The Divide: A Brief Guide to Global Inequality and its Solutions

by Jason Hickel

their fortunes changed dramatically over the intervening centuries – not in spite of one another but because of one another – as Western powers roped the rest of the world into a single international economic system.

the question becomes less about the traits of rich countries and poor countries – although that is, of course, part of it – and more about the relationship between them. The divide between rich countries and poor countries isn’t natural or inevitable. It has been created.

At one of the most frightening times in our history, with inequality at record extremes, demagogues rising and our planet’s climate beginning to wreak revenge on industrial civilisation, we are more in need of hope than ever.

It is only by understanding why the world is the way it is – by examining root causes – that we will be able to arrive at real, effective solutions and imagine our way into the future.

The arc of history bends towards justice, Martin Luther King Jr once said.

Anthropologists tell us that when the structure of a core myth begins to change, everything else about society changes around it, and fresh new possibilities open up that weren’t even thinkable before. When myths fall apart, revolutions happen.

to imagine a greater symbol of failure than rising hunger, especially given that we already produce more than enough food each year to feed all 7 billion of the world’s people, with plenty left over for another 3 billion.

In early 2014, Oxfam reported that the richest eighty-five people had come to accumulate more wealth than the poorest 50 per cent of the world’s population, or 3.6 billion people.

And in early 2017, as the World Economic Forum met in Davos, Oxfam announced that the richest eight people had as much wealth as the poorest 3.6 billion.

So if rich countries are rich, it’s down to their own talent and hard work. If poor countries are poor, they have no one to blame but themselves. This approach encourages us to think with a kind of ‘methodological nationalism’ – to analyse the fate of each nation without ever looking beyond its borders.

the United States had been violently intervening in Latin American countries since the 19th century in order to secure access to the continent’s raw materials. Indeed, the US military was invading and occupying states like Honduras and Cuba even as late as the 1920s and 1930s – during Truman’s own career – at the behest of American banana and sugar companies.

Europe’s Industrial Revolution was only possible because of the resources they extracted from their colonies. The gold and silver they siphoned out of the mountains of Latin America not only provided capital for industrial investment; it also allowed them to buy land-intensive goods from the East, which freed them to transfer their own labour power from agriculture to industry. Later, they came to rely on sugar and cotton – produced by enslaved Africans – that was shipped in from their colonies in the New World, grain from colonial India and natural resources from colonial Africa, all of which provided the energy and raw materials they needed to secure their industrial dominance. Europe’s development couldn’t have happened without colonial loot.

The plunder of Latin America left 70 million indigenous people dead in its wake. In India, 30 million died of famine under British rule.

mass poverty became an issue for the first time in history, as European capitalism – driven by the imperatives of growth and profit – prised people off their land and destroyed their capacity for self-sufficient subsistence.

underdevelopment in the global South was not a natural condition, but a consequence of the way Western powers had organised the world system over hundreds of years.

It is now widely acknowledged by scholars that structural adjustment was one of the greatest single causes of poverty in the global South, after colonialism. But it proved to be enormously beneficial to the economies of the North.

poverty doesn’t just exist. It is created.

Together with grand claims about global poverty reduction and the assumption of methodological nationalism, the growing size of the aid budget sits right at the centre of the official development story.

Not only are rich countries not responsible for causing underdevelopment in poor countries, as Rostow once insisted; they are in fact reaching out across the divide with loving concern. Sachs’ ideas gave life to the aid narrative for a new generation and were celebrated by the governments of most of the world’s rich countries; indeed, many increased their foreign aid disbursements accordingly.

The aid narrative was useful because it overrode any suggestion that Western powers were in any way responsible for causing the suffering of the South.

The US and Britain had just invaded Iraq, at least in part in order to secure access to the region’s vast oil reserves, and the Bush administration had just helped topple the progressive government of Jean-Bertrand Aristide in Haiti and tacitly supported a coup attempt against Venezuela’s Hugo Chávez, continuing the lon...

It was a matter of perception...

They found that in 2012, the last year of recorded data, developing countries received a little over $2 trillion, including all aid, investment and income from abroad. But more than twice that amount, some $5 trillion, flowed out of them in the same year.

In other words, developing countries ‘sent’ $3 trillion more to the rest of the world than they received.

Foreign investors take nearly $500 billion in profits out of developing countries each year, most of which goes back to rich countries.

trade agreements often prevent poor countries from protecting their workers in ways that rich countries

because multinational corporations now have the ability to scour the planet in search of the cheapest labour and goods, poor countries are forced to compete to drive costs down.

This is not an argument against aid as such. Rather, it is to say that the discourse of aid distracts us from seeing the broader picture. It hides the patterns of extraction that are actively causing the impoverishment of the global South today and actively impeding meaningful development. The charity paradigm obscures the real issues at stake: it makes it seem as though the West is ‘developing’ the global South, when in reality the opposite is true.

Rich countries aren’t developing poor countries; poor countries are effectively developing rich countries – and they have been since the late 15th century.

aid serves as a kind of propaganda that makes the takers seem like givers, and conceals how the global economy actually works.

will not accept aid for the underdeveloped countries as ‘charity’. Such aid must be considered the final stage of a dual consciousness – the consciousness of the colonised that it is their due, and the consciousness of the capitalist powers that effectively they must pay up.

The aid paradigm allows rich countries and individuals to pretend to fix with one hand what they destroy with the other, dispensing small bandages at the same time as they inflict deep injuries, and claiming the moral high ground for doing so.

Poor countries don’t need our aid; they need us to stop impoverishing them.

Until we target the structural drivers of global poverty – the underlying architecture of wealth extraction and accumulation – development efforts will continue to fail, decade after decade. We will continue to watch the poverty numbers rise, and the divide between rich and poor countries will continue to grow. This is a difficult truth to swallow for the millions of well-meaning people who have been sold on the development story. It can be scary to grapple with the collapse of a core myth. At least it was for me. But it also opens up a world of exciting new possibilities, and clears the way to a different kind of future.

‘The morally relevant comparison of existing poverty,’ he says, ‘is not with historical benchmarks but with present possibilities: How much of this poverty is really unavoidable today?

1 billion people live in absolute poverty today.

become so bad that in 2000, Americans earned nine times more than Latin Americans, twenty-one times more than those in the Middle East/North Africa, fifty-two times more than sub-Saharan Africans and a mind-popping seventy-three times more than South Asians.

Right now, the main strategy for eliminating poverty is to increase global GDP growth. The idea is that the yields of growth will gradually trickle down to improve the lives of the world’s poorest people. But all the data we have shows quite clearly that GDP growth doesn’t really benefit the poor.

the yields of growth are very unevenly distributed.

The poorest 60 per cent of humanity receive only 5 per cent of all new income generated by global growth.

The other 95 per cent of the new income goes to the richest 40...

truth: if we want to have any hope of eradicating poverty without destroying our ability to inhabit this planet, we will need to adopt a completely different economic model – one that provides for a much fairer and more rational distribution of our wealth. Our future depends on it.

* I began this chapter by pointing out that the good-news narrative is so important to the world’s most powerful governments because it justifies the present economic order and maintains people’s consent for it.

casual listener might have inferred that the US government, and the rest of the Western world, had suddenly discovered poor countries for the first time, as if by accident, having stumbled upon them in some remote corner of the world. If we accept the dominant narrative, we might be forgiven for believing that poor countries have always been poor, and that the gap between rich and poor countries has always existed.

But if we rewind to about 1500, a very different story emerges. At that time, there was little difference between Europe and the rest of the world when it came to the living standards of ordinary people.

But archaeological records show that people in the forager-farmer communities that lived outside these early states were a good deal better off, with life expectancies around 50 per cent longer.1 They were healthier, stronger, taller and better nourished than their more ‘civilised’ counterparts in South America – and, indeed, in Europe.

Adam Smith, the father of modern economics, called this ‘previous accumulation’ – the initial process of amassing capital that is necessary for capitalism to get going, and without which capitalism cannot exist. Karl Marx called it ‘primitive accumulation’, perhaps to highlight its barbaric nature, for the process of accumulation was violent: ‘The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalled the rosy dawn of the era of capitalist production.24 These idyllic proceedings are the chief momenta of primitive accumulation.’ Colonial extraction, according to this view, was the driver of accumulation, and accumulation is what made capitalism possible.

We tend to assume that the emergence of capitalism was a natural and inevitable process – as though its basic logic has always existed in human society and gradually matured into the Industrial Revolution. But the historical evidence suggests a very different story. The emergence of capitalism required violence and mass impoverishment, both at home and abroad – a process that left vast swathes of people dispossessed (in the case of English peasants) or enslaved (in the case of Africans and indigenous Americans).

improvement began to assume the status of a religious creed, and its economic principles took on a kind of moral meaning.

In the 1800s, the young United States systematised this land grab by forcibly dispossessing native inhabitants, beginning with the Indian Removal Act of 1830. At the time there were some 120,000 Native Americans living east of the Mississippi River. By 1944, only 30,000 remained; many had been killed, but most had been forced by the US government to move westward. Some 15,000 people perished along the way, on the Trail of Tears.