Global inequality is as urgent as climate change – Stiglitz

Given the escalating scale of inequality in the world, shouldn’t countries be banding together to set up an international panel on the issue, along the same lines as the Intergovernmental Panel on Climate Change (IPCC), the United Nations body set up to assess the science related to climate change? The idea of setting up an international panel on inequality has been recommended by the G20 Extraordinary Committee of Independent Experts on Global Inequality.

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The thinking behind the panel is set out in a report delivered to the G20 by the experts on the inequality committee. They argue that the proposed inequality panel would “support governments and multilateral agencies with authoritative assessments and analyses of inequality”. It wouldn’t make any recommendations for countries. Rather it would offer a menu of policies that could be used to address inequality. Panel leader and Nobel laureaute Joseph E. Stiglitz explains what’s behind the idea.

What are the report’s main findings on inequality?

Our report looked at the research on the state of inequality – and the conclusion should alarm us all. Wealth inequality is far worse than income inequality and has intensified in most countries over the last 40 years.

The global increase in income and wealth at the upper end of the scale is particularly worrying. The very richest people are amassing fortunes while ordinary people’s lives stagnate. For every dollar of wealth created since the year 2000, 41 cents have gone to the richest 1% of people, while just one cent has gone to the bottom 50%.

This wealth brings huge influence over economies and politics, threatening economic performance and the very foundations of democracy.

What does the report recommend the G20 countries do to deal with inequality?

Inequality is a choice. There are policies that can reduce it. These include more progressive taxation, debt relief, rewriting global trade rules and curbing monopolies.

Our committee found that there has been significant progress in tracking inequality’s scale, drivers and policy solutions. Nevertheless, policymakers still lack sufficient, dependable or accessible information on inequality.

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There is a great institutional need for strong inequality analysis.

In 1988, governments set up the Intergovernmental Panel on Climate Change (IPCC) to assess the data and provide rigorous analyses to help governments tackle the climate emergency. Today, we are in an inequality emergency and need a similar global effort.

That is why our primary recommendation is to establish an International Panel on Inequality.

Drawing from the report, what do you recommend South Africa should do to reduce inequality?

South Africa has shown extraordinary leadership in focusing its G20 presidency on solidarity, equality and sustainability. This report is testament to that. We hope that South Africa will continue to champion our recommendations, particularly the establishment of an International Panel on Inequality.

Our committee chose not to comment on specific policies in specific countries. But our report contains a menu of policies which can tackle inequality. These include national measures like stronger competition laws, pro-worker regulation, investing in public services, and more progressive tax and expenditure policies.

* Joseph E. Stiglitz is a Professor at Columbia Business School at Columbia University, and Imraan Valodia, Pro Vice-Chancellor and Climate, Sustainability and Inequality and Director at the Southern Centre for Inequality Studies at University of the Witwatersrand.

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