	.004	4.86	57.5
	North America	43.8%	.052	11.65	81.3
	South America	44.2%	.034	12.66	81.8
	The Middle East...	33.4%	.054	9.16	95.3
	World	36.5%	.154	14.59	89.7

The third and fourth columns show the impact that inequality is having on people's lives. The Social and Moral Development Index concentrates on moral issues and human rights, violence, public health, equality, tolerance, freedom and effectiveness in climate change mitigation and environmentalism, and on some technological issues. A country scores higher for achieving well in those areas, and for sustaining that achievement in the long term. Those countries towards the top of this index can truly said to be setting good examples and leading humankind onwards into a bright, humane, and free future. See: Which are the Best Countries in the World? The Social and Moral Development Index.

4. Tax Havens

#bahamas #bermuda #british_virgin_islands #cayman_islands #civilisation #crime #democracy #economics #globalism #governance #indonesia #inequality #internationalism #ireland #malta #mauritius #multinationals #netherlands #panama #tax #tax_evasion #tax_havens #USA

Civilisation relies upon taxation. Workforces are educated, nations are defended. The rule of law, which makes business possible, is secured through state apparatus. The roads on which logistics rely, the national infrastructure that supports electricity and food suppliers, the judicial system: it is all funded through tax. But not all people pay fair. Billionaires manage to pay just 0% and 0.5% of their wealth in tax, significantly less than all others₂₇. The United Nations say that 46% of the world's wealth is owned by the richest 1% of the population₄, and economists think somewhere between 10% and 50% of it all is held in tax havens_5,6, forcing the poor to pay a much higher proportion and causing true damage to democracies and developing countries alike.₇

Large multinationals excel at tax evasion by exploiting holes between tax jurisdictions₆, by making their accounting artificially complicated₂₈, and by hiding profits in low-tax countries (at a rate of $1 trillion per year)₂₉. Some of the most well-known corporate tax evaders include the tech giants Amazon, Apple, Facebook, Google, Microsoft and Netflix_28,30; Nike₅, and, the fashion and textile industry as a whole has produced a long and terrible legacy of using modern-day slave-labour₃₁ in low-tax special economic zones in places like Indonesia₃₂.₃₃

Tax havens can be found in Panama_5,34, the Netherlands_5,35, Malta₅, the Cayman Islands_5,34, Guernsey_34,36, Jersey_34,36, the British Virgin Islands_5,36, the USA's states of Delaware, Wyoming, Nevada and South Dakota plus Puerto Rico₃₄; the Isle of Man₃₄, Mauritius₅, Bermuda_5,34, the Bahamas₃₄, Ireland₃₇, Luxembourg₃₄, Macao₃₄, Singapore₃₄ and Switzerland₃₄. They support the same financial schemes that also allow organized criminals, drug lords, violent gangs and terrorist groups to launder money.

The complexity of taxes, and the international flows of money, mean that it has moved beyond the ability of any government to fix the problem of tax evasion on its own_38,39,40,6. Co-operation is the only possible way to collect tax from the reluctant wealthy, selfish corporations, and antisocial criminal gangs. Since the late 2010s, a multinational scheme saw banks in over 140 places begin to share banking information to catch tax cheats and "offshore tax evasion has declined by a factor of about three in less than 10 years"₄₁ but still, the rich and powerful manage to pay less than struggling citizens₄₁

For more, see:

• " Tax Evasion" by Vexen Crabtree (2021).

5. Instability and the Failure of States

#democracy #inequality

In "The Fate of the West" by Bill Emmott (2017)₄₂, the author describes historical examples where problems of inequality led to the failure of democracy. In giving advice on how to keep democracy healthy, his number-two point is equality of opportunity: exposing places where the rich have too much influence over politics, improving fairness of inheritance taxes to avoid oligarchy and permanent social division, government championing the unlucky and the vulnerable₂. If solutions are not found, 'popular anger will only grow louder and more destructive'₄₃.

“With typically high levels of inequality between rich and poor in developing countries, it is difficult for the rich to consider the deprived as equal citizens with themselves. They tend to shut themselves away in privately guarded enclaves, and they regard their peer group as the élites of the developed world, not their own countrymen. At the same time, they tend to be the strata from which the political leaderships of their countries are drawn, and, once elected, will most likely give priority to the needs of their own kind rather than to the poor. This explains the phenomenon of 'élite capture', whereby a political leadership can be replaced through the electoral process without much noticeable benefit for the mass of the population.”

"Democracy: A Beginner's Guide" by Beetham, David (2005)₁

“The inequality that has recently been seen in the West is important chiefly because it is corrosive of the sort of social and political glue that holds countries together. [...] The direct political consequences of rising inequality: unchecked, it can enable the wealthy to gain an unequal political voice, which can be used to create new privileges for themselves and to entrench their advantages. Chapter 2 showed that this entrenching of political inequality is precisely what has happened in many Western countries but especially in the US.”

"The Fate of the West" by Bill Emmott (2017)₄₄

“ Just as inequality begins at birth, defines the freedom and opportunities of children, adults and elders, and permeates those of the next generation, so, too, policies to prevent inequalities can follow the lifecycle. [...]

Parents´ incomes and circumstances affect their children´s health, education and incomes. [The] disparities in health across socioeconomic groups often start before birth and can accumulate at least up to adulthood, if not counteracted. Children born to low-income families are more prone to poor health and lower education. Those with lower education are less likely to earn as much as others, while children in poorer health are more likely to miss school. [...] The cycle can be difficult to break, not least because of the ways in which inequality in income and political power co-evolve.”

"Human Development Report" by United Nations (2019)₄₅

6. UK's Anti-Tax-Avoidance Antics at EU Level

#UK

“... that in the UK, the top 1 per cent have doubled their share of the national income: between 1990 and 2013-14 their share of income has risen from 5.7 per cent to 8.3 per cent.”

"Britain: Leading, Not Leaving: The Patriotic Case for Remaining in Europe" by Gordon Brown (2016)₄₆

The UK simultaneously has the most deprived communities in all of Europe - and it also has the wealthiest enclaves too. It's easy to see which of those two camps hold the power. The UK has maintained a long campaign against EU initiatives to close Tax Havens. Some of them are UK territories and UK Crown Dependencies, and large numbers of high-profile politicians and political financiers have their accounts held offshore. The Panama Papers revealed to the world the astounding scale of the tax-avoidance industry; too many politicians mouth-off about what's in the national interest in one hand, preach on the long-term gains of cutting public services, and yet, withhold billions in untaxed wealth. This hypocrisy causes the occasional outcry, but in general, the modern public has become accustomed to this kind of disgraceful behaviour, and carries on voting for the parties defending the status-quo.

Likewise, the UK was resistant to EU measures curbing extreme bonuses given to themselves by financial bosses, as part of the measures designed to encourage sensible banking in the aftermath of the financial crises of 2008-2009. The UK opposed these measures to the extent that the majority of the new rules were designed despite the UK, even though the UK was best-placed to create the required legislation. The UK lessened the impact on bankers and slowed the implementation of the new rules.

“The new pay rules are among the strictest in the world, and have inspired both imitation and debate elsewhere. MEPs, who hatched the idea, have since looked at applying it more broadly to fund managers. They were but one feature of a broader package of EU legislation intended to bring capital and liquidity requirements to international standards following the collapse of Lehman Brothers in 2008. The UK fought throughout the negotiations to ease the bonus cap, but ultimately found itself isolated amid broader support from not only the parliament but also other national capitals. [...] The bonus rules have been a source of frustration as a charge which applies to the City but which London has had little influence in shaping.”

Chaffin (2013)₄₇