Equality for 21st century economic thinking

Nabil Ahmed FRSA argues that Covid-19 has exposed the extent to which we have neglected inequality as the defining characteristic of progress

As Martin Luther King Jr said: “The arc of the moral universe is long, but it bends toward justice.”  This quote, which President Obama often repeated and had woven into a rug in the Oval Office, is about progress and, as with all that MLK said, prompts reflection about our current condition. But, as the former US Attorney General, Eric Holder, reminded us, the world “only bends toward justice because people pull it towards justice.”

The underlying issue, about progress, is crucial to think about amid the heartbreak of today’s world. To what extent are we heading toward justice? A year on since the pandemic was declared, what has Covid-19 revealed about our collective condition?

At Oxfam we recently published a report, titled The Inequality Virus, which goes to the heart of this question and includes some shocking global data.

While it could take more than a decade for the world’s poorest people to recover from the pandemic, the world’s 10 richest people – all men, unsurprisingly – have seen their wealth soar by half a trillion dollars since the start of the pandemic. That is more than enough to pay for a vaccine for everyone on the planet, and to stop anybody from falling into poverty as a result of the pandemic.

Meanwhile, our survey of notable economists the world over shows that we risk facing the greatest rise in income inequality since records began.

That sounds awfully like backwards, not forwards. But the story runs deeper. For example, far more than a hundred million women would not be at risk of losing their jobs today, if men and women were equally represented in low-pay sectors hit hard by Covid-19. That is just one snapshot about today’s gender injustice.

Consider the racial injustice. For example, if you are an Afro-descendent in Brazil, you’re 40% more likely to die of Covid-19 than a White person. Or consider that at least 22,000 Black and Hispanic people in the US would still be alive today, if their Covid-19 mortality rates were just the same as their White counterparts. Such inequality is not new but still with us despite our ingenuity and progress.

We have walked on the surface of the moon (and put rovers on Mars), and developed supercomputers that fit into our pockets. We have created lifesaving cures – and vaccines – without which so many of us would not even be alive today.

And yet, despite this progress, centuries of sexism, racism and colonialism still profoundly shape the world in which we all breathe. Just how many people aren’t able to ever hold their loved ones again, because of the colour of their skin, or because they were born on the ‘poor side of town’?

Such inequality is not an accident but hardwired into the design of our economies. As Professor Darrick Hamilton, a pioneering US economist on inequality writes, "Racism, sexism and other -isms are not simply irrational prejudices but long-leveraged strategic mechanisms for exploitation and extraction that have benefited some at the expense of others".

As we plan the future of our economies, we must listen to the long-vocalised concerns of activists around the world about inequality, an issue that is increasingly being taken up by others. The UN Secretary-General Antonio Guterres has likened Covid-19 to “an X-ray, revealing fractures in the fragile skeleton of the societies we have built”. As he has said, inequality defines our time. Meanwhile, the head of the International Monetary Fund, Kristalina Georgieva, has recognized that “increased inequality lead[s] to economic and social upheaval” and Pope Francis calls inequality a “social disease”. And, in the UK, the Financial Times has called for radical reforms that would reverse “the prevailing policy direction of the last four decades”.

Such concern must now translate into bold, tried-and-tested structural policy action to tackle inequality. The good news is that some governments are showing positive action is possible. In recent years South Korea boosted its minimum wage, raised taxes on the richest and invested more in spending on health and education (and in fact instituted universal emergency relief payments for 22 million households as part of its Covid-19 response). Costa Rica was able to achieve near-universal quality primary healthcare in 10 years, while Argentina recently adopted a tax on its very wealthiest that could generate billions to beat the virus. New Zealand is, excitingly, focusing its budget on “wellbeing”, a great example of a framework that can help us move beyond an unhealthy obsession with gross domestic product (GDP).

As much as we need specific policies, we need to articulate with greater imagination a vision to make equality an economic mission for the 21^st century. Not as a tokenistic gesture but as the core to our conception of progress. That means achieving racial and gender equality, as a central economic mission. It means tackling today's extreme levels of economic inequality, in which a handful of billionaires own more than they could spend in a thousand lifetimes, while nearly half the world struggles to survive. And it means our living within planetary boundaries: moving beyond an unsustainable growth-model in which the emissions of the richest supercharge today's climate crisis.

That is the right thing to do, but also we are also all better off – whether you are a working-class boy in inner city Leeds, a woman garment worker in Lahore or a tech entrepreneur in Lagos – in a world that offers us all opportunity and security. But there is no doubt, tackling inequality requires more than an exclusive focus on tackling poverty. This is ultimately a political task that is likely to face opposition and, at heart, is about shifting the wealth and power of the 1% to everyone else. And yet a future that works for everyone surely depends upon it.

Covid-19 has made it clear that we were knocked off that course in years gone by. Let us now renew our commitment to pull it back towards justice.

Nabil Ahmed works to influence political and corporate actors to tackle inequalities and the climate crisis, and is Head of Executive Strategy and Communications at Oxfam International, based in Nairobi, Kenya.