Introduction
Development is slow but gradual process that is marked by changes in lifestyle, processes, technology, policies and other aspects that affect human life. Human beings desire to use modern technology to ensure there is efficiency in production processes. In addition, they hope to move very fast from one place to another and access information within a very short period (Muilanovic 27).
These and other aspects of modern societies propel people to use various ways of ensuring that they are placed in strategic positions to acquire wealth, power and influence that will help them to control others.
This has led to inequalities in various spheres and there are fears that competition for the available limited resources will push people to use unethical and illegal survival tactics. Inequality occurs in various forms, including social, political and economic and each of these aspects has significant impacts on the society. This essay presents different ways that show the impacts of inequality on development.
Definitions
Inequality refers to unproportional and unfair allocation, access, distribution and provision of social, political and economic resources to people (Duflo 9). This means that this term covers all aspects that show unfair consideration given to people of a particular group. This vice makes some people to be perceived to be more special than others yet this is not supposed to be the case.
Equality exists when fair measures are used to allocate people resources and ensure every person gets what they deserve. Development refers to the progress made by individuals and is usually marked by improving living conditions, infrastructure, economy and access to quality social services (Duflo 11). Development is measured by comparing events and situations between two or more societies during different periods.
This aspect may be positive or negative depending on its impacts on the society. Negative development means that the society is experiencing serious challenges in promoting equality among its members. On the other hand, positive development means that people have equal and reasonable access to resources and thus nobody violates their rights and freedoms (Greig 32).
Growth refers to visible changes that occur in the society as a result of equality or inequality and how their impacts on people. Inequality has serious impacts on growth and development and that is why nations and individuals have established various ways of eliminating this vice.
Types of Inequalities
There are three types of inequalities in all societies and their causes and effects are similar. These classes originate from the issues that create differences among people, and that is why they are named after their subjects. Social inequality presents issues that affect people at the family and community level and this means that it is concerned with how people interact with others (Stewart 41). This includes gender, sports, communication, jobs and roles of different members in the society.
Economic inequality involves unfair allocation of factors of production and resources that are important in increasing food production, creating employment opportunities and improving economies of nations. Political inequality refers to the unfair preferences that exist in the allocation and distribution of power within a region.
This includes appointments, initiation of development projects, diplomatic relations, and other aspects that regulate government activities. The impacts of these inequalities may be similar or different depending on their occurrence, victims and conditions that promote them.
Impacts of Inequality on Development
The segmentation of aggregate demand in an economic system is a significant impact of inequality in the economy of a society. People in the middle class struggle to fit in the superfluous consumption groups and this force them to strain their budgets at the expense of basic needs like proper food and shelter.
This group earns a low income, but cannot be satisfied with the way it lives. Therefore, it has to seek for various ways of ensuring that it does not fall into the low class category by struggling to emulate the behavior of the upper group. High consumerism usually takes place in regions that are close to poor and marginalized communities that have poor standards of living and cannot get proper food, medical attention or clean water (Muilanovic 33).
The desire for secondary goods by the middle and upper classes and that for basic needs for the lower category triggers an imbalance between consumption and demand. This leads to wastage and misuse of resources by the rich and this undermines social cohesion in the society. The irritating consumerism of the rich and the shortage of basic needs in low income societies lead to the multiplication of conflicts between the rich and poor.
In addition, it leads to increase in insecurity because the poor will struggle to get what they can afford through criminal activities like mugging, robbery and corruption (Sicherl 71). The existence of democratic governance becomes impossible because the marginalized groups will resist attempts to persuade them that the government has their interests at heart.
Irresponsible environmental destruction practices will increase because the poor and rich populations will be struggling to utilize resources, particularly, non renewable to satisfy their needs. The structure of the production system will be affected by unskilled laborers because of lack of money to pursue specialized training. It is very difficult for a society to develop if it cannot provide equal resources and opportunities for its people.
Secondly, the supply and production system of a society will suffer if it allows inequality to exist. The high consumerism of the middle and upper classes and the high poverty levels of low income earners generate a low demand that cannot consume the goods produced by production systems that aim to expand their operations. This causes an imbalance between the level of consumption of goods and services and what the society produces.
The market for goods and serviced produced through modern technology lack market and this exposes producers to stunted growth and some of them may be forced to close their companies (Kuznets 20). Development is blocked when investors spend a lot of money in production yet they cannot recover their capital because of low demand for their goods.
In addition, there are possibilities of the development of a segmented demand that pushes production systems to produce goods and services that satisfy the few individuals that can afford to pay for expensive products. This enshrines a defective social stratum that protects the interests of those that have money to buy expensive goods. The middle and lower classes are usually forced to struggle to meet the high standards set by the bourgeoisies or recede to poverty and desperation.
At the same time, the low middle-income earners limit the development of their production system because they constrain their producers to produce goods that meet their demands (Greig 44). Therefore, they cannot sell their products to the affluent communities because of their poor quality.
In addition, producers at this level do not benefit from economies of scale, specialization, improved technology and skilled employees because they have inadequate capital to expand their operations. Therefore, a significant part of an enormous production potential will be sterilized at the bottom of the social pyramid. Capital formation will be limited to the production units that serve the upper class that has a dynamic market.
Therefore, economic growth becomes stunted because of misdirected production capacity that will not produce adequate income to spur development. In addition, few businesses become capitalized and this restricts income distribution and the ability of a society to increase employment opportunities (Kloby 69). Therefore, social stability is affected because of inequalities and this compromises the security of citizens. These aspects become unstable and this threatens the survival of democratic governance.
Moreover, societies that have inequalities have low levels of savings and investments. Income and asset ownership inequality means that the upper class (usually very few individuals) recycles resources that should be invested in productive activities. They invest a significant part of their resources in speculative activities like hoarding and smuggling that are usually profitable compared to legal investments.
The proletariats will be forced to buy their products at whichever price the bourgeoisie will deem necessary because they do not have alternatives. Secondly, this practice concentrates resources in the affluent sectors and this spurs consumerism and wastes resources that should be used for development purposes (Stewart 63). Economies should recycle resources by allowing money to move from one individual to another and create utilities.
However, inequality concentrates money surpluses in a few hands and this reduces chances of recycling maximizing returns. People save their money and use it for speculative activities that slow development in societies. These practices enable assets, income and savings to concentrate and be controlled by a few individuals and this prevents people from participating in economic activities that spur development because of limited resources and investment opportunities.
In addition, they cause mismatches between production abilities of an economic structure and demand that arises from legal earnings and interests (Kloby 720. Therefore, the bourgeoisies will always have chances to manipulate financial institutions for their selfish interests and this creates favorable conditions for the occurrence of recurrent economic crises.
In addition, science and technology are indispensable aspects that spur development in societies. These issues represent powerful leverages of contemporary growth because they enable people to simplify production processes. Market opportunities and scope expand permanently when people use discoveries and innovations to improve their investments and enhance productivity. Science and technology focus on the expansion of knowledge and understanding various issues and this leads to efficiency in production processes.
This means that market for sophisticated technology and skills will expand and fetch good returns because people hope to improve their investments (Pritchet par. 4). Therefore, they will invest their resources and concentrate them on technological aspects to ensure that they are able to defeat their competitors. They ignore social and environmental needs that are important in determining the future of people living in low income areas.
The need to explore scientific innovations is usually driven by motivations to control the instruments of economic production and not maximization of returns and income. Therefore, the requirements of concentrated markets condition the scientific and technological results that are expected to benefit the society. Few individuals gain at the expense of environmental degradation, displacement of populations and a reduction of arable land in poverty stricken regions.
Social cohesion, security and proper governance are indispensable issues that enable societies to develop. Equality means that all members of the society get equal burdens, efforts and results of their actions. However, some groups, especially the upper and middle income earners, do not take their responsibilities and they dump onto the poor the costs they are supposed to bear. It is very disturbing that they are the ones who get and enjoy the largest portion of the results of economic activities in their societies.
Those in power use subtle mechanisms that cannot be understood by the poor that are usually illiterate, unskilled and inexperienced to perceive legal and economic interpretations. These uncouth mechanisms include regressive tax systems that ensure the cost of producing goods is met be consumers and differential access to learning and health care institutions (Kuznets 59).
In addition, some of them withhold information about public work contracts or investment opportunities because of their proximity to influential politicians, investors and businesses. Social inequality brings different standards of living within a society by giving some people greater opportunities while neglecting others.
This causes resentments and misgivings in societies that are supposed to be united; therefore, they hardly make any progress because of poor social cohesion that discourages dialogue and meaningful interactions. There is no way a hungry person can sit on the same table with an individual that has never understood the meaning of hunger.
Social cohesion is weakened when oppressed individuals struggle to balance their lives with those of the upper and middle classes. Conflicts between the rich and poor become a daily routine and this creates enmity in the society. Therefore, it becomes difficult for a society to develop if its members have unsettled differences and each group thinks that it deserves better treatment than the other.
Lastly, sustainable development is important in ensuring that societies achieve their objectives and everybody has access to quality and adequate goods and services. Inequality enables few individuals to control all factors of production and thus the poor have little say in development matters (Pritchet par. 7). However, sometimes governments and institutions intervene in these situations and offer loans or incentives to individuals to offset economic imbalances.
It is necessary to explain that these loans are serviced by tax payers and this means that there is no rational for exposing them to unnecessary budgets when they are unable to afford basic needs. In addition, the bourgeoisies are the ones that control financial institutions and the interests gained on loans are shared with them because they are usually the majority shareholders in banks.
People over borrow money from financial institutions and this means that they will have nothing to invest in income generating activities (Sicherl 86). The artificial maintenance of demand and supply balance is sustained by successive borrowing that exposes individuals to risks of bankruptcy. Societies cannot develop if they keep depending on loans to offset inequalities between the rich and poor.
Conclusion
Inequality hinders development because it limits investments and wastes the production potential of individuals and nations. In addition, it hinders small businesses from enjoying economies of scale and this means they will continue to produce cheap and poor goods. Moreover, it promotes irresponsible consumerism and creates conflicts between the rich and poor. Lastly, it destroys the environment and force people to rely on high interest loans to access quality education and medical services.
Works Cited
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Kuznets, Simon. Economic Growth and Income Inequality. New York: Wiley, 2012. Print.
Muilanovic, Branko. The Haves and the Have-Nots: A Brief and Idionsyncratic History of Global Inequality. New York: Basic Books, 2012. Print.
Pritchet, Lant. “Divergence, Big Time”, Journal of Economics Perspectives. 31 Oct. 1997. Web. <www.cas.umt.edu/econ/documents/courses/advecondev/prichett>
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