Globalization and the Gap Between the Rich and the Poor Essay

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Pattern of Global Inequality and Globalization

The extreme inequality in distribution of global income is an issue that has attracted considerable concerns in the recent past and generated questions regarding the effectiveness of the current development model. Global inequality is a major issue for world's economies since it slows economic growth and creates social and health problems. Global inequality continues to occur despite recognition that it's a dysfunctional process with huge negative impacts on development and increased need to ensure equity is at the core of development agenda. Inequality across the globe has been highlighted by existing trends in commodity prices, employment, and government spending. Globalization has played a crucial role in increasing global inequality since it has widened the gap between the rich and the poor. Even though globalization focuses on more integration of countries across the globe, it contributes to global inequality by widening the gap between the rich and the poor.

Trends in Global Inequality

Global inequality is a phenomenon that goes beyond national borders and incorporates three major concepts. The first concept in this phenomenon is inequality between nations of the world that is calculated using GDPs or mean incomes derived from household surveys of every country in the world though without examining the population (Milanovic, 2013, p.198). The second concept in this phenomenon is the fact that people from poor countries are all equally short whereas those from rich countries are equally tall. This difference emerges from weighting the population of each country with regards to income averages rather than calculating the actual incomes of individuals.

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The third concept is an individual-based concept where individuals' actual incomes are calculated regardless of their nationality.

In the past few decades, distribution of income across the world has changed remarkably as evidenced in changes in people's economic positions after the Industrial Revolution. In the aftermath of the Industrial Revolution, the poorest continue to be poor whereas the middle class and the rich continue to be rich. One of the most interesting developments in the recent past with regards to global income distribution is that the top quartile i.e. 1-5% has gained significantly whereas the next 20% has experienced little gains or had stagnant actual incomes. As a result, the world has experienced polarization among the richest countries of world population while poor countries continue to suffer.

According to Peet (2009), political-economic inequality has characterized international trade by making it to become a tool of national power (p.42). This implies that one nation-state utilizes the entire system to subordinate countries that are weaker economically. As evidenced in recent trends, rich countries utilize international trade to exercise their powers over poor countries, which in turn hinder the development of poor countries and increased global inequality. For instance, international trade is used to make less developed nations dependent on developed ones through unequal trade. Therefore, the….....

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