Growth does not guarantee equality from "summary" of The Haves and the Have-Nots by Branko Milanovic
The idea that economic growth automatically leads to greater equality among individuals is one of the most enduring myths in the field of economics. While it is true that during periods of rapid economic expansion, there tends to be an overall improvement in living standards, the distribution of these gains is often highly unequal. In fact, history has shown time and time again that economic growth can actually exacerbate existing inequalities rather than reduce them. One of the main reasons for this is that the benefits of economic growth are not evenly distributed among all members of society. Those who are already wealthy or well-connected tend to be the first to reap the rewards of increased prosperity, while those at the bottom of the income ladder often see little to no improvement in their own circumstances. This leads to a widening gap between the haves and the have-nots, as the rich get richer while the poor remain mired in poverty. Another factor that contributes to the lack of equality in times of economic growth is the nature of the growth itself. In many cases, the expansion of the economy is driven by industries that cater to the needs and desires of the wealthy, such as luxury goods or financial services. This means that the jobs created by this growth are often high-paying and require specialized skills, leaving those without access to education or training behind. Furthermore, economic growth can also lead to increased competition for resources, further marginalizing those who are already struggling to make ends meet. As the economy expands, the cost of living tends to rise, making it even harder for low-income individuals to keep up with the pace of change. This can create a vicious cycle where the gap between the rich and the poor continues to widen, even as the overall level of prosperity in society increases. In light of these facts, it becomes clear that simply pursuing economic growth as a goal in and of itself is not enough to ensure greater equality among individuals. In order to truly address the issue of inequality, policymakers must take active steps to ensure that the benefits of growth are shared more equitably among all members of society. This may require implementing measures such as progressive taxation, social welfare programs, and investments in education and training to level the playing field and create a more just and inclusive society.
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