It is basically a write up comprising the connotations and effect of inequality on an economy.

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Inequality and Modernity – Blessing or Curse for
Development
How modernity and inequality is considered from the lens of
development?
Introduction:
Hardly anyone can be found in this world who doesn’t want to be developed to any extent.
Attaining development, achieved by following a certain way is becoming a race where many
nations are lagged behind whereas others are far away. Some nations have slow speed of moving
forward and some has faster. Development, a term introduced in 1949 by 33rd U.S. President Harry
S. Truman, is considered as a holistic process where the developed ones tries to develop the others
the way they (developed) were became developed (Rist, 2008). Keeping one side lagged, nothing
can never be achieved; thus, faster growing countries are trying to help others by many means e.g.
establishing international organization bodies like UNDP, World Bank, IMF etc.
Now, the first world countries are trying to ‘Modernize’ the third world countries with the help of
international organizations keeping the concept of eradicating poverty and inequality in the center
(Rist, 2008). It might be said that many Western governments - particularly former colonial
powers, trying to use the modernization process as a continuation of the late colonial mission
helping to develop colonial peoples within the concept of trusteeship (Cowen and Shenton, 1995;
Chapter 2). Despite such arguments, still modernity is praised by many states as it possesses
industrialization, globalization, technological advancement etc.
Another contemporary term, ‘Inequality’, considered as a great hindrance for development, not a
very good news, sustains despite the trying of international bodies like UNDP which questions the
intention of them. Surprisingly, inequality by some scholars is considered as a way to development
to some extent specially in the initial stage of development, illustrated in Kuznets’ Inverted- U
Hypothesis (Rahman, 2017).
So far, many arguments have made regarding modernization and inequality where some scholars
considered these bad whereas few others talked in favor of these.
I argue that, may be to some extent inequality and modernization are good but these are indeed a
way to exploit the poor headed by the First world intentionally to keep their dominance constant
– a formation of ‘neo-colonialism’ (Potter, Binns, Elliott & Smith, 2008). To me, modernization
and inequality, both the concept, are indeed, significant for development to a great extent but both
need to be balanced and shouldn’t be practiced attaining personal or own nation’s benefits like
how recently it is being practiced under dominant paradigm of development.

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Modernization - A Toolfor Development or A Way to Exploit?
“Modernism may be defined as the belief that development is all about transforming
‘traditional’ countries into modern, westernized nations. Viewed in this light, it is
undoubtedly true that the genesis of much modern(ist) development theory and practice lay
in the period between 1945 and 1955.” - Potter et al. (2008)
Modernization “is often used to refer to the stages of social development which are based upon
industrialization. Modernization is a diverse unity of socio-economic changes generated by
scientific and technological discoveries and innovations. . .” (Sarup 1993).
From the above-mentioned definition, we can say that modernization nothing but a way to develop
the whole world specially in terms of technological and industrial advancement. Modernization or
modernity as a key to development is considered by the western scholars who basically trying to
make the third world following the ‘Modernization Theory’ given by W. W. Rostow. Besides,
looking to the speech of President Truman of 1949, he quoted that how the underdeveloped world’s
poverty is ‘a handicap and threat both to them and more prosperous areas. Greater production, he
noted, as the key to prosperity and peace and the key to greater production is a wider and more
vigorous application of modern scientific and technical knowledge, indeed’ (Porter, 1995: 78).
Modernization, indeed, an ‘Eurocentric and Generalized’ concept, not a very good news, causing
underdevelopment instead of development followed by many problems like inequality, increasing
poverty etc., completely an alter scenario that it should be, probably intentionally.
According to Rostow (1960), “Economic modernization begins with the establishment of essential
preconditions for an economic take-off.”
Korea can be considered one of the success stories of the implication of Rostow’s theory when
they were under the Japanese colonization. The necessary infrastructure was built, agriculture was
marketized, and a modern civil service was instituted in Korea during it’s colonial period under
Japan. The take-off of Korea took place to the early 1960s when American aid contributed a lot
as that time was very vulnerable for Korea. An unfavorable balance of trade might otherwise have
damaged South Korea’s take-off from where the American Aid rescued them.
1970s and early 1980s was the time when Korea became what Rostow calls a “mature” economy,
that is, a diversified, technologically modern economy, indeed, a win of Rostow (Rostow 1960).
According to Chirot (2005), “Rostow suggested, first, that the way in which some Western
societies, primarily Great Britain and the United States, have developed corresponded to a general
pattern that had to be followed more or less by everyone.”
Counter of this quote is nothing but the Asian Miracle itself which took place during 1960s. Asian
miracle took place without following the modernization process or adopting westernization model.

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Despite, the 4 Asian Tigers got developed by the avoidance of any protectionist tendencies rather
emphasized on export for a holistic economic growth and development (McKay, 2008).
This 4-little dragon got developed through industrialization, which is a result of modernity but
didn’t follow the modernization process of Rostow which can be interpreted as, ‘Few results of
modernity is useful for development but not the modernization as a whole, indeed.’
To me, modernization is important, a way of development but practiced wrongly. Few outcomes
of modernity might be good for the world but the intentions, indeed can be said from the above
stated arguments, not at all good. The speech of Truman comprises lots of good words but the
thing is, all these are done to revive the lost colonial power under trusteeship in the form of neo-
colonialism. (Cowen and Shenton, 1995; Chapter 2).
Inequality – An Obstacle or A Way from The Lens of Development?
In general, inequality is considered as an obstacle for development as it denotes the unevenness of
anything. From the development perspective, inequality basically means the income inequality
which is considered as a threat for the economy of any state.
One question might be asked that, ‘What’s so bad about extreme inequality?’ Answers might be,
➢ Extreme inequality leads to economic inefficiency and curtails growth,
➢ Extreme inequality undermines social stability and solidarity,
➢ Extreme inequality is viewed as unfair.
To illustrate the income and wealth distribution inequality, ‘The Lorenz Curve’ is used which is a
graphical representation of income inequality or wealth inequality developed by American
economist Max Lorenz in 1905 (Staff, 2017). “The Gini coefficient1 is used to express the extent
of inequality in a single figure. It can range from 0 (or 0%) to 1 (or 100%). Complete equality, in
which every individual has the exact same income or wealth, corresponds to a coefficient of 0.
Plotted as a Lorenz curve, complete equality would be a straight diagonal line with a slope of 1
(the area between this curve and itself is 0, so the Gini coefficient is 0). A coefficient of 1 means
that one person earns all of the income or holds all of the wealth. Accounting for negative wealth
or income, the figure can theoretically be higher than 1; in that case the Lorenz curve would dip
below the horizontal axis.” - Staff (2017). This Dualistic Development and Shifting Lorenz Curves
has Some Stylized Typologies:
➢ Traditional sector enrichment growth typology,
1 The Gini coefficient - a statisticalmeasure of distribution developed by theItalian statistician Corrado Gini in 1912. It is often
used as a gauge of economic inequality, measuring income distribution or, less commonly, wealth distribution among a
population. Thecoefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect
inequality. Values over 1 are theoretically possible due to negative income or wealth. Staff (2017).

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➢ Modern sector enrichment growth typology,
➢ Modern sector enlargement growth typology (Rahman, 2017).
Figure 1: The Lorenz Curve (Rahman, 2017).
While Lorenz Curve and Gini Coefficient are talking about income inequality, an interesting and
surprising hypothesis was given by Simon Smith Kuznets2 (1955) that is, the income inequality
initially rises with economic development but after reaching its maximum it subsequently falls in
advanced stages of economic development (Melikhova & Čížek, 2014). Undoubtedly the Kuznets
inverted U-curve hypothesis is considered as one of the most influential statements on inequality
and development, indeed (Moran, 2005).
2 First suggested theexistence of a general relationship between the income inequality and theincome per capita (Melikhova &
Čížek, 2014).

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Figure 2: Kuznets U-curve (Rahman, 2017).
Now a controversy arises about the interpretation of inequality, interesting indeed. Now we will
try to show the sustenance of the hypothesis.
Aghion and Bolton (1997) attributed the Kuznets U-curve tried to illustrate the market
imperfections, definitely causes different behavior among the poor and the rich:
➢ In early stages of economic development, the rich get richer, while the poor remain poor,
➢ Later, stages of economic development showed the accumulation of wealth by the rich
people pushes down their interest rates and allow the poor to become richer.
Other than this,
Anand and Kanbur (1993a), Williamson (1991) and Barro (2000) complied to some extent with
this hypothesis (Melikhova & Čížek, 2014).
According to Melikhova & Čížek (2014),
“Although many theoretical models can predict the Kuznets U-curve, empirical evidence
for thevalidity of the Kuznetshypothesis is still a matterof controversy.Empirical research
on the validity of Kuznets hypothesis was performed by many authors during last 30 years,

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but obtained results are controversial and not conclusive. Ahluwalia (1976) in his early
work found support for the Kuznets hypothesis. However, Anand and Kanbur (1993a) re-
analyzed later the same data as Ahluwalia (1976) and did not find any evidence supporting
the Kuznets hypothesis. In addition, Anand and Kanbur (1993b) analyzed also additional
data than those used by Ahluwalia and again did not find any evidence for the Kuznets
hypothesis. Deininger and Squire (1998) performed both cross-country analysis and
examination of country specifi c time series. They did not find any support for the Kuznets
inverted U-curve neither in the cross-country analysis nor in the country specific inter-
temporal data. On the other hand, Jha (1996) analyzed observations for 76 countries for
the period 1960-92 and found that Kuznets hypothesis holds. Similarly, Milanovic (2000)
reported that Kuznets hypothesis was supported by data for 80 countries during the 1980s.
Bulir (2001) came to similar conclusion from analysis of cross-sectional data for 75
countries. Parametric and semi-parametric testing of Kuznets hypothesis performed by Lin
et al. (2006) on the same data as Bulir (2001) gave also support for the Kuznets hypothesis.
But recently Tam (2008) analyzed ‘high quality’ data for 84 countries and did not find any
support for the Kuznets hypothesis.”
The empirical test of the Kuznets hypothesis which was performed on data for 145 countries in the
period 1979-2009 was found the strong influence of social contribution on income inequality.
The inverted U-curve was found in the countries with low amount of social contributions whereas
the inverted U-curve flattens with the increasing of social contribution by the contributors. The
maximum decrease and position of the turning point is shifted to higher GDP per capita
(Melikhova & Čížek, 2014).
Lastly, analysis may suggest long standing controversies regarding the existence or non-existence
of the Kuznets inverted U-curve due to the denial or ignore the various amount of social
contributions, not surprisingly influence the income inequality much more than the level of
economic development (Melikhova & Čížek, 2014). Due to all these lacking, we can’t mention
the hypothesis as a firm and lucid conceptual framework of inequality, which to a great extent
taken us back to the traditional concept regarding inequality which counts it as an obstacle but yes,
the hypothesis helped to understand the facts more precisely, indeed.
Now one might ask that, what is so bad about inequality where the answer might be, ‘fearlessness
of losing anything,’ that means, the deprived people has nothing to lose which led them to fight
for their rights with their utmost, not a very good news, bring more instability in the society which
is extremely negative for economic growth followed by sustainable development (Rahman, 2017).
In the conclusion, we can say that, in the initial stage, Kuznets’ U hypothesis may have a positive
impact over the economic growth but mostly inequality brings underdevelopment followed by
decreasing economic development, need to mitigate as soon possible.

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Conceptualizing Inequality and Modernitywith The Lens of Development– An
Analytical Overview from My Perspective:
Modernity, to me, nothing but a way to exploit the poor countries and a way, indeed which indulge
the poor in extreme poverty.
In the name of modernization, they are
➢ Degrading the environment which ultimately harming the third world countries specially;
➢ Selling their products their products to us with a high rate to increase their profit margin;
➢ Taking our cheap labor as well to boom their economy;
➢ Involving in our political issues and controlling;
➢ Exploiting us by trade negotiations through trade barrier on agricultural goods declared in
DOHA Trade Negotiation Round arranged by WTO;
➢ Giving FDI and putting der Debt crisis;
➢ Taking steps like structural adjustment to recover the debt crisis which simply breaks the
economy of any third world country;
➢ Encouraging Brain Drain to make poor nations inferior both in the short and long run, etc.
A lot of issues are there like this by which the First world is exploiting us in a huge manner in the
name of ‘Modernization.’ Indeed, the first world is trying to establish the colonies in a developed
manner.
I finally argue that, may be to some extent inequality and modernization are good but these are
indeed a way to exploit the poor headed by the First world intentionally to keep their dominance
constant – a formation of ‘neo-colonialism’ (Potter, Binns, Elliott & Smith, 2008).
Regarding the case of inequality, it has to be countered by us, where no other has any role to play,
I believe. It is our indigenous problem that how much we will give importance to the female as
well the poor in terms of gender and income inequality. We can take the Asian Miracle as a role
model to develop ourselves instead of western one.
However, in the lens of development, I believe, modernization is a good thing but wrongly driven
to attain personal or indigenous benefit; and inequality is, indeed an obstacle not fully, but to a
great extent which has to be countered in no time to attain a sustainable development for the better
future, better world.

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Conclusion:
From the above stated arguments and analysis, it is clear that modernization and inequality, not
fully but in a great manner, affecting the process of development.
Modernization, a westernized terminology, Eurocentric and highly Generalized, indeed, invented
to exploit the poor by making doctrine. Success and Failure history, both are available regarding
modernization. Asian Miracle, a big achievement against the dominant paradigm followed by
modernization can be adopted for the betterment where alternative paradigm is preferred to follow
with the 100% denial of false paradigm.
A trade off is often found in between economic growth and inequality, to some extent a good thing
but need to be balanced neither economical degradation is must. Both gender and income
inequality should be countered to make the Lorenz Curve shifted towards the betterment. U
hypothesis may be attained but up to the necessary level where strict monitoring is must, I believe.
Moreover, it is the political sustainability, good gover4nance and high professional ethics which
can lead to the highest peak of development. It is the government who need to be generous and
responsible to its people neither, govt. itself will be a cause of underdevelopment. I believe, it is
the willingness which can turn every bad thing good and vice-versa.