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

by Jason Hickel

Even as late as 1800, life expectancy in England was between thirty-two and thirty-four years – and a dismal fifteen for children born into working-class families. In France, it was between twenty-eight and thirty, and in Germany between twenty-five and thirty-one.

Men were forced to spend their lives in mines, stripping the mountains in search of gold. Up to a third of workers died every six months. Within two years of the Spanish invasion, some 125,000 people had been killed – half the island’s population. Most of the remaining inhabitants of Hispaniola were forced into slave labour on plantations. A few decades later, only a few hundred Arawaks remained alive.

Silver was one of the only European commodities that Eastern states actually wanted; without it, Europe would have suffered a crippling trade deficit, leaving it largely frozen out of the world economy.

in 1492 the Latin American region had a combined population of between 50 and 100 million.15 By the middle of the 1600s, however, the continent’s population had been slashed to 3.5 million.

sometimes intentionally, as in cases where infected blankets were distributed as ‘gifts’ to indigenous Americans.

Say whaaaat????

Up through the Middle Ages, the vast majority of people in Europe – at least outside the city states – wouldn’t have wanted to work for wages.

really?

It was these three forces – enclosure, mass displacement of peasants and the creation of a consumer market – that provided the internal conditions for the Industrial Revolution.

The goal of the enclosure movement was not just to displace people from their land, but – much more profoundly – to eradicate these cultural expectations.

Soros again? Or who was the criminal mastermind who spearheaded and managed the achievement of the GOAL to eradicate whichever cultural expectations? who created the strategy, who managed it's implementation all over europe, in different conflicting nations?

India, once self-sufficient and famous for its exports, was remade into ‘the greatest captive market in world history’.

Sss

The economic transformation was dramatic. Before the British arrived, India commanded 27 per cent of the world economy, according to economist Angus Maddison. By the time they left, India’s share had shrunk to just 3 per cent.

Defeated on the diplomatic front, Britain turned to drugs. Desperate to finance their growing trade deficit, they started selling opium – grown in colonial India – on China’s black market. And when Chinese authorities clamped down on this illicit trade, as any sovereign country has the right to do, the British retaliated with a military invasion.

ok...

But Britain and France refused to relent until China agreed to abolish restrictions on European access and hand large chunks of territory over to European control. The treaties that followed granted sweeping trade privileges to Europe but conceded nothing to China in return.

China’s share of the world economy dwindled from 35 per cent before the Opium Wars to an all-time low of just 7 per cent.

Ten million Congolese perished under Leopold’s brutal regime – roughly half the country’s population.

at exactly the same time as European powers were pulling out of Latin America, the US established the Monroe Doctrine of 1823. The US was concerned that European powers might try to recolonise Latin America, and the Monroe Doctrine stated that any such attempt would be regarded as aggression against the United States itself.

Roosevelt Corollary in 1904, which was used to justify military intervention against any Latin American country that refused to cooperate with US economic interests.54

While colonialism was an economic and humanitarian disaster for global South countries, it yielded tremendous windfall wealth for Europe and, later, the United States.

But this new wealth was not evenly distributed; it was captured almost entirely by a small yet powerful elite.

Ok....but most europeans who were not directly involved in colonialism are still much richer than southern countries. Does wealth trickle down after all?

The problem, people began to realise, had to do with the internal contradictions of capitalism itself.

Not any more with the bubble and bad/easy credit?

eventually wages get so low that workers cannot afford to buy the products they produce.

But was this the problem? or easy money, bad credit...

This is what happens when capitalism is left to its own devices: it generates such extreme inequality that the whole system simply seizes up.

Sorry, not seeing on what arguments are you basing this conclusion...

New Deal – a vast programme of government-funded projects,

Massive government spending had what Keynes called a ‘multiplier effect’: by transforming government money into workers’ wages, workers gain consumer power that creates new opportunities for private businesses that spring up where the cash is plentiful,

But then, the government is the driver and main player in the economy. Not companies; not capitalists. If this goes eventually south, is capitalism to blame?

Led initially by Nehru, Nasser, Nkrumah, President Tito of Yugoslavia and Indonesia’s first independent president, Sukarno, the NAM would come to include nearly every country of the global South and became a powerful force for peace, sovereignty, non-intervention, anti-racism and economic justice.

Three years later, they formed the G77 to advance their interests and vision at the United Nations,

he painted developmentalism as the first step on the road to communism,

Tall, dignified and Paris-educated, Mossadegh had risen to popularity in his country as a progressive politician.

most famously, he sought to renegotiate ownership of the country’s oil reserves, which at that point were controlled by the British-owned Anglo-Iranian Oil Company, now BP.

Guatemala was ruled from 1931 by Jorge Ubico, a military dictator who enjoyed the support of the US government in return for handing over to the American-owned United Fruit Company huge tracts of highly fertile land, much of it stolen from indigenous Mayan peasants.

At the time, fewer than 3 per cent of Guatemalans owned 70 per cent of the land.

some 450,000 acres of the earmarked land belonged to the United Fruit Company. Despite being offered full compensation, the company refused to cooperate.

cheap foreign imports,

Cheap imports from where? What foreign power could have provided cheap products produced in US or EU?. ok....read further.....cheap from EU or US because of subsidies?

In his place, Western governments installed the military officer Mobutu Sese Seko, one of the world’s most notorious dictators, who went on to command the country for nearly forty years with the support of aid from the US, France and Belgium,

Britain, Uganda’s former coloniser, was not pleased by this shift to the left, particularly when Obote’s government moved to partially nationalise some of the country’s major private corporations, including a number of well-known British banks.

Was any of these leaders able to bring wellbeing to the poor without nationalizing foreign companies? Not that the respose is justified, just that I could almost bet that when the money was finished, they wouldn't have been able to sustain the populist measures....

The legacy of strongman rule in Africa is largely a Western invention, not an indigenous proclivity. Western powers have thwarted countless attempts at real independence,

We should all be free to express our own desires in the market, he claimed; indeed, he regarded this as the very essence of democratic participation.

This version of freedom was to compete with the Keynesian idea of freedom, in which real freedom lay in freedom from want,

The point to take from this sordid story is that neoliberal economic policies were so obviously destructive to people’s lives that it was very difficult to get them implemented in a democratic government. In most cases, the only way to bring them in was through military dictatorship and a state terror programme that would quash resistance wherever it emerged. In order to aggressively deregulate the economy, you first have to aggressively regulate the political sphere. Total market freedom requires total political unfreedom, even to the extent of mass imprisonment and concentration camps.

According to standard Keynesian theory, when inflation rises, unemployment should decrease.51 But this time something strange was happening: unemployment was rising along with inflation. This dealt a serious blow to the credibility of Keynesian ideas,

In 1973, OPEC decided to drive up the price of oil. The price of consumer goods suddenly shot up too, because the energy required to produce and transport them was more expensive. And because production became more expensive, economic growth slowed down and unemployment began to rise. It was a perfect storm. The crisis of stagflation was the direct consequence of specific historical events. But the neoliberals rejected these explanations. Instead, they insisted that stagflation was a product of Keynesianism – the consequence of onerous taxes on the wealthy, too much economic regulation, labour unions that had become too powerful and wages that were too high.

US Federal Reserve, argued that the only way to put an end to inflation was to dramatically raise interest rates, clamping down on the supply of money in order to recuperate its value. During the Reagan administration, Volcker jacked up interest rates from the low single digits to as high as 20 per cent. This caused a massive recession, as it dramatically increased the costs of doing business. As businesses laid off workers, unemployment rates shot to over 10 per cent. This decimated the power of organised labour, which had been the crucial counterbalance to the excesses that had led to the Great Depression.

Developmentalism was not without its flaws. Rapid economic growth, industrialisation and ‘modernisation’ came with significant costs. In many cases it meant pushing peasant farmers off the land in order to make way for bigger, more ‘efficient’ operations.

Just like capitalists? Enclosure movement....

It meant drawing people into the labour force for the first time, making them dependent on wages

Just like early capitalism....come on, you criticized this vehemently in the begining...

And it had environmental costs, too, such as soil degradation from high-input farming, pollution from power stations and factories, and ecosystem disruption caused by industries like mining and forestry.

Just like deregulated corporations?

one that would be rooted in care, ecology and sustainability;

Yes...because other cultures sure don't have their ruthless cvasi-sociopaths who would step on dead bodies for personal gain. If it wasn't exaclty the case when those cultures were colonized, it surely must mean that they would have developed into paradisiac comunal societies if left completely to their own devices. Thousands of years of history sure scream out only love and sharing and equality. Not empires, looting and fighting for power...

one that would draw on rather than reject indigenous values; and one that would measure progress by more meaningful indicators than GDP.

Si marmota....

So they retaliated by unleashing the ‘oil weapon’.

Ok....didn't know this all leads back to the 6 day war.....

Loan pushers were trained to invent inflated projections of how beneficial the loans would be, manipulating statistics to convince governments to borrow even if they knew full well that they would never be able to repay.

Economic hitmen?

when US Federal Reserve Chairman Paul Volcker jacked interest rates up as high as 21 per cent.11 Poor countries found that they simply could not repay their loans at such high rates.

But now the G7 was going to use the IMF for a different purpose entirely: to force global South countries to stop government spending and use their money instead to repay loans to Western banks.