Global economic system; a consequence of Socio-economic inequality


Capitalist economic system is the main cause of social and economic disparity across the world. United States led global economic system has no doubt produced enormous developments that had reduced extreme poverty, but due to the few advanced economies inequality in income and wealth has surged. The system of free and open market, which has increased the involvement of private owners and ultimate exploitation of poor countries is a factor deepening this inequality across the globe. Privatization of utilities has increased the grave risks of concentrating wealth, creating a vicious cycle of inequality, frustration and discontent across generations. Rapid advances in areas such as genetics, as well as robotics and artificial intelligence, are transforming societies at a considerable pace. Digital revolution on the other hand, has created enormous amount of wealth for those with skills, but has eliminated the middle skill jobs. Computer software and industrial machines now has filled roles from clerical tasks to routine manufacturing rendering the unskilled and workers without degree vulnerable to the capitalist system.

A trend has been following since decades which show that rich are getting richer and poor ones are getting poorer. Rich 1% populace of the world possesses 43% of the world’s capital.  This unbalance is regulated by rich countries by aiding and lending the poor states and these loans and aids are never without strings attached, it puts the developing world into a vicious cycle of debts that proves to be havoc for the development and growth of the developing states. In light of the current COVID’19 pandemic, we have clearly seen the economic disparity between the global north and global south. Global south is not only vulnerable to the threat posed by deadly virus, but at the same time it also has to cope with its capital needs to overcome the crisis and the major hurdle for developing states in the pandemic situation has been the debts in which the countries are indebted. These inequalities of the world are causing serious social and economic ramifications and to overcome such discrepancies west should share the technology rather than selling its machinery to growing world so that the states could wear-off their burden and moved towards sustained growth.

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