Inequality, Intelligence, and the Post Crisis World

Amartya Sen, winner of the 1998 Nobel Prize in Economics, writes in his book “Inequality Reexamined” that when we think about inequality, we first ought to ask ourselves “inequality of what?”

Until Sen posed this question, policymakers often talked of “a more equal society” in a rough, slipshod way. As Sen notes, it is pivotal to debate what kind of inequality one is focusing on and how it ought to be addressed.

Sen proposes that the best way to gauge socioeconomic inequalities within a particular society is by measuring each individual’s “capabilities”—calculated by the sum of one’s “functions.” For example, a child starving in Africa and a man engaged in a hunger strike are both being deprived of food, but the latter has the option to eat should he decide to do so while the former does not. In this regard, the latter has the “function” to eat, while the former does not enjoy such a “function.”

We see here that starvation has two distinct forms when analyzed through Sen’s “capability approach”—“chosen starvation” and “forced starvation.”

This observation is crucial when it comes to policymaking: especially when the policy is geared towards lessening a particular inequality. Combating a particular inequality is usually a problem of distribution, and this is where the notion of “capabilities” becomes particularly important. Though distributing food to poverty-stricken African countries may help, it doesn’t do much good to distribute food to people fasting in Islamic countries, because they’re engaged in a form of “chosen starvation” out of a religious belief.

This problem of prudent distribution is also a problem of “pareto optimality,” named after the Italian economist Vilfredo Pareto. In short, “pareto optimality” is a state in which no further distribution will bring about any further utility (“utility” is a term akin to “happiness” – advanced by the fathers of utilitarianism J. Bentham and J.S. Mill.)

Today, the world is increasingly divided by “have’s” and “have-nots.” This problem is most conspicuous in the “North-South problem,” which depicts the enormous wealth disparity between the northern and southern hemispheres, an ugly phenomenon that has progressed due to globalization’s polarized, partisan governance.

It is time we develop a better system of global governance. It is time we establish new guidelines for economic prosperity in which every country is entitled to the nectars of growth. It is time we move beyond mere awareness of unequal global distribution of wealth, and move towards amending it.

As Amartya Sen observes in his essay “How to Judge Globalization,” globalization “deserves a reasoned defense, but it also needs reform.”

But without the intellectual infrastructure, in other words an academic infrastructure to mandate global policymaking, any hope of better global governance and better global distribution of wealth would largely be in vain.

The first realistic step towards establishing a post-Westphalia-system epistemic community—that is, a truly globalized intellectual brain-cloud that goes beyond the mere cathartic expression of today’s blogosphere—would be most easily achieved by networking all academic institutions into one giant, intertwined forum.

Some progress has been made since Joseph Nye indirectly affirmed the growing importance of intellectual persuasion in by coining the phrase “soft power” in his book “Bound to Lead: The Changing Nature of American Power” (1990). The relevance of intellectual persuasion has gradually risen over the past several decades, and there are growing signs of change within the ranks of many government bodies.

A prominent voice in international relations, Akihiko Tanaka agrees with Nye in his book “The Post Crisis World” that there is now a much greater emphasis on “soft power” rather than “hard power” as the political realm shifts towards intellectual brawling and the economy also shifts towards knowledge-intensive industries.

For example, Obama’s cabinet, which some have branded “Obama University,”—qualified by the fact that Obama has amassed an impressive echelon of brains wielding M.D.’s and Ph.D.’s, shows some early signs of growing brain-clouds that will soon hover over much of the political realm.

Unfortunately, Obama’s example hasn’t been followed by countries such as Japan, whose political leaders have shown a marked inability to lead through intellectual discourse. Prime minister Hatoyama shocked the world as he resigned, the sixth Japanese prime minister to do so in five years.

What Japan and much of the world needs today is to follow Obama’s example and bring about a renewed intellectual discourse on foreign policy, one that emphasizes the establishment of a global public sphere to tackle tomorrow’s problems.

//By Ryo TAKAHASHI

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