In the Face of the Four Challenges "some are more equal than others"

While the choice is ours to make, it is important to also realise that, beside the core social issue of cognitive failure on the part of present decision-making elites, the Four Challenges are compounded with another major issue, that concerning trends in global income and wealth distribution. To this point we have only considered average wealth per head. Yet we all know that wealth remains highly unevenly distributed and thus that ability to cope with the challenges also remains highly uneven.

Numerous organisations have commented on progress on one of the “Millennium Objectives”, that of reducing substantially global poverty and on the “rise of the middle class” in numerous so-called “emerging countries”.[1] Certainly the number of people living on US$1.25/day (about €0.92/day) has declined over the last 20 years (from 46% in 1990 down to 27% in 2007, according to the UN people dealing with the “Millennium Objectives”). However, according to another UN body, the UNCTAD, the number of extremely poor countries has doubled over the last 40 years, which points to the possibility that something else than straightforward poverty reduction may be at play. [2]

Figure 15 – Long-term Trends in Global Wealth and Income Distribution

In fact, a range of works analysing changes in global income and wealth distribution over the last 23 years based on World Bank, UNDP, Crédit Suisse, UNU-WIDER, and Eurostat data shows the pursuit of highly negative trends that some of us had already singled out in 1997. [3]

Collecting and analysing relevant data globally in accurate enough ways is an arduous and difficult task. However, the gap between the situations as they were around the end of the 1980s and in 2012 is such that, as a first order of magnitude, the evaluation of overall trend as summarised in Figure 15 can be considered as robust.

Figure 15 shows that over the last two decades both income and wealth have become more and more concentrated into fewer and fewer hands. While there are significantly fewer people living in extreme poverty, there is also a very substantial attrition at the top of the so-called “middle-income” categories. Presently 40% of the global population live less than €1.5/day and 90% on less than €9,000/year (or less than about €25/day). As anyone who has tried to live on €25/day can report, it is very hard and is not what most people would call a “middle class lifestyle”, a phrase that evokes access to the full consumerist compendium, including abundant food, washing machine, dryer, fridge, freezer, advanced cooking facilities, computer, smart phone, Internet, TV and HiFi, at least one car, and more. Looked at coldly and realistically, while in 1990 some 80% of the global population had to be considered as poor, the proportion is now in the order of 90%.

Figure 15 also shows that under the relentless impact of thermodynamic decline, more and more people are de facto rejected or excluded from the “exclusive club” of those who have ongoing access to consumerist affluence. As manifested in the USA and elsewhere by the tense struggles concerning how to handle massive levels of debt, austerity regimes, the pursuit or curtailing of “welfare state” policies, and (largely ineffectual) efforts to combat tax evasion, one can observe a distinct inclination among those in the “exclusive club” to preserve their position no matter what, even at the expense of the majority.

While one can sense a growing awareness among people on both sides of the increasingly sharper wealth divide that “things are getting seriously worse”, very few people or organisations do manifest an awareness of the underlying energy dynamics that by and large drive the globally worsening situation. Considering the future, on the basis of what we have analysed it should be clear that the chances for most of those presently excluded or rejected from the “club” to have ever access to it have become extremely low, especially in any sustainable way; the net annual energy flows that could enable this are no longer available.

However, notwithstanding the enormous efforts on the part of decision-making elites to maintain the status quo and postpone the unavoidable by way of an endless series of mythical financial and economic measures, it should be clear also, that the position of those within the “club” is just as much insecure since most (and often all) of their wealth is now de facto fictitious, not being grounded in any of the tangible forms that we have discussed earlier and that could serve to ensure a reliable future. Faced with a relentlessly decaying thermodynamic situation many (if not most) of the apparently wealthier may well end up much worse off than the already poor. For millennia, the vast majority of the latter have always been poor and know how to cope, which is not the case, and by a very wide margin, concerning the wealthy – an ironical twist to a dire situation affecting us all.

Overall, in a rational world, it should be obvious that it would be in the best interest of all to cooperate and change course. However, it should be equally obvious that in the present cognitive failure context this is highly unlikely to happen and that it would be a deadly mistake to count on present decision-making elites.

So paradoxically, notwithstanding the huge and growing differences in apparent wealth, in the face of the Four Challenges rich and poor must face equally a dire future and each in heir own ways must make their own choices, for worse or better, to remain subjected to BAU or to take evasive action.

[1] See for example, Oxford Martin Commission for Future Generations, 2013, Now for the Long Term, University of Oxford, UK or Xavier Sala-i-Martin, Maxim Pinkovskiy, 2010, Parametric estimations of the world distribution of income, www.voxeu.org.

[2] As reported in Le Monde, 23/06/2010 (re the Millennium Objectives) and 26/11/2010 re the UNCTAD report.

[3] See for example, Keating et al., 2012, Op. Cit.; Ortiz, Isabel and Cummins, Matthew, 2011, Global Inequality: beyond the bottom billion - A Rapid Review of Income Distribution in 141 Countries, UNICEF; Wade, Robert Hunter, 2001, “The Rising Inequality of World Income Distribution” in Finance & Development, Volume 38, Number 4, IMF; and Arnoux, Louis and Grace, Victoria, 1997, Critical Futures, Environmental Justice, Global Ethics for the 21st Century Conference, University of Melbourne, Australia.

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