Global Inequality

By Mike Koetting        July 21, 2017

This is the last of four posts on inequality, one of what I see as the top three problems facing society. In subsequent posts, I’ll turn to the issues of the environment and the meaning of work, my other two priority problems.
Several months ago, I saw the movie Lion, the story of a very poor Indian five-year old who gets separated from his older brother in a busy train station. He cannot find his way home, winds up in an orphanage and eventually is adopted by an Australian family. The movie ends when he is finally reunited with his birth family in his old village. It’s based on a true story and is a good movie on its own merits. But I was profoundly distracted trying to get my head my head around the scope and depth of the poverty. And the huge numbers of people involved. All I could ask myself was: “Is there any realistic posture beyond benignly ignoring the issue?”

I do not intend to use this post to belabor the scope of the issue. It’s soul-numbing.
GDP Per Capita Intnl
Source: See note.
Intrl Child Mortality
Source: See note.

The question I wish to address is how should we think about this issue. As the globe continues to shrink, ignoring it is increasingly more difficult. Epidemics that move from one country to the next are an obvious threat. Overfishing, overgrazing and deforestation in the rest of the world is a danger to all of us. Clearcut a million acres in Brazil and we lose a block or two of Miami beachfront.

But the most immediate portent is the immigrant crisis in Europe. Much of that is due to the specific dislocations from the Syrian civil war. But by no means all of it. Increasingly, people who in the past would have been willing to stay put and endure are pulling up stakes and taking a chance. They may not be looking at the above charts, but they are looking at internet and television and they see a life that is profoundly better than theirs—at least safer, more comfortable and with a greater range of opportunities for their children. We shouldn’t kid ourselves about the ubiquity of these images. With various “off-grid” technologies, the internet is penetrating into even the most remote villages of Africa.

One instinct is to build a wall. Obviously that resonates in parts of America and the rest of the developed world. It is probably fair to assume that making it more difficult to immigrate will slow the rate of immigration. But unlikely to stop it. It’s the logic of chance. If the reward is big enough, even very reduced chances offer positive outcomes. (Conversely, if the odds of even moderately bad outcomes are large enough, negative outcomes are almost guaranteed.) Immigration becomes like the water around your basement—it will find the cracks. The United States has found that when conditions become bad south of our border, people find a way in. Europe faces a bigger problem with the myriad ways people can get there. In China, the problem is how to keep people from the poor rural areas out of the thriving urban centers.

Beyond our instinct to erect barriers, the United States has also invested, meagerly and inconsistently, in trying to improve conditions in other parts of the world. The results have been uneven. There have been successes but it is hard to link major changes in living conditions to specific foreign aid investments. There was hope that where foreign aid wasn’t making enough difference, that globalization would help poor countries create a path to economic stability and progress, and with it the benefits of higher standards of living—decreased disease, lower birthrates, education of women, and so on. All of these would make people less likely to immigrate, less likely to join terrorist organizations and more likely to see the world as we do.

It hasn’t exactly worked out. There have been successes. There is no question that NAFTA lifted living standards in Mexico and that has done more than increased border surveillance to stem the tide of Mexican immigrants into the United States. (To the extent there is still a serious problem at our southern borders, it is more a function of the murderous dissolution of civil society in various Central American countries.)

On balance, however, it is hard to find the basis for declaring globalization an unqualified success at improving lives in other countries. Consequences good or bad seem to vary significantly by specific country. There have been successes and busts. If one could make any generalizations, it might be that globalization has generally increased average incomes in previously underdeveloped countries but has also raised the degree of inequality within countries. I don’t think globalization can be reversed, but it also doesn’t seem that without being steered by a different set of policies, it is going to materially address the imbalances among countries.

The question is whether these imbalances can persist without some adverse consequences. In a world where the magnitude of the differences is apparent to almost everyone, it is hard to see why people in the less developed world would simply consign themselves to their fates. Maybe many will. Maybe most. Bu, as the charts above show, there are huge differences among countries.

Geography offers America more protection from illegal immigrants than Europe enjoys, but it is still a very attractive target. America has completely missed that since 2000 illegal immigration from Asia has grown much faster than illegal immigration from Mexico and Central America. Although there are still many more illegal Mexican immigrants, the number has actually declined over the past several years, while illegal Asian immigration (primarily India, China and Korea) has grown by more than 200 percent.

Nor is direct immigration to America the only concern. Already the flood of immigrants into Europe there threatens to destabilize democracies that the United States depends on. Some of that may abate if the worst atrocities of the Syrian mayhem pass. But there is no reason to believe the Middle East will be a stable or healthy region at any time in the intermediate future. Africa appears equally, or more, unstable.

Nor is immigration the only threat. People might get murderously mad. We can see the chaos terrorism causes. What happens if terrorists get ahold of a nuclear weapon? The more that are in circulation, the greater the danger.

We don’t like to consider the issue of global inequality because it is so monstrously large. Most of us, certainly myself, don’t have any good way to think about it. But as a non-expert, it seems to me that imbalances this large are a clear threat to global equilibrium. If we continue to act in our daily lives as if these inequities are irrelevant to us, aren’t we courting something very bad?

From that perspective, Trump’s rallying cry of “America first”, especially when used as he means it, is not only offensive but potentially dangerous.

Note on Data—and a nifty website.
Most of the data in these charts is from Gapfinders ( ), a really terrific website recommended by my niece, Emily Janoch, who works for CARE. If this topic interests you at all, it’s worth spending a few minutes there. This is what they say about themselves:

Gapminder is an independent Swedish foundation with no political, religious or economic affiliations. Gapminder is a fact tank, not a think tank. Gapminder fights devastating misconceptions about global development. Gapminder produces free teaching resources making the world understandable based on reliable statistics. Gapminder promotes a fact-based worldview everyone can understand.

Most of their data comes from the World Bank. In the above graph on GDP/capita, I went directly to the World Bank for data on Sub-Saharan Africa. I couldn’t find infant mortality rates for that region as a whole, so I showed Zambia, which, by eye-ball, is pretty much in the middle of the Sub-Saharan range.

Author: mkbhhw

Mike Koetting’s career has been in health care policy and administration. But it has always been on the fringes of politics. His first job out of graduate school was conducting an evaluation of the Illinois Medicaid program for the Illinois Legislative Budget Office. In the following 40 years, he has been a health care provider, a researcher, a teacher, a regulator, a consultant and a payor. The biggest part of his career was 24 years as Vice President of Planning for the University of Chicago Medical Center. He retired from there in 2008, but in 2010 was asked to implement the ACA Medicaid expansion in Illinois, which kept him busy for another 5 years.

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