Global Inequality and Solutions

This is a summary from my recent read, Divide: A Brief Guide to Global Inequality and Its Solutions, by Jason Hickel. Consider getting the book for a more enriched reading experience.

Global inequality is not a natural phenomenon but a system deliberately created and maintained by economic and political structures that benefit a select few. The conventional narrative that poverty is merely a technical issue solvable through development aid and economic growth, is obsolete. Upon further disinterring, data show how inequality has been systematically entrenched through colonialism, debt dependency, unfair trade policies, and corporate exploitation.

The Illusion of Development

For decades, the world has been fed the idea that the gap between rich and poor nations is closing and that economic growth will eventually lift all boats. This optimism, however, is largely a mirage. The statistics often cited to showcase progress—such as reductions in extreme poverty—are misleading, as they rely on an unreasonably low poverty threshold of $1.25 per day. When the benchmark is raised to a more realistic $5 per day, it becomes clear that more than 60% of the global population still lives in hardship.

Development efforts, often spearheaded by Western institutions, have failed to address the core issues that perpetuate inequality. Instead of redistributing power and wealth, many of these initiatives serve to uphold the existing hierarchy by focusing on charity rather than systemic change. Aid programs, while well-intentioned, often act as a smokescreen that diverts attention from the deeper injustices within the global economic system.

Colonialism’s Lingering Grip

The roots of global inequality extend deep into history, beginning with European colonial expansion. Wealth was extracted from colonized nations, leaving them structurally weakened even after gaining political independence. This exploitation did not end with decolonization but evolved into more insidious forms, such as economic dependency through debt. Many developing nations are burdened with repayments that consume large portions of their national income, limiting their ability to invest in healthcare, education, and infrastructure.?

Debt crises, often blamed on mismanagement within poor nations, are in reality structured to maintain control. Loans from the International Monetary Fund (IMF) and World Bank come with stringent conditions that enforce neoliberal policies such as privatization and deregulation—measures that primarily benefit foreign investors rather than the citizens of borrowing nations.

Trade, Tax Havens, and the New Colonialism

Trade agreements that claim to promote economic growth often disproportionately benefit developed countries and multinational corporations. Many poor nations are locked into exploitative trade deals that force them to export cheap raw materials while importing expensive finished goods. This imbalance prevents them from developing strong, self-sufficient economies.

Moreover, tax havens enable corporations and wealthy individuals to siphon money away from public resources. Developing nations lose billions each year due to tax evasion, further exacerbating their financial struggles. While Western governments portray themselves as benefactors through aid programs, they simultaneously enable and profit from the very structures that keep poor nations impoverished.

Rethinking Solutions: From Charity to Justice

If inequality is a political problem, it requires political solutions. A fundamental shift in how the world approaches development and poverty alleviation. Rather than focusing on aid, which often reinforces dependency, the focus should be on justice—ensuring fair wages, labor rights, debt cancellation, and equitable trade policies.

One crucial step is to challenge the power dynamics that allow wealth to be extracted from developing nations. This means holding multinational corporations accountable, reforming global financial institutions, and closing tax loopholes that facilitate wealth hoarding.

Additionally, instead of imposing one-size-fits-all economic policies, developing nations should have the autonomy to implement their own strategies tailored to their unique circumstances.?

The Need for a Radical Shift

The global economic system is designed to serve the interests of a few at the expense of the many, and merely tweaking existing policies will not suffice. The world must move away from the idea that poverty is an unfortunate accident and recognize it as an outcome of deliberate choices. By reimagining economic and political structures, a more just and equitable world is possible.