...From North-South Gap to the Abyss of Gluttony

The end of 2006 is nearly upon us, and as many have been and will be receiving their yearly bounty in the coming weeks, now is a good time to reflect on just how fat we have grown. In a world in which everything has been, or is increasingly, commodified— that is, transmogrified into an asset that can be bought and sold—global economic inequalities illustrate the contours of international politics, and for us to know what is possible and what is not, a first step is measuring wealth. To begin with, it is vital to see through the veils of the celebratory rhetoric of economic globalization that has ever clad the cult of capitalism and to spotlight how wealth differentials have been greatly exacerbated by economic globalization. The field of political economy is premised on apprehending the world through the nexus of wealth and political power, and in turning its analytic gaze to the global situation it has emphasized the divide between the wealthy industrialized countries (the US, Western Europe, Canada, Japan, Australia) and poor states (most of Africa, Asia, and Latin America, parts of Eastern Europe). This is usually referred to as “the North-South gap.” This framing is an important innovation intellectually and politically—especially as powerful ideas can transform political outcomes. For instance, the notion of “sustainable development” re-conceptualizes and seemingly reconciles environmental and economic agendas. However, in some important ways this existing presentation of the divide between rich and power has become a misnomer. “The North-South gap” has been overtaken by an “the abyss of gluttony.”

Historically there has always been a wealthier sector of society, but the current distribution of global wealth favors the rich at unprecedented levels. Data from development reports points out that the gap took root in the mid to late 19th century and experienced tremendous growth in the post-World War II period.

Although in terms of global wealth differentials, nothing compares with the boom of economic globalization in the 1990s.

By the late 1990s the cumulative effects of differences in income and development culminate in the most severe skewing in the distribution of overall global wealth ever seen. Several reference points illustrate the tremendous extent of uneven development: global gross domestic product measures total economic output; world export markets show who is benefiting most from exports and globalization generally; foreign direct investment establishes who is investing abroad; and phone usage is a basic indicator of development.

The data is compelling, but it becomes more poignant with the recollection that the “North” is substantially smaller than the “South” in population—for example, in 2000, North America contained only 6% of the world’s adult population, but received 34% of global household wealth. This is further demonstrated by the average per capita income of each country of the period (i.e., total wealth produced divided by the number of people):

These portraits demonstrate economic inequality between states but it does not illuminate the extent and depth of global inequality—that is, inequality between individuals on a global scale. In other words, as the division between North and South widens and wealth becomes even more narrowly concentrated, the richest 20% versus the poorest 20% may be misleading. In fact while the mid 1990s were good for global economic growth in which many experienced a rise in their standard of living, a review of wealth distribution in 2000 shows that the prior decade had been insanely kind to a select few.

These statistics take us further, but to make it more concrete, consider what it takes to fit into these categories.

Half a million dollars is beyond comprehension for the vast majority of the world, but is not uncommon in the US, Europe, and the high-income Pacific countries—in fact 37 million individuals worldwide fall into this category. Nevertheless, even among the wealthy, the 1990s achieved absurd degrees of concentration. From 1994 to 1998 the world’s richest 200 people doubled their wealth. By the end of the decade, the top three wealthiest individuals had more in assets than the poorest 600 million.

The parallels between increases in economic globalization and surges in global wealth are inequalities that should not be ignored. Since the 19th century there has been only one major bottleneck to increases in world trade and international finance: war. In the lead up to and during both World War I and World War II, economic globalization was derailed. With the terrorist attacks of September 11, 2001 and US invasions in Afghanistan and Iraq, in many ways the world is again at war. But has this slowed economic globalization or global wealth inequality?

A resounding “no.” Indeed, it is becoming much worse. To capture the political economy of 2006, we need to look beyond the typology of richest 20% and poorest 20%. Instead, we should focus on the richest 10% of the world who receive 54% of global income versus poorest 40% that receive a mere 5% of global income. It is this latter group, 2.5 billion individuals who live on less than $2 a day, that comprise the bulk of the world’s population. Basic living conditions are a nightmare for this mass of humanity; 800 million suffer hunger and malnutrition, 1.1 billion lack clean water, and 1,200 children die every hour from preventable diseases.

While there will be no great global reckoning in the disparities between the rich and the poor in the immediate or even the foreseeable future, it is obvious that the current course can not be sustained indefinitely. For the most part, the assistance of economically advanced countries to poor ones has been token—overseas development assistance from the North to the South is a fraction of what is sent in the other direction in the form of debt payments—and, in effect, offers only false hope for catching up. Such dynamics are preposterous premises for promoting widely shared economic growth; more likely they inflame key political resentments that inform contemporary politics.

In the wake of 9/11 and Iraq our attentions in international politics are drawn toward cultural differences—the “Clash of Civilizations” being a prominent narrative—but we should not be distracted from the fact that economic inequality may be the major culprit in provoking war. Too bad for poor people, but poverty doesn’t sell as an issue as compared with ancient blood-feuds. As result, every year there are whole libraries of reports filed on the burgeoning North-South gap but they have produced little more than abstract hand-wringing as typified by Sally Struthers advertisements, Bono having his photo taken, or Madonna solving the orphan problem of Africa by turning them into spoiled Americans one by one. As an analytic tool the “North-South gap” has failed; failed to put the pieces together, failed to stir us to act politically to end profoundly provocative levels of inequality. That’s where the “abyss of gluttony” comes in; this framing emphasizes three truisms of our age: 

First, the divide between rich and poor is not just between North and South, but between individuals, some of whom are in close proximity. The staggering disparities between presidents and peasants in Guatemala are dramatic, but it is also commonplace in the juxtaposition of banker and bag-lady in New York City. The abyss is not about geographic locations as much as it is about people.

Second, the divide between rich and poor is not simply unsightly; it is far too wide to be straddled. This differential is not a gap fed by occasional shortfall but a massive structurally reproduced and growing breach engineered by the rich. Gaps can be transcended, an abyss is hard to fathom, let alone cross.

Third, the divide between rich and poor is the defining issue of contemporary international politics. The political stakes of global economic inequality have and will determine prospects for war and peace in the 21st century. Grievances based on economic inequality will be main driver; if the world is to experience greater development in a political, social, cultural, and health sense, there must be progress on economic development that includes a more equitable sharing of wealth.

The countries of the North have always pushed Christ and capitalism on less economically developed societies, and while the North’s practices of both have been riddled with hypocrisy, it is the latter that has been materially more meaningful. The rich preach to the poor about the need to sacrifice for capital investment and long-term growth but we, the citizens of the US, would never sacrifice at this level. The US is among the wealthiest countries, if not the outright wealthiest country, in the world, but it is not clear how long it will remain so. Despite its enormous economy (about $12 trillion in 2006) and built up wealth, fundamentally it is only maintained through debt and force. The US current account is negative $850 billion this year—meaning US consumers imported that much more capital and goods than they exported. The US does not pay its bills through tax receipts anymore, but through Japanese, Chinese, and Saudi purchases of US bonds. At the same time, the US is engaged in a hugely expensive war in Iraq and Afghanistan, and in Israel (if one considers the sponsoring of that military proxy) that depletes the treasury. While capital hemorrhages out of US coffers, there is no call to stop our overspending, to accept financial burdens and raise taxes, or to cull our habits of hyper-consumption. On the contrary, at this time of year we are instructed to spend our way to a happy holiday.

In sum, the US has amassed incomparable wealth but it chooses to spend it in the most obscene and distracting ways. The resentments of the poor are based not only on that they do not live as well as the rich, but that the rich live lives that intentionally blind them to the plight of the less advantaged. Economic globalization and industriousness of wealthy individuals are praised as miracles, while those who have known nothing but debt are viciously berated or deemed hopeless. Thus the abyss of gluttony is more than the material divide between rich and poor sectors of society, it is also the paralyzing myopia brought on in the pursuit of pleasure. In a time of presents and feasts, it is most appropriate that we acknowledge how fortunate we are. Let us not smugly congratulate ourselves for our knowledgable narrative of another’s misfortune, but instead recognize our own role in global injustices. The conversation on global poverty is long overdue, do not let that neglect spill over into how we will talk about and remember it in the future. Yes, “the North-South gap” tells us that there are poor people, but it is “the abyss of gluttony” that reminds us that these are connected phenomena—that the rich have built their worlds of comfort on the agonies of the poor.

Merry North-South Gap 2006 & Happy New Abyss of Gluttony 2007.

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