Inequality as persistent injustice | Article by Mario Luis Fuentes

Mario Luis Fuentes

One of the greatest innovations that Juan Luis Vives introduced during the Spanish Renaissance in his text “On the Relief of the Poor” was the implicit question of who or who was responsible for poverty, destitution and inequality. The answer he proposed was also new: it is the State and the “Crown”, as the synthesis of its maximum power, that must carry out actions that will allow all its inhabitants to serve the maximum goal of the Catholic State: to guarantee the happiness of the people and create the conditions for a right life and at the same time gaining access to salvation.

Vives’ question, 500 years after it was raised, must be asked repeatedly: who is responsible for the enormous poverty and untold inequalities that exist in our region? Because, at its core, Latin America and especially Mexico are regions that have historically been trapped by structural inequality, chronic poverty and limited social mobility.

ECLAC returns to these issues in its latest report, entitled Social Panorama of Latin America and the Caribbean 2024, in which the organization emphasizes what is already known: inequality is not only a flaw in the economic system, but also a systemic mechanism that perpetuates control. few due to resources and majority of the population. From this perspective, we must insist that this problem is not an accident of history, but rather the deliberate result of power structures seeking their own perpetuation.

The cited document highlights that in 2023, although poverty has reached its lowest level since 1990 (27.3% of the population), inequality as measured by the Gini index remains at an alarming level (0.452 on a scale of 0 to 1). This shows that a slight improvement in the poverty situation does not mean significant progress in building a new logic of equality in the region. Faced with this, one might think that this may only be a temporary effect and that the fragility of the region’s development strategies is such that there is a greater likelihood that poverty will return in the coming years than that a virtuous circle will be created. greater equality accompanied by better conditions of well-being.

This is why it is important to be able to see this stagnation as an expression of an economic structure that, instead of redistributing wealth, concentrates benefits in the hands of economic and political elites. This becomes much more obvious when we consider that in Latin America poverty is intertwined, for example, with individual, territorial and ethnic characteristics, which consequently exacerbate inequalities between men and women; between the adult population and children’s childhood; and between non-Indigenous people and Indigenous peoples and communities.

This is not a coincidence: it reacts to a productive matrix that has historically marginalized and exploited the most vulnerable sectors, perpetuating a model that precisely requires the maintenance of these structures of inequality in order for them to function as they have done so far, because if anything characterizes the region , then this is the predominance of systemic protection mechanisms and tax breaks for those who have the most.

Although the report highlights progress in non-contributory social protection policies such as cash transfers and pension systems, from a critical perspective these policies are clearly insufficient. Although 27.1% of the region’s population benefited from these transfers in 2022, the amounts do not meet standards of decent living conditions, resulting in a narrowing gap between the incomes of poor households and the wealthiest groups. These measures, rather than correcting inequality, act only as palliatives that increase the dependence of the popular classes on the state without changing the structural conditions that give rise to poverty.

Lack of financial sustainability and weak institutional frameworks for social protection systems also reflect a political lack of interest in transforming patterns of inequality. As part of the care and aging crisis, this shortage results in the reproduction of gender inequality and the abandonment of vulnerable sectors such as people with disabilities, or large sectors such as the aforementioned girls, boys and adolescents.

In this sense, ECLAC criticizes the limited impact of these transfers, which often fail to cover the gap between the incomes of the poorest households and the poverty line. It also notes that non-contributory pension systems, while important for older people in contexts of high informality, offer significantly fewer benefits than funded systems, perpetuating, even in undesirable ways, inequality.

Another key point highlighted by ECLAC is the segmentation of access to social protection. While households in the lowest income quintile mostly access it through non-contributory policies (50.2% in 2022), households in the highest income do so through contributory mechanisms. This highlights deep inequalities, with the most vulnerable households dependent on less stable systems with less coverage.

Segmentation is also reflected in the overall coverage of social benefits. In 2023, only 61.2% of the population was covered by at least one social benefit, leaving a significant percentage of people without any type of protection or benefits necessary to live in adequate conditions of well-being.

ECLAC also highlights the lack of financial sustainability of social protection policies. Although social spending stopped falling in 2023, it remains insufficient to guarantee adequate benefits, especially in the face of recurring economic crises, low growth rates, the prevalence of fair and efficient distribution systems, and high inflation.

In addition, he criticizes the weak institutional framework of social protection systems in many countries in the region. Lack of technical, operational, policy and perspective (TOPP) capacity among responsible institutions limits their effectiveness in implementing and monitoring comprehensive and sustainable policies. The situation is exacerbated by the lack of integrated, high-quality statistical information systems and diagnoses that are comprehensively relevant to the social world, which can effectively identify vulnerable populations and formulate appropriate responses.

Another important question is that all these mentioned phenomena, which, as can be seen, are interconnected and interdependent, are not “simple defects of the system,” but, on the contrary, one of its functions; as the model of capitalism prevalent in the region requires cheap and unprotected labor to maximize benefits.

In addition to the above, the persistence of regressive fiscal systems, in which the richest sectors of the economy contribute less proportionately than the poor, reinforces these dynamics of uneven accumulation. Thus, redistribution policies are not only inadequate, but designed to maintain, in effect, the consolidation and strengthening of the status quo.

To begin to reverse all of the above, ECLAC mentions the urgency of moving towards universal, inclusive, resilient and sustainable social protection systems. But this requires not only expanding coverage, but also changing the basic logic of the economic system.

It is critical to adopt an approach that not only recognizes structural inequality but also addresses its roots, which will mean from the outset:

• Deep tax reform: progressive tax systems that effectively redistribute wealth.
• Sustainable economic development: production models that prioritize social welfare over private profit.
• Decent employment policies: labor legislation that guarantees decent wages and universal access to social security.
• Empowering vulnerable communities: policies that enable self-determination for indigenous communities, women and other marginalized groups.

In short, the fight against poverty and inequality in Latin America cannot be limited to more superficial measures; What is urgently needed is a radical break with the structures that perpetuate injustice.

The figures presented by ECLAC are not only a diagnosis, but also a call to action aimed at real social transformation that breaks down the foundations of inequality. Without these profound changes, any progress will be only apparent, perpetuating a system that lives by exploiting the many for the benefit of the few.

Researcher at PUED-UNAM