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Inequity

  • /
  • Textbook/
  • Chapter 3: Macroeconomics/
  • Economics real world examples and extension material /
  • Inequity

The view of an Economist

text

Dambisa Moyo - Background

Zambian born economist, Dambias Moyo started out with an undergraduate degree in Chemistry, and went on to do an MBA at the American University in Washington DC, an MPA at Harvard University and a DPhil in Economics at Oxford University. She is on the board of directors for the Chevron Corporation and the 3M Company. She has also worked for the World Bank and Goldman Sachs.

Dambias Moyo is a high-profile economist who regularly features on business news channels, TedX lectures and even major television shows such as Real Time with Bill Maher. She has written a number of best-selling books in Economics and the Political Economy. Her most recent book, Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth – and How to Fix It (2018) spent some time in the New York Times bestseller list.

Edge of Chaos

One of the central themes of Edge of Chaos is how population growth, rising income inequality, commodity scarcity and technological development are undermining economic welfare and social cohesion in many countries in the world. Moyo believes a growing underclass of people in the world economy is stuck in low paid employment, poverty and have little political representation. She believes this underclass is a risk to economic, political and social stability in countries across the world.

Moyo believes the solution to these problems lies in developing a more long-term strategic approach to economic and political decision making where the private sector and government sector work in partnership to manage and fund long-term solutions to issues such as low labour productivity, static incomes and inequity.

Two interesting areas of focus in Edge of Chaos are, firstly, the need to reward a nation’s politicians more highly and then make them more accountable for their decisions. The hope is that this will make them take a more long-term view in their decision making. Secondly, Moyo believes that moving more resources globally towards education would be the single most important policy to solving the problems facing the world's poor.

Some points for discussion

a. Explain some of the causes of rising global inequality and inequity.

Possible points to consider:

  • Inequality is about the unequal distribution of income amongst the world's population and inequity is about unequal life opportunities for the world's people.
  • Unequal distribution of resources to produce goods and services.
  • Lack of access to necessity services such as health and education.
  • Unequal distribution of political and economic power.
  • High-income groups/individuals can maintain their situation because of their financial power.
  • Political and economic instability in the world's poorest countries.
  • Environmental constraints in the world's poorest countries.

b. To what extent does rising global inequality and inequity leads to social and economic problems?

Possible points to consider:

  • Political instability within countries and sometimes in the whole country.
  • High levels of absolute and relative poverty.
  • Poor levels of health and education in the poorest countries.
  • Rising levels of household debt as individuals strive for better lives.
  • The tension between groups and individuals and groups within countries.

c. To what extent is Dambisa Moyo right to focus on education as the main solution to the problems she has identified in her book Edge of Chaos?

Possible points to consider:

  • Education can lead to better paying and skilled employment for individuals.
  • Education can give lower-income groups access to political power and influence.
  • Education can facilitate people making better life choices in areas such as employment and health.
  • Education can give people the ability to participate in the political process to empower their influence in society.
  • However, other factors might also be possible solutions to inequity and inequality issues such as business investment, healthcare provision and tax policy.