Economic Inequality

The economic inequality input to the Arda Index is the Gini Index published annually by the World Bank Research Development Group. The data inputted into the Arda Index is derived from an annual global average of the inequality within individual countries.

The Gini Index measures inequality in societies through the distribution of income (relative wealth) among individuals or households. The Gini Index ranges from 0, indicating perfect equality (where everyone receives an equal share), to 100, perfect inequality (where only one recipient or group of recipients receives all the income).

While there are many economic indicators we could have selected, our laser focus on human flourishing and social cohesion means that inequality is the logical lens through which to view the economic input into the Arda Index.

Research has linked income inequality to social and political unrest (Social Cohesion). While modern examples such as the Arab Spring to the Gilets Jaunes to Occupy Wall Street, have had varying levels of long-term impact, history suggests that destructive social upheaval has been humanity's natural response to unsustainable levels of inequality. When societies reach a point in which entire swathes of fellow citizens are told to "eat cake," the subsquent series of events are typically dire.

It is indisputable that a degree of economic inequality is an essential component of capitalism. The capitalist virtue of meritocracy drives productivity as a straight line is drawn between labor output and quality of life. It is important to highlight that we do not intend to disparage wealth creation or imply that modern advances we all enjoy could have been achieved without a significant profit motive.

However, by the same token, we are of the belief that the long-term sustainability of society is inextricably tied to the gap between the richest and the poorest remaining reasonably navigable. Social despair occurs when the top feels too far out reach, while the most successful amongst us are best served by not living lives completely isolated from the fellow citizens.