Nhung Nguyen

Abstract

The paper argues that instead of trying to measure and decrease inequality in terms of income, wealth, and consumption, the world needs to change the aims to improve equality of choice and change for all. To do so, the paper explains how relative the measurement for inequality is.

The paper also suggests a new point of view which can be taken in the considerations of actions to achieve equality: Equality as freedom.

What is inequality and what is equality?

There is a well-known story in Vietnamese media regarding a father and a son who were stuck living in the jungle of the center of Vietnam for over 40 years because of the Vietnam War. Their family and relatives tried to pick them up from the forest to return them “back to normal human life” in August 2013. In the jungle, they had had no chances to enjoy the modern life: no electricity, no fresh water, and even no concrete shelter. However, relocated from the wildlife, they were given a health check; no serious diseases were found. At first, they did not want to go back to the village.

Comparing the father and son and the villagers’ living standard, we can see inequality as defined by modern researchers and decision makers. However, in the jungle, the father and son had also enjoyed their own happiness with enough reserved foods, nature, and freedom. For them, there is no way for their family members and the villagers to understand what they lost after being forced to modernize.

There is a potential debate over whether or not the decision for the two people to live in the jungle or in the village is a matter of inequality or equality. However, this debate has not been happening in their homeland.  It is likely that all people there assum that the modern life is better than the nature one.

Economic inequality, also called income inequality, wealth inequality, or the gap/gulf/contrast between rich and poor, refers to how economic metrics are distributed among individuals in a group, among groups in a population, or among countries (The Economists, 2013).

There are no concrete definitions for poor and rich. To find out the appropriate indicators for  rich, poor, and the gap between the two, economists generally think of three metrics of economic disparity: wealth (wealth inequality), income (income inequality), and consumption (The Economists, 2013). However, scholars generated these indicators based on so-called Western values under the point of view of an industrialized society.

In many other countries, wealth means having many children. Therefore, income is not as important as the lifestyle and happiness. A couple of examples of this outlook are the owners who do not want to expand their businesses or people who like the lifestyle of waking up in the morning, doing exercise in the park or near the lake, and drinking a cup of coffee rather than eating in the subway or spending two minutes for a breakfast. Furthermore, in many countries, consumption is not culture, but saving is.

Bhutan’s Gross National Happiness (GNH) can be seen as an example. of the debate of inequality and happiness. In addition, the International Labor Organization and the Asian Development Bank said that the labor productivity of Vietnam’s employees is lowest in Asia and equal to 1/15 of Singapore’s. However, according to News Economic Foundation (NEF), Vietnam is ranked the second amongst the happiest countries in the Happy Planet Index in 2012. Costa Rica ranks first (NEF, 2012, p.16). On the other hand, inequality has also been measured under the indicators of education, health care, and crime ratios. However, the thresholds of poverty, education, health care development, and crime ratios are also applied by the different norms of institutions. The norm of poverty under the Vietnamese government is different from the norm of the United Nation (MPI, 2015).

The way out of inequality

There is no “one size fits all” paradigm for all parts of society. Theoreticians and national leaders debate as to what is the best way to eliminate inequality. This leads to different methods of struggling with the phenomenon This paper presents four main common tactics, which are the social safety net, taxation, charity and philanthropy, and revolution, and discusses criticisms of each

+ The social safety net refers to a set of policies or services provided by the government, civil society, or institutions regarding welfare, unemployment allowances, universal healthcare, homeless shelters, and so on. In some countries, safety needs to include subsidized services such as public transport. The net is created in order to prevent individuals from falling into poverty beyond a certain level in the society. For example, the safety net programs emerged as the result of the United States President Lyndon B. Johnson’s War on Poverty in 1960s. These programs included Supplemental Nutrition Assistance Program (SNAP), medical aid, Head Start, and expanded social security. However, the debate of whether or not the net is useful for the development of the country seems to never end. The debate of Rep. Paul Ryan, chairman of the House Budget Committee, and Sarah Ayres Steinberg, Vice President, Global Philanthropy at JPMorgan Chase & Co., has proved that. This is rooted in the debate as to whether the US should support the middle class or the rich (Steinberg, S.A, 2014). In sum, the debate goes back to answer the question: who is going to pay for maintaining these nets?

+ Taxation: In many countries, according to Piketty, 10- 15% of the national income has been used for education and health care, and the share of tax in the national income may be 40-50% (p.333). The interconnection between taxation and safety net is obvious in many countries. The Nordic countries especially consider that tax is the main resource for safety net operation. In these countries, tax is one of the tools to “prevent people fall from falling into poverty far beyond a certain level in the society,” which can maintain relative equality among individual lives. However, it will go back to the debate of whether or not the safety net can create a poverty trap. In addition, the question of whether money gained from taxing those who are working is used to create a safety net for those who do not want to work is controversial. On the other hand, the questions of whether tax can be collected and used appropriately and who should have authority are controversial as well.

+ Charity and Philanthropy: There is no way to deny the positive results of charity and philanthropy and its means such as humanitarian aid, development aid, charity foundations, and philanthropy activities. Traditionally, humanitarian and development aid have helped millions of people to overcome hunger and poverty. Some new ways of aid, such as the Gates Foundation for example, also show the efforts to achieve equality among human beings. It helps hundred of thousand people out of poverty, starvation and diseases.  However, their works should be considered as the catalyst rather than the “Noah’s Ark” of inequality eradication. Noah’s Ark was used to rescue the human beings in the great flood. However, aids have never been the ark to rescue the human kinds out of inequality.

+ Revolution: Karl Marx said that there are two main social classes: the proletarians and bourgeoisie in capitalism. The former exploit the surplus value of the latter, resulting in the inequality in society. Denying all the tactics to fix this, Marx contended that the only way of reaching real happiness for civilians is through revolution. However, taking into consideration the history of socialism in the world, from the Soviet Union and East European block to China, Vietnam, Cuba, North Korea, and recently Venezuela, the revolutions in these countries have been significantly violent. In addition, inequality has not been eliminated where socialism has been adopted. In fact, to meet the basic needs of the people, some countries, claiming to be socialist, such as China and Vietnam, admit the existence of the market and try to regulate the market through state-orientation, and inequality is somehow increasing. Revolution, on the other hand, brings violence and inequality to its people.

Rethinking of Equality: Equality as freedom

Inequality should thus be considered in a broader view rather than from just economic angle. Furthermore, the issue of economic inequality can implicate notions of equity, equality of outcome, and equality of opportunity.

Michael Green (2015) in the presentation for TEDex said that income per capital is not relatively parallel to social progress. He presented the Social Progress Index with three main aspirations with respects to basic human needs, the foundation of well-being, and opportunity. With regards to opportunity, Green noted that there are various sub-categories, including personal rights, personal freedom and choice, tolerance and inclusion, and access to advanced education. Economic growth, hence, is neither an indicator for social progress nor equality. On the other hand, Sen (1999) also contends that development is freedom, including freedom of choice.

It thus seems to me that there is another way to grant equality: Equality as freedom. It is more rational for human beings to live by their own choice, to choose their own way of living rather than to be compared with others. It is not rational to compare an individual in Bhutan with another in the United States and to conclude that there is inequality between the two. An individual can free to choose to live under the “Western” poverty threshold if he or she wants to do that. This is the expression of equality: equality in opportunity and freedom of choice.

Conclusion

Lynch and Stephen Hawking (2015) stated that technology drives ever-increasing inequality, especially between the rich and the poor. Moreover, Oxfam (2013) indicates how extreme wealth and unequal income distribution hurt all humankind.  However, the re-distribution of income by revolution as argued for by Marx and his successors does not work. Human beings also cannot hold on to universal definitions and indicators for equality and inequality. This results in the challenges of eliminating inequality and achieving equality. However, there are needs for all: the equality of choice and opportunity. All people need equal opportunities and the freedom to choose their own way of life following their own immediate interests as stated by Friedman (1962, p.165). In addition, one way to achieve this is that people need to stop applying the norm, interest and belief of individual or groups to other ones, especially the notion of inequality.

Coming back to the story of the father and son, who had lived for over 40 years in the jungle, I argue that each individual has their own interest, norm and belief. The people who prefer to live in the jungle also need to be respected as equal as the people love to live in a megacity. Therefore, it is absolutely not rational to look at people’s inner-values under “modern thinking of inequality”.

Inequality is not universal.

Reference

Friedman, M. (1962). Capitalism and Freedom. The University of Chicago Press, United States

Green, M. (2015). How can we make the world a better place in 2030? Retrieved November 28, 2015, from https://www.globalcitizen.org/en/content/how-we-can-make-the-world-a-better-place-by-2030-2/

Lynch, C. (2015). Stephen Hawking on the Future of Capitalism and Inequality. CounterPunch, New York City

Measuring inequality: A three-headed hydra (2014, July 26). The Economist, retrieved November 28, 2015, from http://www.economist.com/blogs/freeexchange/2014/07/measuring-inequality

Ministry of Planning and Investment (MPI) (2015). Country report achieving the Vietnam Millennium Development Goals 2015. Retrieved September 22, 2015 from http://www.vn.undp.org/content/vietnam/en/home/library/

News Economic Foundation (NEF). Happy Planet Index 2012. Retrieved November 27, 2015, from http://b.3cdn.net/nefoundation/d8879619b64bae461f_opm6ixqee.pdf

Nguyen, T. (2015, November 27). Năng suất lao động của 15 người Việt bằng 1 người Singapore (The productivity of 15 Vietnamese equal to a Singaporean). Dong Thap Television, retrieved November 27, 2015, from http://thdt.vn/xem-truoc-khi-in/2691/index.html

OXFAM (2013). The Cost of Inequality. Oxfam Media Briefing

Piketty, T. (2014). A Social State forthe Twenty-First Century. In The Capital of the twenty-first century. The Belknap Press of Harvard University Press.(pp 330-344)