History and presence of global inequality

History and presence of global inequality

Global income and wealth inequality between individuals have two components: inequality between countries and regions (for example income differences between Indians and Germans) and inequality within countries (for example differences between rich and poor Italians) (11). Around the year 1500 the major world regions of China, India and Europe were actually equal in terms of their per capita material production.

With the rise of colonialism, the “Great Divergence” (12) between these world regions began to unfold and has set the path for centuries of growing global inequality, from colonialism to imperialism to the current divide of the Global North and a Global South (13). Since formal decolonisation, several development agendas have tried to decrease global inequality. And indeed the income inequality between countries started to decline in 1980 – however, as it had been growing continuously between 1820 and 1980, it is now only as low as it was in 1900.

Inequality between countries still accounts for up to 80% of global inequality (depending on source) – i.e. the global birthplace explains a more significant part than the class differences within a society (14). Furthermore, inequality within countries is at a historic high today. In total, global inequality rose between 1820 and 1910, and stabilised at a high level since then. (15)

Looking at the last decades and wealth shows a similar picture – most of the growing wealth went to the wealthiest. Since 1995 the poorest half of the population together only captured 2% of the global wealth growth, while the richest 1% captured 38% of the total wealth growth. (16)

In 2021 the poorest half of the global population owns only 2% of the total wealth – meaning on average €2,900 per person. In contrast, the richest 10% of the global population own 76% of all wealth, per person on average €550,900. The richest 1% alone owns 38% of all wealth.