Drawing a Greed Line to eradicating poverty, reducing social inequality and achieving a future
sustainable society
Carlos Larrea, UASB
Individual greed can be defined as the desire to accumulate material wealth beyond what is needed and
what may be considered the legitimate share of a person in a given society.
Structural greed refers to “the institutional arrangement aiming at the excessive accumulation of goods,
means (especially capital) and power which results in structural deprivation of the conditions of life in
dignity for the majority of people”, including current and future generations (Raiser, 2012).
There is no doubt that global per capita income, which has reached 9,120 dollars1, is more than 8 times
higher than the poverty line. Therefore, elimination of global poverty may be reached by an adequate
social redistribution of wealth.
However, according to the World Bank, 2,600 million people, or 40% of the world’s population, is
affected by poverty; among them, 1,440 million people are suffering extreme poverty.2
Global social inequality is abysmal. About 4620 million people, accounting for two thirds (66%) or the
world population, is poor or vulnerable, and receive less than 4 dollars per day, with a total participation
of only 14% (one seventh) of the world income. On the opposite side, the richest 10% of the world
population concentrates 61% of world income.
Additionally, the global accumulation process leads to an increasingly unsustainable extraction of
resources from the planet, resulting in global pollution, climate change, reduction of the ozone layer, the
irreversible loss of biodiversity, soil exhaustion, the unsustainable use of water and sea resources, etc. The
current expansion of economic activity outweighs the planetary capacity to support it, so future
generations will be affected by current structural greed and luxurious consumption.
It is therefore essential, for ethical and theological reasons, and because of the need to build a sustainable
and equitable future, to work for a profound change involving the progressive distribution of wealth
(national and international) and the elimination of unsustainable sumptuary consumption.
Excessive sumptuary consumption is currently possible only as a condition of the massive exclusion from
the right to a decent life of both currently deprived people and a fraction of future generations, given that
world consumption has already surpassed the planet’s sustainable regeneration biocapacity.
Various ecological economics theoretical and empirical studies show that, from a certain point forward,
greater consumption does not increase welfare, but rather reduces the possibilities of satisfying the human
needs of future generations.
1
2
UNDP. Human Development Report. UNDP: New York, 2010.
Ibid.
The Greed Line has been defined as the maximum morally acceptable individual consumption level in a
given historical context, above which any increase in individual consumption is negative for society
and/or future generations and nature.
The Greed Line can be estimated as the maximum individual consumption that does not reduce the social
welfare of the current and future generations. All personally generated income above the greed line must
be redistributed and invested in two goals: eliminating poverty and restoring the economy to its
sustainable limits.
The new society will pursue the universal fulfilment of human rights, including social rights for
appropriate education, health, nutrition, employment, and shelter, and political rights for adequate
participation in society, with freedom of thought and respect for cultural diversity. A new paradigm is
also required in which human kind will conceive of itself as an integrated and organic element of a living
universe, and human realization cannot be regarded as feasible beyond ecosystem limits (Boff, 2012,
Boff, 1997, The Earth Charter Initiative, 2009). The recognition of rights for nature, as stated in the
Ecuadorian Constitution, is an important principle of the new paradigm (Asamblea Constituyente, 2008).
A new society, in which personal sumptuary consumption will be regulated and redistributed, and will not
be higher than the greed line, may provide an effective way to achieving poverty eradication and
inequality reduction, as well as fostering a transition towards a sustainable economy for future
generations.
According to scenarios based on simulations, a redistribution of only 18% of global GDP, from the
richest 10% of the population to poor households, coupled with an adequate and participative social
development strategy to empower poor communities, will be able to eradicate poverty in a short period of
time. A similar transfer can substantially contribute to the transition towards a sustainable society, with
investments in renewable energy, clean technologies, and biodiversity conservation.
A greed line equivalent to 105,000 per capita PPP 2005 dollars per annum and a progressive
redistribution of individual incomes above an adequate human consumption line of 22,760 PPP dollars
per capita per annum were taken for simulations. Those lines were defined, based on a detailed analysis of
the evolution of social inequality and consumption patterns in the current neoliberal world economy. The
greed line will allow a redistribution of the excessive income appropriated by the top 10% of the world
population during the neoliberal periods, form the 1970s onwards.
To monitor structural geed, a set of 11 greed indicators, available for 128 c0untries in the world, has been
selected. They deal with three dimensions: first, capital accumulation and cumulative economic growth;
second, social inequality and exclusion; third, lack of environmental sustainability, and last, poverty.
The analysis leads to ¿the identification of four groups of countries.
Wealthy countries. This group includes 48 countries, with about 24% of total world population, which
concentrate 62% of total GDP and 55% of total CO2 emissions from burning fossil fuels. Both per capita
GNI and per capita CO2 emissions are the highest among the groups, as are life expectancy and years of
schooling. The group simultaneously concentrates most of the planet’s wealth, the best social conditions,
and CO2 emissions. Within-country social inequality is the lowest, but the ecological footprint ratio is the
highest. Environmental and social indicators suggest that this group concentrates wealth in an
exclusionary and non-sustainable way. Most of the counties are OECD members, 20% are in Eastern
Europe, and a small group is in the Middle East.
Most unequal countries. The group, constituted by 20 countries, stands out for the highest social
inequality in the world. The top 10% of the population concentrates 42% of income, while the bottom
10% receives only 1%. The Gini coefficient is also the highest. The group is concentrated in Latin
America and Sub Saharan Africa to a lesser extent. The group integrates 10% of the world population and
a similar proportion of global GDP.
Less Sustainable countries. This group shares two traits. First, countries have an ecological footprint
about twice its biocapacity, meaning that their internal natural area is already utilized or overexploited,
and that they are taking natural resources from abroad. Second, the group manifests a trend toward
accelerated economic expansion, with a very high net savings rate. The combination of rapid economic
growth with structural internal environmental limits suggests limited sustainability. The most important
country in this group is China, and countries such as India, Bangladesh, Philippines and Pakistan are also
included. The group, with 15 countries, accounts for most (57%) of world population and generates about
24% of global GDP.
Poorest countries. This group, integrated by 21 countries with 8% of world’s population, generates only
1% of global GDP. Per capita GNI is 21 times lower than that of wealthy countries. Poverty reaches the
highest levels, and social achievements are critically low. Life expectancy at birth averages only 57 years,
20 years less than wealthy countries.