"Politics and Economics: The 101 Courses You Wish You Had"
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The World’s Rejection of Peaceful Coexistence With Inequality
Inequality is nothing new. At times, it has fed violent revolutions, while at others it has simply been accepted as a fact of life. In the United States, the immense riches accumulated by tycoons like Warren Buffet, innovators like Steve Jobs, or entertainers like Oprah Winfrey are often admired and celebrated. Less so in places where wealth typically results from corruption and shady deals with the government. In recent years, however, the economic crises in the U.S. and Europe, and the painful austerity policies that followed, have made the world more aware of the extent to which the gap between rich and poor has widened. As a result, demands to fight inequality have become far more common.
President Obama recently called inequality the “defining challenge of our time,” while, a week earlier, Pope Francis wrote that “Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality … Such an economy kills.” The traction the issue has gotten among world leaders is due in part to the recognition that the hundreds of thousands of people marching in the streets of a large and growing number of cities list inequality among the grievances that energize their cause. But it is also fueled by the mounting evidence that, in richer countries, economic inequality is increasing and, in places like the United States, has reached levels that were last seen a century ago.
Politicians, journalists, social scientists, and even business leaders now routinely call attention to growing disparities in income and wealth. And increasingly, governments, institutions, and citizens are trying to reverse this trend. This is good news. But the challenge will be to fight against inequality without empowering the demagogues who advocate policies that could end up aggravating it. Latin America and Africa are rife with examples of populist leaders who ultimately boosted inequality by imposing economic policies that stifled investment, destroyed jobs, fueled inflation, and nurtured an oligarchy that thrived on cronyism.
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