{"id":114765,"date":"2023-10-06T10:08:00","date_gmt":"2023-10-06T14:08:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=114765"},"modified":"2023-10-09T11:57:11","modified_gmt":"2023-10-09T15:57:11","slug":"wealth-gap-solutions","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/wealth-gap-solutions\/","title":{"rendered":"Global Wealth Gap Solutions: From Karl Marx to Thomas Sowell"},"content":{"rendered":"\n<p>Is the global wealth gap inevitable? Is it possible that we can minimize\u2014or even close\u2014it?&nbsp;<\/p>\n\n\n\n<p>Some countries have more wealth than others because of some combination of geographical differences, <a href=\"https:\/\/www.shortform.com\/blog\/cross-cultural-differences\/\">cultural differences<\/a>, political differences, and exploitation. Various economic analysts have suggested some ways that nations and peoples can work to close the gap.<\/p>\n\n\n\n<p>Keep reading to learn about three proposed global wealth gap solutions.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-global-wealth-gap-solutions\">Global Wealth Gap Solutions<\/h2>\n\n\n\n<p>Some of these wealth gap solutions apply only to specific causes of international inequality and have been noted as such, while others can be applied more broadly. In particular, we\u2019ll look at the following proposed global wealth gap solutions:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Do nothing: <\/strong>International inequality isn\u2019t a problem and therefore doesn\u2019t need to be solved.<\/li><li><strong>Encourage development: <\/strong>Rich nations can solve inequality by using foreign policy to encourage economic development in poor nations.<\/li><li><strong>Mass redistribution of wealth: <\/strong>Nations and peoples around the world can solve inequality by redistributing wealth from the rich to the poor.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-solution-1-do-nothing\">Solution #1: Do Nothing<\/h3>\n\n\n\n<p>Some argue<strong> international inequality is inevitable and acceptable<\/strong>. Thomas Sowell (<a href=\"https:\/\/shortform.com\/app\/book\/basic-economics\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Basic Economics<\/em><\/a>) argues that <a href=\"https:\/\/shortform.com\/app\/book\/basic-economics\/chapter-23\" target=\"_blank\" rel=\"noreferrer noopener\">because cultural, geographical, and political differences all contribute to international inequality, it\u2019s too complex an issue to solve<\/a>. He proposes nations focus on internal economic improvements rather than on addressing wealth disparities between each other.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-solution-2-encourage-development\">Solution #2: Encourage Development<\/h3>\n\n\n\n<p>Richer nations can work to solve international inequality not necessarily by redistributing wealth directly, but by helping poorer nations help themselves\u2014in other words, by encouraging economic development through foreign policy. They suggest doing this in a few different ways.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-encourage-development-through-trade\">Encourage Development Through Trade<\/h4>\n\n\n\n<p>Paul Collier (<a href=\"https:\/\/shortform.com\/app\/book\/the-bottom-billion#trap-3-being-landlocked\" target=\"_blank\" rel=\"noreferrer noopener\"><em>The Bottom Billion<\/em><\/a>) proposes <a href=\"https:\/\/shortform.com\/app\/book\/the-bottom-billion\/1-page-summary#remedy-4-trade-policy\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>richer nations eliminate protectionist and \u201cfair trade\u201d policies<\/strong><\/a>. When rich nations adopt protectionist policies to favor their own industries, they take business away from poorer countries. When richer nations adopt fair trade laws\u2014laws that set artificially high prices on specific commodities from poor nations\u2014they can make poorer countries dependent on those specific industries and prevent them from developing or diversifying their economies.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-encourage-development-through-foreign-aid\">Encourage Development Through Foreign Aid<\/h4>\n\n\n\n<p>In addition, some authors propose that rich nations strategically use foreign aid to encourage development in poor nations. They suggest doing this in two main ways:<\/p>\n\n\n\n<p><strong>1) Improving access to services: <\/strong>Esther Duflo and Abhijit Banerjee\u2019s <a href=\"https:\/\/shortform.com\/app\/book\/poor-economics\/1-page-summary\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Poor Economics<\/em><\/a><em> <\/em>suggests international financial institutions and charitable organizations can aid the poor by <a href=\"https:\/\/shortform.com\/app\/book\/poor-economics\/1-page-summary#four-key-lessons-about-improving-the-lives-of-the-poor\" target=\"_blank\" rel=\"noreferrer noopener\">improving their access to information and essential services<\/a>. Specifically, they argue that access to financial services\u2014nonpredatory banking, lines of credit, and so on\u2014can help people make better economic choices to escape poverty.<\/p>\n\n\n\n<p><strong>2) Targeting aid specifically: <\/strong>William Easterly (<a href=\"https:\/\/shortform.com\/app\/book\/the-white-mans-burden\/1-page-summary\" target=\"_blank\" rel=\"noreferrer noopener\"><em>The White Man\u2019s Burden<\/em><\/a>) argues for <a href=\"https:\/\/shortform.com\/app\/book\/the-white-mans-burden\/1-page-summary#the-promise-of-the-bottom-up-model\" target=\"_blank\" rel=\"noreferrer noopener\">a \u201cbottom-up\u201d model of foreign aid in which richer nations directly fund development projects designed by local community leaders of poor nations<\/a>. This method avoids imposing unwanted or impractical projects onto poorer nations and is designed to bypass <a href=\"https:\/\/www.shortform.com\/blog\/bad-governments\/\">corrupt governments<\/a> that might misuse foreign aid. For example, a richer nation might allow individual community leaders from a poor nation to plan and propose their own projects, which the rich nation would then fund directly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-solution-3-mass-redistribution-of-wealth\">Solution #3: Mass Redistribution of Wealth<\/h3>\n\n\n\n<p>Some authors argue that distributing wealth more equally along class lines will solve inequality both within and between nations.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-global-wealth-tax\">Global Wealth Tax<\/h4>\n\n\n\n<p>Thomas Piketty\u2019s <a href=\"https:\/\/shortform.com\/app\/book\/capital-in-the-twenty-first-century\/1-page-summary\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Capital in the 21st Century<\/em><\/a> argues <a href=\"https:\/\/shortform.com\/app\/book\/capital-in-the-twenty-first-century\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>wealth must be redistributed through a global progressive tax<\/strong><\/a>\u2014in other words, a tax that\u2019s higher the more wealth someone has. Money raised through this tax would then be redistributed to the poor. Piketty believes this tax must be global because if it only applies to certain nations, the rich will relocate their assets somewhere else to avoid it.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-revolution\">Revolution<\/h4>\n\n\n\n<p>Famously, philosopher and economist Karl Marx\u2019s <a href=\"https:\/\/shortform.com\/app\/book\/the-communist-manifesto\/1-page-summary\" target=\"_blank\" rel=\"noreferrer noopener\"><em>The Communist Manifesto<\/em><\/a><em> <\/em>supports using revolution to seize the wealth of the rich and <a href=\"https:\/\/www.shortform.com\/blog\/abolish-private-property\/\">abolish private property<\/a> in favor of communal ownership. In such an instance, wealth would be shared collectively among everyone regardless of their nationality, erasing the global wealth gap.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is the global wealth gap inevitable? Is it possible that we can minimize\u2014or even close\u2014it?&nbsp; Some countries have more wealth than others because of some combination of geographical differences, cultural differences, political differences, and exploitation. Various economic analysts have suggested some ways that nations and peoples can work to close the gap. Keep reading to learn about three proposed global wealth gap solutions.<\/p>\n","protected":false},"author":9,"featured_media":64810,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81],"tags":[1286],"class_list":["post-114765","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","tag-the-master-guides-the-global-wealth-gap","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Global Wealth Gap Solutions: From Karl Marx to Thomas Sowell - Shortform Books<\/title>\n<meta name=\"description\" content=\"Some nations have more wealth than others. Can they work together to close the gap? 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