Inequitable distribution of wealth

The distribution of wealth in societies can be understood in many modes and manners. The form of distribution of land ownership, for example of agricultural land, was for a long time one of the main criteria for understanding equity or inequity in a given society. Income distribution in agrarian or traditional societies should be analysed principally by the way in which ownership is distributed, and, consequently, by the use of systems of personal services. In modern societies, especially at the end of the last century, it was considered that "ownership of the means of production" was the principal phenomenon and that it affected all aspects of social life and culture. Today it is not uncommonly considered that the most important factor is the way in which cultural goods, knowledge and information are distributed, and the informal networks of relationships between people. Obviously these discussions are absolutely beyond the practical scope of a study on income distribution and human rights. It is for this reason that a definition permitting a much more neutral and operational understanding of the concept has been adopted. By income distribution at the international level we mean the way in which the overall product (the sum of physical production, services and trade) is distributed between the countries of a region or a group of selected countries. Income distribution at the national level in a given society would consist in the way in which the overall product produced by the national economy within a year is distributed between the households that comprise and compose that society. Accumulated capital, properties and knowledge acquired are only taken into account in this operational definition in so far as they represent actual income for the families or households that constitute the unit of analysis.

The method of understanding distribution and income at the international level consists simply in comparing a country's annual product with the global product of the region or group of countries in question. At the national level household incomes will determine how the national product is distributed internally. This operational method, used by consensus to measure income distribution, obviously has many limitations in that it does not account for a large number of production, trading and service activities that are not included in the "national accounts" or "household accounts". Semilegal, clandestine or simply illegal and criminal lucrative activities remain outside these accounting systems and in some cases represent substantial shares of the income of both countries and individuals. Some maintain that household income accounting is simpler at the lowest income levels, while at the higher levels it is more difficult because of the complexity and tax avoidance. Thus there are many methodologists who maintain that all income distribution figures are thereby devalued and should be still more concentrated.

This operational manner of conceptualizing distribution enables it to be understood whether income is more or less concentrated in a society. The population, the indicator most often used, is divided for this purpose into five quintiles (20% of the population) and various comparisons are made between them. The most common is comparison of the top quintile with the bottom quintile. Because of its neutral and relatively objective nature, most specialists regard this as "a good indicator of equity" and it is currently the one most widely used. Because of its non-value and neutral character, it is a "relative indicator" valid only for comparative analyses. This indicator is best used with historical series in the same country. Hence it is not possible to say what is the "ideal income distribution", since this will depend on the type of society, the nature of its historical development, and a very complex series of factors.

While it is not possible to determine "ideal" income distribution, it is possible to signal when situations are occurring where the high concentration of wealth in a few hands is producing devastating social effects with consequences so serious as to threaten the "social integration" of the society in question, or at the international level, the balance of a given region. "Intolerable levels of income inequality" would arise if there were systematic growth of inequity in a society (or at the international level) with a crude concentration of product in the hands of one group or sector of society. From a human rights perspective, it is generally felt that this would entail violation of the economic, social and cultural rights of the population, incurring permanent discrimination and violation of the fundamental rights of individuals.