Excerpts from “Human Development and Wealth Distribution”

– “More unequal countries have worse social indicators, a poorer human development record, and higher degrees of economic insecurity and anxiety. In too many countries, inequality increased and real wages stagnated—failing to keep up with productivity—over the past few decades. Ominously, inequality in the United States was back at its pre-Great Depression levels on the eve of the crisis.”

– “Fundamentally, the growth model that co-existed with globalization was unbalanced and unsustainable…. Inequality may have actually stoked  this unsustainable model. In countries like the United States, borrowing seemed to allow ordinary people to share in the rising prosperity…. Inequality could also be behind the Chinese export-oriented model, since solid domestic demand needs a healthy middle class, while a low exchange rate goes hand-in-hand with a low real wage.”

– “Tax and expenditure policies can support fairness and economic stability. Adequate social safety nets are essential, including decent unemployment benefits. And here, the IMF is working closely with the ILO on the concept of a social protection floor for people in poverty or vulnerable situations…. Progressive taxation can also promote equity through redistribution, and this should be encouraged.”

– “We should also make sure that workers have adequate bargaining power, especially if this lies at the root of rising wage inequality. Collective bargaining is important. But we must avoid dual labor markets that create stark divisions between protected insiders and excluded outsiders.”

– “The mandate of the IMF is economic and financial stability, the sure foundation of human development. We care about inequality not only on grounds of common decency, but because inequality threatens this stability…. To achieve this goal, we need the openness delivered by globalization, but we also need global growth that is equitable and stable. We need a new globalization.” –Dominique Strauss-Kahn, Managing Director, International Monetary Fund