Essay: How might economic inequalities constitute a threat to global security

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  • Subject area(s): International Relations
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  • Published on: 6th June 2012
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How might economic inequalities constitute a threat to global security?

Economic inequalities in any country arise from overconcentrations of wealth and power. Imbalances in the distribution of power can lead to a lack of political representation in government for some groups, the creation of power elites, the loss of personal freedoms and civil liberties, and abuses of authority, of which genocide is an extreme example. Imbalances in the distribution of wealth can lead to the loss of economic opportunity and social mobility, the creation of a permanent underclass, and conditions of illiteracy, unemployment, homelessness, hunger, and disease. The social problems caused by economic inequality are a threat to global security. The relationship between economics and global security is complex and not necessarily an immediate link to make. The relationship between economics and global security is complex and not necessarily an immediate link to make. It is central to understand the importance of a country's economic standing, or progress, and the effects that would have on the country as a whole. This can be done by exploring the theories of structuralism. In exploring the relationship between economic inequalities and global security it is also important to define the categories in which countries are classified with regards to their economic standing. ‘Advance Industrial Countries' (AIC's) enjoy self-sustained economic growth in all industrial sectors, whereas ‘Less Developed Country's' (LDC's) are characterized by low GDP, low per capita GDP, low per capita growth, and low life expectancy, combined with high population growth rates. The aims of this essay is to examine the reasons that cause countries to fall into such categories and to outline an understanding as to why the issue of inequality has progressively gotten more serious and difficult to control. This is necessary in order to outline the potential threats that are present today as a result of the economic inequality in the world.

The role of external factors in the development of states is dramatically increasing. Because of the differences in financial and economic power, the interdependence between countries is acquiring an ever more asymmetric character. While a small group of leading industrialized states plays mainly the role of the subjects of globalization, the vast majority of the remaining states are turning into its objects that are “drifting” on the waves of financial economic developments. As a result, the inequalities of social and economic development of the world are increasing. The world economy is obviously becoming divided into “zones of growth” and “zones of stagnation”. Thus in 1998 ten leading states, recipients of foreign investments accounted for 70 percent of their total amount, and countries with a low development level accounted for less than 7 percent. While in 1960 the incomes of the richest 20 percent of the world's population exceeded those of the poorest 20 percent by 30 times, by 2002 that gap had trebled. At present half of the Earth's population have an income of under two dollars a day. About a billion people have no work, and among those who work almost 89 percent are deprived of social guarantees.

The “Global Poverty Report” issued at the G8 Okinawa Summit in July 2000 noted that eliminating global poverty “is both a moral imperative and a necessity for a stable world” (World Bank, 2000, page i). The first concern is incontestable: global poverty is a moral abomination of the highest order. Indeed, this moral argument motivates invaluable personal and non-governmental behaviour: literally thousands of private organisations work tirelessly and with great effect to reduce global poverty. But these private efforts cannot, by themselves, overcome the problem; nor can such efforts operate outside of the political and economic context maintained by the system of states. States remain the most organised and powerful agents in the world today, and their support is necessary to alleviate global poverty substantially. Otherwise poverty will often contribute to global insecurity as people in need may turn to non-legitimate means to make more income.

Global poverty does not obviously constitute a threat to the national interests of states defined in these terms. Generally, poor states are militarily weaker than richer states, and few poor societies can directly challenge the territory or autonomy of rich states. Absent a direct threat from poor states, rich states can and will assert that their resources should be directed toward other issues; generally issues of a more immediate and unambiguous character. The alleviation of global poverty is therefore a low priority for most rich states. When Thomas Hobbes first articulated the security dilemma of states in the 17th century, there was no overarching power to guarantee the security of states, and each state had no choice but to develop its own power for self-protection. In developing that power, however, every state exacerbated the feeling of insecurity in its neighbours, who would in turn have little choice but to expand their power as well. This cycle of escalating power and anxiety generated a relationship among states that mimicked the classic Hobbesian description of those lives lived without the protection of a sovereign: “solitary, poore, nasty, brutish and short” (Hobbes, page 186).

For years, however, many scholars have argued for a redefinition of national security, contending that the world has changed dramatically since Hobbes. For example, Richard Ullman offered this alternative understanding of national security twenty years ago: “A more useful (although certainly not conventional) definition might be a threat to national security is an action or sequence of events that (1) threatens drastically and over a relatively brief span of time to degrade the quality of life for the inhabitants of a state, or (2) threatens significantly to narrow the range of policy choices available to the government of a state, or to private, nongovernmental entities within the state” (Ullman, 1983, page 133). Ullman's conception does not replace the historical definition of national security; rather, it expands that definition to include less direct, immediate, or intentional threats to a citizenry. While the Ullman formulation fails to capture the sense of urgency usually necessary to induce citizens to pay for the costs of security, it nevertheless more accurately reflects citizens' actual security interests.

Powerful states have a vested interest in the stability of the international system, and one cannot overestimate the significance of global order to a powerful state. Through their power, these states have shaped the political, economic, and cultural rules and norms that maintain the system as a whole and have taken steps to assure that those rules and norms conform to their interests. American foreign policy since 1945 is a good example of the process: the United Nations system roughly reflects the republican form of representative democracy in the United States, and the Bretton Woods system (the International Monetary Fund, the World Bank, and the World Trade Organization) defends the rules of market capitalism. Poor states are threatening to rich states because the weaknesses of poor states could be globalized, thereby destabilising the entire international system. What is new and different about this threat is that, with few exceptions, it is not an intentional strategy. Poor states are not “enemies” of the international system, although the ramifications of their condition may undermine both the system as a whole and the quality of life in rich states in profound and potentially catastrophic ways.

Globalization has succeeded in economically integrating a large number of countries, rich and poor, into world markets. Proponents of globalization assert that the process benefits all who participate, and there is little question that globalization stimulates widespread economic activity (Maddison, 1995, page 19). Increased global economic activity, however, has been accompanied by a dramatic worsening in global income inequality. The OECD study of the world economy from 1820-1992 and its data on GDP per capita growth led it to conclude that “the overall long run pattern of income spreads has been strikingly divergent. In 1820 the intercountry range (the distance between the lead country and the worst performer) was over 3:1, in 1870 7:1, in 1913 11:1, in 1950 35:1, in 1973 40:1, in 1992 72:1” (Maddison, 1995, page 22). Therefore economic inequality seems to be increasing and in turn global insecurity as well. However, this pattern is increasingly unstable. High levels of economic activity are not sustainable in the face of dramatically escalating income inequality. As economic activity becomes ever more concentrated and larger populations are excluded from that activity, there are both short and long term risks to the global economic system.

The frequent debt crises since 1982, for example Mexico in 1982, Mexico again in 1995, several Asian countries in 1997, Russia in 1998, and Argentina in 2002, document the short-term risks of this growing inequality between rich and poor states. The total external debt of developing countries in 2001 amounted to about $2.3 trillion (World Bank, 2003, page 221), of which about 40 percent was owed to private lenders. These debts will never be repaid fully, and the rich countries have seemingly accepted this likelihood. But the debts cannot be completely forgiven without inflicting irreparable damage to the future integrity of the international financial system. Similarly, outright defaults on these loans would perhaps fatally undermine confidence in global capital markets and critically weaken specific banks with substantial outstanding loans. Therefore again economic inequality has the potential to undermine the modern international system, and pose a threat to global security.

Rich and poor nations are thus locked together in a mutual hostage situation. The economic security of rich countries requires a degree of economic development within poor countries to insure a sustained commitment to some level of debt repayment. The poor countries cannot honour this commitment without substantial support from the rich. Paradoxically, however, the problem of debt repayment has become so large that the rich states are more vulnerable to a default by a major debtor than the poor states are at risk of not being able to repay the debts. Rich states stand to lose more than just the interest payments on their loans if growing poverty in debtor nations forces a major default. O'Rourke and Williamson assess the longer term risk of growing inequality in terms of a reaction against globalization itself. In assessing the dismal economic collapse of the 1930s, these scholars concluded that: “….a political backlash developed in response to the actual or perceived distributional effects of globalization. The backlash led to the reimposition of tariffs and the adoption of immigration restrictions, even before the Great War. Far from being destroyed by unforeseen and exogenous political events, globalization, at least in part, destroyed itself” (O'Rourke & Williamson, 1999, page 287).

The NSS discusses to some degree the political threat posed by the poor. Its argument is familiar: poor people will resort to violence (either in the form of terrorism or through other criminal activities like drug smuggling) to change the political and economic system that they believe is responsible for their poverty. World Bank President James Wolfensohn also drew an explicit link between poverty and violence in 2001 when he spoke of the war on terrorism: “It is hard to say when the war will be won. Getting our hands on Osama bin Laden or installing a new government in Afghanistan will only be the start of the process. The war will not be won until we have come to grips with the problem of poverty and thus the sources of discontent. Not just in Afghanistan, but also in the neighboring regions, in many other countries. This war is viewed in terms of the face of Bin Laden, the terrorism of Al Qaeda, the rubble of the World Trade Center and of the Pentagon, but these are just symptoms. The disease is the discontent seething in Islam and, more generally, in the world of the poor” (World Bank, 2001).

While this political explanation of violence has a grain of truth, overall it is both misleading and dangerous. It is misleading because genuinely poor people do not themselves have the time nor the means to pose significant security threats. One of the greatest ironies of poverty is that being poor constitutes more than a full-time job: poverty dictates almost total attention to subsistence and no time for either leisure or plotting. Poverty is unquestionably a conditioning factor in resorting to violence—poverty itself is a ubiquitous form of violence. But the link between poverty and terrorism is, at best, tenuous. Terrorist leaders are rarely poor. Perhaps poverty may inspire willing foot soldiers for terrorist leaders, but terrorist organizers generally have their own agendas which have little to do, except rhetorically, with the alleviation of poverty.

Walt Rostow presents a valuable contribution to the analysis of why some countries have developed to far superior levels and at a much greater speed than other countries, in his ‘Stages of Economic Growth' (1969). Originally all countries had an economy based on barter, agriculture and subsistence when they were at the first stage of economic growth described as the ‘Traditional' society. Rostow identifies four following stages: the ‘Transitional' stage in which economies produce surplus and shift toward specialization, the ‘Take-off' stage seen in the process of industrialisation and growing investment, the ‘Drive to Maturity' in which there is less reliance on imports and diversification of production takes place, this is followed by the final stage where a country enjoys high mass consumption. Using Rostow's five stages of economic growth one is lead to identify the point in which inequality originates, as not all countries appeared to experience the ‘Take off' stage.

The ‘Dependency Theory', constructed by Andre Gunder Frank, presents underdevelopment not as a phase but as an inherent characteristic of the world capitalist system. This theory rests on the belief that in order for a country to develop, it requires disengagement from the global capitalist system. The link between capitalism and inequality is widely recognised, in 2001 the World Bank were quoted as saying “Poverty rates will continue to fall if growth continues” (J.Vandemoortele. 2002. p392). It is ironic and hugely unfortunate that the system of capitalism has resulted in overwhelming economic success within certain countries whilst coinciding with devastating poverty in others.

There are of course many other factors that can be considered reasons that further the division between rich and poor countries and that make it near impossible for certain economies to develop and strengthen. For example the population of country should be taken into account as mentioned whilst comparing the US and Latin America. There is wide agreement that the most rapid growth rates of world population will be in the South, with high birth rates, low death rates and an overall population momentum. Widespread illiteracy is also a source of deepening poverty as it constitutes to rising inequality and slowing growth, “countries cannot expect to integrate into the global economy without equipping their people with basic capabilities” (J.Vandemoortele. 2002. p379). AIDS is another contributor and an example of circumstances that have spiralled out of control and are now irreversible. Roughly seventy per cent of those infected with AIDS live in Africa and the “economic effects of the AIDS pandemic have been nothing less than calamitous” (P.Wilkinson. 2007. p132). Medical services are unable to cope and families are no longer able to support themselves.

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