How do you know it’s inequality when you see it?
There are so many definitions of inequality but I think it boils down to two different individuals having two different opportunity sets in life. This opportunity is of course a function of income, but it’s also a function of human capabilities – and we've learnt that this relates to the neighborhood you’re born into, and the networks of cultural capital you have. So it’s obviously very complicated, but what it boils down to is having different opportunity sets in life.
Have levels of inequality gone too far?
Undoubtedly. And for me the tipping point is when inequalities translate into increasing returns to power. Because then those who, in effect, benefit from inequality are now in a position to invest resources and mobilise institutions to reproduce inequality and then it really sucks in and becomes solidified and becomes that much more difficult to confront. And that’s a global phenomenon.
What types of policies should be directed at attacking inequality?
I think you need a combination of policies that level the political playing field. So, it gives those at the bottom of the distribution to be politically effective. But on the other hand, that invariably is tied to more conventional policies of redistribution and expanding opportunities. So, I do think that in the global economy today, classic redistributive policies are really difficult because of the mobility of capital globally and the difficulty states have in taxing capital. It means that other policies such as equalizing access to basic services, which don’t necessarily cost as much, but that require a lot of political will, may get more traction.
And when you look at this important difference between building human capabilities and capital accumulation in development, there are two policy dimensions. There is of course the straight trade off dimension, that is sometimes a zero sum equation: if you extract resources from the economy and you direct them towards certain activities that enhance human capability, you undermine growth. So you have to be sensitive, because you don't want to kill growth.
But on the other hand, there's sometimes a positive sum logic. Some social investment can actually enhance growth, so I think the key is trying to figure out which are the positive sum social investments, and avoiding the zero sum investments. There are some fairly 'no brainer' positives ones: like education, better urban infrastructure, because a competitive city grows more successfully. But there are some policies that can be counter productive to growth, and zero sum.
Should there be a distinction between growth and development
in order to achieve sustainability?
Yeah absolutely. I don't think growth is development at all. Growth is a possible means to development but one of many and I'm with Amartya Sen on this. Development is about expanding freedom, expanding people's ability to live the life they value, and obviously having a decent income, which is a function of growth and can be helpful, but we know a lot of cases where even in the absence of significant growth there's been a significant expansion of capabilities. So we shouldn't fetishize growth. And insofar as growth can actually undermine sustainability, it can be a problem in and of itself.
Does sustainable development have any bearing on socio-economic inequality?
Definitely. Because our resources become more scarce in the absence of sustainable development, which further exacerbates inequality. Why? Because those who are in a privileged position, in an unequal system, capture a large portion of those resources, and the poor invariably will pay the higher price of the negaitve externalities associated with unsustainable development.
And the losers are the usual suspects. In the work I've been doing on urban development, it's striking to see that cities, which are meant to be places of opportunity are actually creating entirely new forms of social exclusion. For example, the prevalence of informal modes of housing - slums - in much of the developing world is also associated with increasing exposure to pollution, contamination and toxins. There are just tremendous environmental problems associated with slums, and it's something we forget about until you do field work there. You see things like medical waste being dumped in the slums, and kids hanging out in piles of these stuff. That's a rather graphic illustratation, but poverty and environmental degradation do intersect rather dramatically.