We are frequently told that global poverty is reducing and developing nations are catching up to the West. However, new research by Jason Hickel and Dylan Sullivan analysing economic data from 1960 to 2023 shows the mainstream narrative is utterly false.
In fact, the world has not become more equal. The absolute income gap between “global core” countries, which includes the US, UK, Canada, and Australia, and the “global periphery” has increased by up to 270 percent since 1960.
Over sixty years of globalisation and free-trade, the core has gained ten times more income than the periphery. Wealth inequality has also worsened. The richest 1 percent globally captured nearly twice as much wealth as the bottom 99 percent over recent decades, with billionaire wealth increasing rapidly during global downturns.
In short, the data from Hickel and Sullivan shows that global inequality worsened dramatically during the push for market liberalisation in the 1980s and 1990s. The “developed countries have grossly exploited developing nations for the enrichment of a few global elite, with catastrophic human, social and environmental costs.”
This research confirms the major global inequality report by Joseph Stiglitz last year, who said the world is facing an “inequality emergency”.
Advanced economies (like the USA, Australia etc) grew substantially. Meanwhile, “structural adjustment” policies of wage and union suppression, cuts to public services and privatisations forced upon the Global South by the IMF and World Bank led to severe and prolonged economic contractions in four out of seven peripheral regions. Far from lifting developing nations out of poverty, globalisation has structurally locked those countries into poverty.
Only one peripheral country has improved its relative economic position against the core, and that is China. Other than China, the developing world has actually worsened, leaving an increasing majority of the global population locked in the periphery and trapped in poverty.
Australia sits comfortably within the “imperial core” as a rich nation, albeit subordinate to the USA with the geopolitical role of being the world’s quarry. This is the reason that Australia, for example, has such low taxes on our gas.
What is the imperial core? A small group of countries that maintains its high consumption by relying on the importation of resources, commodities, cheap goods and cheap labour from the Global South.
What about China?
By utilising state-led industrial strategy rather than liberal market integration, over the past thirty years China shifted to “higher-value nodes” in global production chains — it went from producing cheap commodities to producing refined rare-earths, cars and high-tech computers. China’s recent shift toward independent technological development directly challenges this core-periphery structure of world trade.
This shift has been met with intense belligerence from the United States and its allies, which directly shapes Australia’s current defence anxieties and foreign policy posturing. This is why the mainstream media constantly fixates on stirring up war rhetoric against China, and it is why Australia has signed up to AUKUS to send $380 billion to the USA and UK for nuclear submarines.
This global wealth inequality is a political choice imposed by the US and its allies upon the rest of the world. Inequality has reached dangerous, catastrophic levels, and that inequality can and must be reversed.
True global development will require southern nations to build economic sovereignty and break free from imperial control:
This requires reducing dependence on the core currencies, and reducing dependence on imports from the core, by building South-South trade and experimenting with trade currencies and swap lines… Such an approach is ultimately necessary to enable the South to gain greater control over their own output and claim a fairer share of the global product. It is worth noting that China has made substantial strides in this direction, and its technological development is enabling other Southern countries to reduce their dependence on key imports from the core.
Ending the reliance on unequal global exchange offers an opportunity to redefine prosperity, here in Australia and world-wide. And disentangling our economy and security-state from the US and ending anti-Chinese war rhetoric will allow us to be a self-reliant, peaceful nation.
We must take action to reduce extreme wealth and corporate power, and instead ensure that there is genuine equality and dignity. We can and must create a fairer world — one where wealth serves everyone, not just the few.