The Costs of Inequality and the Affordability of Solutions

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About the Author

Stephanie Seguino is Professor of Economics at the College of Arts and Sciences, University of Vermont, USA and Professorial Research Associate at the School of Oriental and African Studies, University of London.

Notes

1. Karl Marx, of course, emphasized that the business cycle, and the growth trajectory of a capitalist economy, reflects the conflict over wages and profits.

2. Growth can, as Kaleckian authors show, also be profit-led. That is, a higher profit share of income (whether a return to physical or financial capital) can stimulate growth. Evidence for this is particularly notable in the case of export-led growth in developing countries relying on female labor that has been segregated into the labor-intensive production of export goods. Racial segregation, and the resulting exploitation due to “crowding,” can have similar effects. The practical challenge for the state in a profit-led economy would be to alter incentives to move the economy towards one that is wage- or equity-led.

3. See, for example, Clark (2003) on survey-based priorities of human development goals as identified by ordinary people in South Africa.

4. The latter reflects the wider gaps in North Africa.

5. I am indebted to Shailaja Fennell for this point.

6. In the last decade, initial steps have been taken to identify the societal costs associated with disabilities. Some studies point to the economic benefits of public expenditures to address disability issues (Metts 2004) although this area could benefit from much more empirical work to estimate the size of those benefits.