What is inequality

1. What is inequality

Inequality has seen a revival of interest in public debate and social science research alike. Behind this term are both measurable allocations of resources and concrete human experiences of marginalisation, oppression and disrespect. It offers a fruitful topic for learning, as much as it is prone to misunderstandings and conflict. This text starts with some clarifications before diving deeper into the (socio-)economics of inequality.

1.1 Defining inequality

First of all, inequality should not be confused with difference or diversity, and likewise equality does not imply uniformity or sameness. Evidently, all humans are equal, sharing the same biological needs, from birth to death. And at the same time on some level all humans are unique and therefore different. If humans are equal and unique, what does inequality actually refer to? Starting from a handbook definition, we learn that “Inequality is said to exist when there is a difference in the distribution of a resource (such as income) or outcome (such as mortality or educational achievement) across groups of people or places (for example, by socioeconomic group or by gender).(7)” Inequality therefore describes a social phenomenon, not a natural characteristic.

1.2 Diverse (socio-)economic approaches to inequality 

In the field of economics, inequality is primarily approached from a monetary perspective, but with considerable differences between the theoretical approaches. The neoclassical approach is based on an individualistic worldview in which individual income is the result of the productivity of a worker or owner of capital, i.e. what s/he adds to the produced market value (8). Various schools of heterodox economics have criticised this approach and have brought attention to the importance of structural power on labour markets and the role of government in macroeconomic distribution (Keynesian). Marxist economists have argued that workers are in fact not remunerated according to their contribution but are generating a surplus value absorbed by the owners of capital. Feminist economists have stressed the gendered separation of unpaid reproductive work and paid “productive work”, perpetuating economic inequality between genders until today. Ecological economists have emphasised how productivity growth actually results from the unpaid appropriation of fossil energy and natural resources and how parts of wealth building rests on systematic cost-shifting to other places or future generations. (9)

While economic approaches focus primarily on income and wealth, socioeconomic approaches are interested in a broader societal understanding of inequality. They shed light on the relationship of monetary inequality with socio-cultural, ecological and political inequalities. Göran Therborn (2013) offers a helpful distinction between three forms of inequality:

(1) Resource inequality, especially monetary inequalities, but also carbon inequality

(2) Vital inequalities, inequalities in health status, especially differences in life expectancy.

(3) Existential equality, based on equality of opportunity and participation in a comprehensive sense, i.e. the absence of discrimination, stigmatisation and oppression such as racism, sexism, casteism or slavery.

The following quote summarises a socioeconomic perspective on inequality. “Inequality, then, is not just about the size of wallets. It is a socio-cultural order, which (for most of us) reduces our capabilities to function as human beings, our health, our self-respect, our sense of self, as well as our resources to act and participate in this world. (10)” This perspective links inequality to the issue of poverty – some human beings are deprived of their capabilities as a result of an unequal social order.