FX.co ★ Globalization and Global Inequality: Myths and Reality

According to researches conducted by a number of specialists, global inequality and the globalization engulfing the planet carry more disadvantages than advantages. For example, earlier it was believed that globalization reduces the level of world inequality, but it turned out to be a lie. The second myth is the claim that the rapid growth of income among the rich helps increase the incomes of poor citizens. Experts think that the most dangerous delusion is the possibility of abandoning the development of trade and technology in order to improve the standard of living of the population. Let's try to sort out these myths.

Globalization contributes to deepening inequality

According to experts, the expansion of globalization causes the higher level of inequality in the world. The gap in income between the richest and the poorest increases. Most often, analysts consider the inequality of two types: between countries and within states. For example, high economic growth in the PRC and India greatly influenced world income growth resulting in lower inequality between countries. However, within these states, the level of inequality has increased dramatically.

Higher incomes of wealthy people do not contribute to higher living standards of the poor

Previously, experts believed that the increase in income of the rich is necessary to improve the living standards of the poor. As an example, the expansion of the wealthy citizens business with the goal of creating jobs for those in need was cited. However, research refutes this. When comparing Europe and the United States, as well as China and India, it becomes obvious that in countries with a higher level of inequality, the increase in incomes of the poorest citizens has not been recorded.

Globalization and inequality depend on politics, not on trade and technology

According to experts, the current political situation directly affects the living standards of the population. The impact of global trade and the development of new technologies is secondary, experts believe. Innovations help develop the global economy, but they have nothing to do with reducing the gap between income levels of the richest and poorest citizens. At the same time, a favorable political climate promotes economic growth rising confidence in the future, analysts emphasize.