By Carlos Alberto Montaner
Is the cup half empty or half full? It depends. According to Bernie Sanders, 1% of society gets rich exponentially while the poor, 40 million Americans, 13% of the census, lack the resources to have a decent life.
Is that true? It also depends on what one calls a “decent life.” Poverty in the United States is measured by income. A family of four who receives less than $25,000 is considered “poor.” But it is a relative poverty. That family has homes and public schools. Vouchers to acquire food without cost. Electricity, telephones, drinking water, Internet. Cars and paved streets. Police protection and a judicial system with ex officio lawyers representing victims and perpetrators.
On the other hand, unemployment in the United States continues to decline. That is magnificent. It continues to be the country of opportunities, as shown by the flood of legal or illegal immigrants who arrive annually. However, a CEO of a major company earns 312 times a year what an average employee perceives. That is problematic and reflects what the Gini Index dictates: the richest 20% of the nation gets much more wealth than the poorest 20%.
Corrado Gini was a fascist Italian statistician who, in 1912, more than a century ago, designed a formula to establish the division of income among the quintiles of any society. (In time, the mathematician abandoned fascism). Supposedly, the Gini Index or Coefficient measures the equity or equality that reigns in the analyzed country. Grosso modo the most egalitarian region is Scandinavia and one of the most unequal is Latin America.
There are many cultural, geographical and historical variables that convert these indexes of inequality into real conceptual obstacles that the demagogues wield constantly. “The Gini” is almost useless. Two of the most “unequal” nations are, precisely, Panama and Chile, which have grown the most in the region and are the closest to full employment.
But, when one proudly shows what is happening in Chile, the adversaries are quick to mention the rancorous fact that Chile and Panama have a Gini Index above 50, while the Scandinavian nations have less than 30. According to this coefficient, 0 would be absolute equality and 100 total inequality. Cuba, a country in which almost everyone lives miserably, has an index of more than 40 and most of the population dreams of settling in Chile or Panama, let alone in the United States, whose “Gini” is 45.
Perhaps the Human Development Index (HDI) published annually by the UN is more reliable. It is more complete. It considers three factors: per capita income levels, schooling levels and life expectancy. Spanish economist Leandro Prados de la Escosura, quoted by another leading economist, Juan Ramón Rallo, measured the inequality between countries from 1870 to 2015 and found that, although the populations were diverging in monetary income, they got nearer in schooling and life expectancy. (The review of Prados de la Escosura’s work by Rallo can be found at the Cato Institute).
But the HDI is not enough either. It lacks an analysis of the differences between those who live in the capital or in the most distant areas. A salaried employee in Buenos Aires receives almost twice as much as one who does the same job in Jujuy or Salta. The same happens, for example, between Mexico City and Chiapas. And it lacks the sign of migrations, and of the personal development opportunities presented by large cities when contrasted with rural areas, because an efficient way to explain “social mobility” in detail has not been found. We know that it exists and characterizes the American society, and, in general, the market societies, but there is no way to measure it properly.
Between Thomas Piketty, the king of the pessimists, author of Capital in the 21st Century
, and Steven Pinker, author of Enlightenment Now: The Case for Reason, Science, Humanism, and Progress
, I remain with the optimists. Overcoming the obstacles, we live in an increasingly better world.Carlos Alberto Montaner is a journalist and writer. Born in 1943 in Cuba and exiled, Montaner is known for his more than 25 books and thousands of articles. PODER magazine estimates that more than six million readers have access to his weekly columns throughout Latin America. He is also a political analyst for CNN en Espanol. In 2012, Foreign Policy magazine named Montaner as one of the fifty most influential intellectuals in the Ibero-American world. His latest novel is A Time for Scoundrels. His latest essay is "The President: A Handbook for Voters and the Elected." His latest book is a review of Las raíces torcidas de América Latina (The Twisted Roots of Latin America), published by Planeta and available in Amazon, in printed or digital version.