by Jason Hickel
THE DIVIDE
Global Inequality from Conquest to Free Markets
Jason Hickel
W. W. Norton & Company
Independent Publishers Since 1923
New York • London
for the wretched of the earth
Contents
PREFACE Beginnings
Part One The Divide
ONE The Development Delusion
TWO The End of Poverty . . . Has Been Postponed
Part Two Concerning Violence
THREE Where Did Poverty Come From? A Creation Story
FOUR From Colonialism to the Coup
Part Three The New Colonialism
FIVE Debt and the Economics of Planned Misery
SIX Free Trade and the Rise of the Virtual Senate
SEVEN Plunder in the 21st Century
Part Four Closing the Divide
EIGHT From Charity to Justice
NINE The Necessary Madness of Imagination
Endnotes
Acknowledgements
Index
Preface
Beginnings
I grew up in Swaziland – a tiny, landlocked country near the eastern seaboard of southern Africa. It was a happy childhood, in many ways. As a little boy I ran around barefoot through sandy grassland with my friends, unhindered by fences or walls. When the monsoon rains hit we would sail tiny bark boats through the dongas, welcoming the wet. We climbed trees and plucked mangoes and lychees and guavas to snack on whenever we grew hungry. During lazy afternoons I would sometimes wander up the hill from our little bungalow along the dirt track towards the clinic where my parents worked as doctors. I still remember the cool of the polished concrete floors and the breezy shade of the courtyard. But most of all I remember the queue – the queue of patients winding out of the door, some sitting on wooden benches, others on grass mats, waiting to be seen. To me, it seemed that the queue never ended.
As I grew older, I began to learn about things like TB and malaria, typhoid and bilharzia, malnutrition and kwashiorkor – scary words that were nonetheless familiar and well worn among our family. Later still I learned that we were living in the middle of the worst epidemic of HIV/AIDS anywhere in the world. I learned that people were suffering and dying of diseases that could easily be cured, prevented or managed in richer countries – a fact that to me seemed unspeakably horrible. And I learned about poverty. Many of my friends came from families that scraped together meagre livelihoods on subsistence farms subject to the constant caprice of drought, or who struggled to find work while living in makeshift shelters in the slums outside Manzini, the country’s biggest city.
They were not alone. Today, some 4.3 billion people – more than 60 per cent of the world’s population – live in debilitating poverty, struggling to survive on less than the equivalent of $5 per day. Half do not have access to enough food. And these numbers have been growing steadily over the past few decades. Meanwhile, the wealth of the very richest is piling up to levels unprecedented in human history. As I write this, it has just been announced that the eight richest men in the world have as much wealth between them as the poorest half of the world’s population combined.
We can trace out the shape of global inequality by looking at the distribution of income and wealth among individuals, as most analysts have done. But we can get an even clearer picture by looking at the divide between different regions of the world. In 2000, Americans enjoyed an average income roughly nine times higher than their counterparts in Latin America, twenty-one times higher than people in the Middle East and North Africa, fifty-two times higher than sub-Saharan Africans and no less than seventy-three times higher than South Asians. And here, too, the numbers have been getting worse: the gap between the real per capita incomes of the global North and the global South has roughly tripled in size since 1960.
*
It is easy to assume that the divide between rich countries and poor countries has always existed; that it is a natural feature of the world. Indeed, the metaphor of the divide itself may lead us unwittingly to assume that there is a chasm – a fundamental discontinuity – between the rich world and the poor world, as if they were economic islands disconnected from one another. If you start from this notion, as many scholars have done, explaining the economic differences between the two is simply a matter of looking at internal characteristics.
This notion sits at the centre of the usual story that we are told about global inequality. Development agencies, NGOs and the world’s most powerful governments explain that the plight of poor countries is a technical problem – one that can be solved by adopting the right institutions and the right economic policies, by working hard and accepting a bit of help. If only poor countries would follow the advice of experts from agencies like the World Bank, they would gradually leave poverty behind, closing the divide between the poor and the rich. It is a familiar story, and a comforting one. It is one that we have all, at one time or another, believed and supported. It maintains an industry worth billions of dollars and an army of NGOs, charities and foundations seeking to end poverty through aid and charity.
But the story is wrong. The idea of a natural divide misleads us from the start. In the year 1500, there was no appreciable difference in incomes and living standards between Europe and the rest of the world. Indeed, we know that people in some regions of the global South were a good deal better off than their counterparts in Europe. And yet their fortunes changed dramatically over the intervening centuries – not in spite of one another but because of one another – as Western powers roped the rest of the world into a single international economic system.
When we approach it this way, the question becomes less about the traits of rich countries and poor countries – although that is, of course, part of it – and more about the relationship between them. The divide between rich countries and poor countries isn’t natural or inevitable. It has been created. What could have caused one part of the world to rise and the other to fall? How has the pattern of growth and decline been maintained for more than 500 years? Why is inequality getting worse? And why do we not know about it?
*
From time to time I still think back to that queue outside my parents’ clinic. It remains as vivid in my mind as if it were yesterday. When I do, I am reminded that the story of global inequality is not a matter of numbers and figures and historical events. It is about real lives, real people. It is about the aspirations of communities and nations and social movements over generations, even centuries. It is about the belief, shaken with doubt from time to time but otherwise firm, that another world is possible.
At one of the most frightening times in our history, with inequality at record extremes, demagogues rising and our planet’s climate beginning to wreak revenge on industrial civilisation, we are more in need of hope than ever. It is only by understanding why the world is the way it is – by examining root causes – that we will be able to arrive at real, effective solutions and imagine our way into the future. What is certain is that if we are going to solve the great problems of global poverty and inequality, of famine and environmental collapse, the world of tomorrow will have to look very different from the world of today.
The arc of history bends towards justice, Martin Luther King Jr once said. But it won’t bend on its own.
PART ONE
The Divide
One
The Development Delusion
It began as a public-relations gimmick. Harry Truman had just been elected to a second term as president of the United States and was set to take the stage for his inaugural address on 20 January 1949. His speechwriters were in a frenzy. They needed to whip up something compelling for the president to say – something bold and exciting to announce. They had three i
deas on the list: backing for the new United Nations, resistance to the Soviet threat and continued commitment to the Marshall Plan. But none were very inspiring. In fact, they were downright boring and the media was bound to ignore the speech as yesterday’s news. They needed something that would tap into the zeitgeist – something that would stir the soul of the nation.
Their answer came from an unlikely source. Benjamin Hardy was a young, mid-level functionary in the State Department, but as a former reporter for the Atlanta Journal he had a knack for a good headline. When he stumbled across a memo requesting fresh ideas for the inaugural address, he decided to pitch his boss a wild thought: ‘Development’. Why not have Truman announce that his administration would give aid to Third World countries to help them develop and put an end to the scourge of grinding poverty? Hardy saw this as a sure victory – an easy way, he wrote in his pitch, ‘to make the greatest psychological impact’ on America and ‘to ride and direct the universal groundswell of desire for a better world’.
Hardy’s bosses shut him down. It was a risky, out-of-the-blue idea, possibly too new to make much sense to people; it wasn’t worth experimenting with it in such an important setting. But Hardy was determined not to let the opportunity pass. He managed to fake his way into the White House, gave a rousing defence of the idea to Truman’s advisers and – with a little bit of careful manoeuvring by supporters on the inside – his plan ended up as an afterthought, ‘Point Four’, in Truman’s draft. Truman approved it.
It was the first inaugural address ever to be broadcast on television. Ten million viewers tuned in on that cold January afternoon, making it the largest single event ever witnessed up to that time. More people watched Truman’s address than watched the inaugural addresses of all his predecessors put together. And they loved what he had to say. ‘More than half the people of the world are living in conditions approaching misery,’ he proclaimed. ‘Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant.’ But there was hope, he said: ‘For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people. The United States is pre-eminent among nations in the development of industrial and scientific techniques . . . our imponderable resources in technical knowledge are constantly growing and are inexhaustible.’ And then the clincher: ‘We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas . . . It must be a worldwide effort for the achievement of peace, plenty, and freedom.’
Of course, there were no actual plans for such a programme – not even a single document. It was included in the speech purely as a PR gimmick. And it worked. The media went crazy – papers from the Washington Post to the New York Times glowed with approval. Everyone was excited about Point Four, and the rest of the speech was forgotten.
*
Why did Point Four so capture the public imagination? Because Truman gave Americans a new and powerful way to think about the emerging international order. The dust was settling after the Second World War, European imperialism was collapsing and the world was beginning to take shape as a collection of equal and independent nations. The only problem was that in reality they were not equal at all: there were vast differences between them in terms of power and wealth, with the countries of the global North enjoying a very high quality of life while the global South – the majority of the world’s population – was mired in debilitating poverty. As Americans peered beyond their borders and began to notice the brutal fact of global inequality, they needed a way to make sense of it.
Point Four offered them a compelling narrative. The rich countries of Europe and North America were ‘developed’. They were ahead on the Great Arrow of Progress. They were doing better because they were better – they were smarter, more innovative and harder working. They had better values, better institutions and better technology. By contrast, the countries of the global South were poor because they hadn’t yet figured out the right values and policies yet. They were still behind, ‘underdeveloped’ and struggling to catch up.
This story was deeply affirming for Americans; it made them feel good about themselves, proud of their achievements and their place in the world. But perhaps more importantly, it gave them a way to feel noble too – it gave them access to a higher, almost cosmological purpose. The developed countries would stand as beacons of hope, as saviours to the poor. They would reach out and give generously of their riches to help the ‘primitive’ countries of the South follow their path to success. They would become heroes, leading the way to a world of unprecedented peace and prosperity.
In other words, Point Four explained the existence of global inequality and offered a solution to it in one satisfying stroke. And for this reason it wasn’t long before it was picked up by the governments of Western Europe as well. As Britain and France were withdrawing from their colonies, they needed a new way of explaining the gross inequality that persisted between themselves and the people they had ruled for so long. The story of development – that the nations of the world were simply at different positions along the Great Arrow of Progress – offered a convenient alibi. It allowed them to disavow responsibility for the misery of the colonies, and it was more palatable than the explicit racial theories they had relied on in the past. What is more, it allowed them to shift their role in the eyes of the world: graciously relinquishing imperial power, they would turn to aiding their fellow man.
It was an incredibly beguiling tale to Western ears. It wasn’t just another story – it had all the elements of an epic myth. It provided a keystone around which people could organise their ideas about the world, about human progress and about our future.
The story of development remains a compelling force in our society to this day. We encounter it everywhere we turn: in the form of charity shops like Oxfam and Traid, in TV ads from Save the Children and World Vision, in annual reports published by the World Bank and the International Monetary Fund, and every time we see the world’s nations ranked by GDP. We hear it from rock stars like Bono and Bob Geldof, from billionaires like Bill Gates and George Soros, and from actors like Madonna and Angelina Jolie, khaki-clad and mobbed by eager African children. We get it in the form of Live Aid concerts and celebrity fundraising singles like ‘Do They Know It’s Christmas?’, which somehow manages to crop up every year. Every major university offers degree programmes in development, and a whole class of professionals has emerged to staff the thousands of NGOs that have sprung up over the past few decades. Development is everywhere. And it comes with its own rituals that millions upon millions of people can participate in: buying TOMS shoes, giving a few dollars a month to sponsor a child in Zambia, or sacrificing summer holidays to volunteer in Honduras.
It probably wouldn’t be a stretch to say that almost everyone in the Western world has at some point encountered or even participated in the story of development. It is ubiquitous. And it has become an enormous industry, worth hundreds of billions of dollars – as much as all the profits of all the banks in the United States combined.
*
The development story is so deeply ingrained in our culture that we take it almost completely for granted. It seems manifestly true. For much of my young adult life I passionately believed in it. When I left Swaziland for university in the United States, I was confronted by a completely different world to the one in which I had grown up: a world replete with excess – enormous houses, giant cars, slick new roads and cavernous shopping malls. But I was unable to put Swaziland behind me. Casting about for explanations for and solutions to the profound material differences between the two worlds I straddled, I found answers – and hope – in the story of development.
During my final year of university, I moved to Nagaland, a remote state in a far-flung corner of north-east India, to work with a local microfinance organisation. I found it exciting and rewarding – being part of the development stor
y gave me a sense of value and purpose far beyond anything the corporate world had to offer. It made me feel as though I was part of something important. It made me feel noble.
Eager to continue working in the field, I later returned to Swaziland to take up a job with World Vision, one of the world’s largest development NGOs. Based in the village of Mpaka, a dusty outpost on a road that traverses the lowveld between Manzini and the border of Mozambique, I threw myself into a range of projects – everything from water systems to healthcare – and once again I felt the rush that came with being part of the development story. But after my initial excitement faded, I found myself confronting some difficult questions. We had dozens of projects across that tiny country, representing millions of dollars of charity and many years of work – and World Vision was only one of many NGOs tackling the very same problems, bolstered by a steady flow of aid from donor countries in the global North. But on the whole, nothing really seemed to be changing. Why did most people in Swaziland remain so poor, despite this effort? It felt as though we were shovelling sand into a bottomless pit.
World Vision had hired me to help analyse why their development efforts in Swaziland were not living up to their promise. The reason, I discovered, was that their interventions were missing the point. Their story about the world – borrowed more or less verbatim from Truman – led them to assume that all that Swazis needed was a bit of charity to help them out. World Vision went about caring for dying AIDS patients, setting up income-generation schemes for the unemployed, teaching new techniques to farmers and paying for children’s education. But, as helpful as these projects were, they did nothing to address the actual causes of the problems. Why were AIDS patients dying? Over time, I learned that it had to do with the fact that pharmaceutical companies refused to allow Swaziland to import generic versions of patented life-saving medicines, keeping prices way out of reach. Why were farmers unable to make a living off the land? I discovered that it was related to the subsidised foods that were flooding in from the US and the EU, which undercut local agriculture. And why was the government unable to provide basic social services? Because it was buried under a pile of foreign debt and had been forced by Western banks to cut social spending in order to prioritise repayment.