The Divide by Jason Hickel

How to use this guide

Jason Hickel’s The Divide: A Brief Guide to Global Inequality and its Solutions is the required text for EVEN 2909. It is organised in four Parts, and this guide follows the Parts rather than the chapters. Each section gives the argument in brief, the key claims and numbers as Hickel states them, the terms he uses, a handful of verbatim passages with PDF page references, discussion questions, and a set of “push back” prompts for reading critically.

Read the Part before the class in which it is discussed. Bring one passage you found persuasive and one you doubted. The push-back prompts are not a verdict on the book; they are where the discussion usually gets interesting.

Discussed in class Thu 10/1 (Week 7), together with the Star Power debrief. The Star Power lab asks you to read these chapters before the game.

The argument in brief

Hickel argues that “development” began as a public-relations idea in Truman’s 1949 inaugural address and grew into a story that explains global inequality in a way that lets rich countries off the hook: poor countries are simply “behind,” and aid plus good advice will bring them along. Chapter 1 sets that story against the history of colonial extraction, the coups and structural adjustment of the twentieth century, and the accounting of money flows, which he says run from poor countries to rich ones at roughly $24 out for every $1 of aid in. Chapter 2 takes apart the “good-news narrative” that poverty and hunger have been halved since 1990, tracing how the Millennium Development Goal targets, poverty lines, and hunger definitions were redefined along the way. His conclusion is that under the current model, ending poverty is not slow but structurally impossible.

Key claims and figures, as Hickel states them

• The word “development” entered policy through Truman’s 20 January 1949 inaugural. Hickel reports that no programme existed behind it, “not even a single document.”
• The development industry is “worth hundreds of billions of dollars”; aid runs at about $128 billion a year.
• Citing Global Financial Integrity and the Norwegian School of Economics, he reports that in 2012 developing countries received a little over $2 trillion but about $5 trillion flowed out, and $26.5 trillion cumulatively since 1980.
• Structural adjustment cost the global South an average of $480 billion a year in potential GDP; WTO rules cost about $700 billion a year in lost export revenue.
• The Millennium Declaration switched the hunger and poverty target from halving the number of poor people to halving the proportion, then limited it to developing countries and moved the baseline from 2000 back to 1990.
• The international poverty line moved from $1.02 to $1.08 (2000), $1.25 (2008), and $1.90 (2015). He argues each rebasing lowered the line in real terms, and that almost all measured gains come from China.
• At an “ethical poverty line” of about $5 a day, some 4.3 billion people are poor, about 1 billion more than in 1981.
• Drawing on David Woodward, he argues that at current income distribution, ending $5-a-day poverty through growth would take 207 years and require global GDP 175 times its present size.

Terms to know

Methodological nationalism

Analysing “the fate of each nation without ever looking beyond its borders.”

Under-developed (as a verb)

To have had one’s development “intentionally obstructed, undone or reversed by an external power.”

Good-news narrative

The comforting story that poverty is being solved, which “vindicates our civilisation and affirms our deepest and most powerful ideas about Progress.”

International poverty line

A line set from the national poverty lines of the fifteen poorest countries, converted with purchasing-power parity; $1.25 “theoretically reflects what $1.25 could buy in the United States in 2005.”

Ethical poverty line

A line that “at the very least allows people to achieve the lower end of normal human life expectancy,” about $5 per day.

Unequal exchange

The “yawning gap between the ‘real value’ of the labour and goods that poor countries sell and the prices they are actually paid for them.”

Passages to anchor discussion

The divide between rich countries and poor countries isn’t natural or inevitable. It has been created.

It began as a public-relations gimmick.

for every dollar of aid that developing countries receive, they lose $24 in net outflows

Poor countries don’t need our aid; they need us to stop impoverishing them.

Hunger is not a problem of lack. It is a problem of distribution.

the $1.25 line is far too low, but it remains in official use because it is the only line that shows any progress against poverty

Discussion questions

1. Hickel says the development story “began as a public-relations gimmick.” Does the origin of an idea tell us anything about whether it is true or useful? Where else in engineering or policy does a framing outlive its origins?
2. Reconstruct the $24-out-for-$1-in claim. Which outflows does he count (debt interest, repatriated profits, capital flight, trade misinvoicing, unequal exchange)? Which of these would you accept as “losses,” and which are ordinary features of any economy?
3. The MDG target changed from halving the number of poor to halving the proportion, then to a 1990 baseline. Walk through how each change altered what counted as success. When is it legitimate to change a metric mid-programme?
4. Hickel argues that measured progress against poverty depends almost entirely on the choice of poverty line. In the GBD lab you saw how DALY totals depend on definitions. What makes a metric honest?
5. Star Power connection: In the game, one group could rewrite the rules. Who rewrote the rules of poverty measurement in Hickel’s account, and who was in the room?
6. He concedes real gains: child mortality down from 12.7 million deaths in 1990 to 6 million in 2015, maternal mortality down 45 per cent. Can both the good-news narrative and Hickel’s critique be true at once?
7. The SDGs promise to end poverty by 2030. Using Woodward’s figures, what would it take? Is the problem the target, the timeline, or the model of how poverty falls?
8. Hickel worked for World Vision and concluded the causes of Swaziland’s poverty lay outside its borders. As an engineer working on a water or health project, how would you know whether you are “shovelling sand into a bottomless pit”?

Push back

• Jeffrey Sachs, whom Hickel quotes, argues that “nobody is to blame” and that geography and disease burden explain much of poverty. Which parts of Sachs’s account survive Hickel’s critique?
• The $24-to-$1 ratio is an aggregate, and Hickel notes it varies by country. The unequal-exchange figure he cites is for the mid-1990s. How sensitive is the argument to these choices?
• Hickel says China’s gains prove little about free markets because reforms were not “imposed by Washington.” A critic would say China’s gains came from market liberalisation all the same. How would you adjudicate?
• The $5 “ethical poverty line” is his preferred threshold, and he admits it “isn’t perfect.” What would a defensible line look like, and who should set it?

Connections in this course

Not scheduled for a dedicated class session. It is the historical bridge between Part One (Week 7) and Part Four (Week 15).

The argument in brief

Chapter 3 asks where the divide came from and answers with a history rather than a theory. Around 1500, Hickel argues, living standards in Europe and the rest of the world were comparable and Europe held about 15 per cent of world GDP against China and India’s 65. What changed was the construction of a “world system” of core and periphery: American silver and gold, the Atlantic slave trade, colonial sugar, cotton and timber as “ghost acres,” and, at home, the enclosure of English commons that created a wage-dependent working class and the word “poverty” itself. He then follows the enclosure logic to Ireland, North America, India, China and Africa. Chapter 4 covers the twentieth century: the 1929 crash, Keynes and the New Deal, decolonisation and the “developmentalist” decades when the gap began to close, and the Western-backed coups (Iran, Guatemala, Brazil, Indonesia, Ghana, Congo, Chile) that Hickel argues ended that experiment and installed neoliberalism, first abroad and then at home under Volcker, Reagan and Thatcher.

Key claims and figures, as Hickel states them

• Life expectancy in England around 1800 was 32 to 34 years, and 15 for working-class children; Hickel reports higher figures for Japan, China and parts of South-East Asia at the time.
• Between 1503 and 1660, 16 million kilograms of silver were shipped from the Americas to Europe, three times Europe’s total reserves. By the mid-1600s the indigenous population of Latin America had fallen by around 95 per cent.
• Between 12 and 15 million Africans were shipped across the Atlantic by 1853; Britain paid slave owners £20 million in compensation in 1834, which Hickel puts at $300 billion today.
• Colonial sugar, cotton and timber gave Britain 25 to 30 million “ghost acres,” roughly double its own arable land.
• Between 1760 and 1870 some 7 million acres of England were enclosed by Acts of Parliament. “By the middle of the 1600s, the word ‘poverty’ had come into common use.”
• Under British rule, India exported record grain during the famines of 1876 and 1896–1902; Hickel puts the death toll at 30 million and India’s share of the world economy fell from 27 to 3 per cent.
• In the developmentalist decades of the 1960s and 1970s, per capita income in the global South grew at 3.2 per cent a year, and the income ratio between the US and East Asia, Latin America and the Middle East narrowed.
• In Chile after the 1973 coup, inflation reached 341 per cent, unemployment 19 per cent, and by 1988 poverty stood at 41 per cent while the top 10 per cent’s share rose 28 per cent.

Terms to know

World system, core and periphery

The “core” nations of Western Europe and the young United States “surrounded by the ‘peripheral’ regions of Asia, Africa and Latin America.”

Ghost acres

Productive land overseas whose output fed Britain’s industrialisation; 25 to 30 million acres “to Britain alone.”

Enclosure

Privatising “the common land that people relied on for survival, denying them rights of access and fencing the land off for their own commercial use.”

Improvement

Turning peasants’ secure tenure into “a market for leases,” granted only to those who could produce the most; later shorthand for “intensification and profit-orientation.”

Developmentalism

“State-led development, plenty of social spending and decent wages for workers,” driven by “a desire to build their economies for their own national good.”

Neoliberalism

A revival of classical market liberalism in which “the notion that market freedom is tantamount to individual liberty was a new and distinctive feature.”

Passages to anchor discussion

Europe didn’t develop the colonies. The colonies developed Europe.

Enclosure was not a peaceful process – it was profoundly violent, as dispossession always is.

Orthodox economic theory presupposes international inequalities as if they have always existed, but the historical record is clear that they were purposefully created.

In order to aggressively deregulate the economy, you first have to aggressively regulate the political sphere.

Poor people don’t need charity, they need fair wages for their work, labour unions to defend those wages and state regulation that prevents exploitation.

Discussion questions

1. Hickel dates the divide to after 1500 and says it was “purposefully created.” What evidence would distinguish a deliberate system from the unintended sum of many separate decisions?
2. The Industrial Revolution is usually taught as a story of coal, steam and canals. Hickel adds silver, slavery and ghost acres. Which inputs were necessary, which were sufficient, and how would you test that?
3. Enclosure turned common land, forests and water into private property. In India, Hickel says common water rights were “privatised and auctioned off.” What is lost and gained when a commons is enclosed? Think about water systems you will study in Weeks 9 and 10.
4. The Indian famines happened while railways shipped record grain exports. Infrastructure served the market rather than the population. Under what conditions does new infrastructure make people more vulnerable?
5. The developmentalist decades used tariffs, capital controls, land reform and nationalisation. Which of these tools are legitimate for a poor country today, and who should decide?
6. Hickel says Western support for coups “had little to do with Cold War ideology” and everything to do with economic interests. What evidence does he offer, and what would count as evidence against?
7. Chile was the “testing ground” for policies later adopted in the US and UK. Is this a case of ideas travelling or of power travelling?
8. Hickel closes the chapter criticising developmentalism itself: dams that displaced communities, soil degradation, pollution, growth as the goal. Where does that leave an engineer who wants to build things?

Push back

• The counterfactual arithmetic ($165 trillion for Potosí silver invested at 5 per cent, $97 trillion for slave labour) is rhetorically powerful. What does compound interest over centuries actually tell us?
• Hickel concedes that not every developmentalist state was overthrown (India, China, Egypt, Tanzania, East Asia). Does the list of exceptions weaken the argument that the West systematically ended developmentalism?
• A defender of the standard account would say technology, institutions and property rights explain Europe’s rise, and that extraction was a symptom rather than a cause. What does Hickel’s history not explain?
• The developmentalist gains he cites (life expectancy from 40 to 60 in Latin America) coincide with the global spread of vaccines and antibiotics. How much of the improvement is policy and how much is technology?

Connections in this course

Not scheduled for a dedicated class session. These chapters connect directly to Food Systems (Week 8), Water Infrastructure (Weeks 9–10) and Carbon Markets (Week 13).

The argument in brief

Part Three argues that the mechanisms of extraction changed form after the 1970s. Chapter 5 follows petrodollars pushed as loans into the global South, the 1981 Volcker interest-rate shock, the 1982 defaults, and the repurposing of the IMF and World Bank as debt enforcers imposing structural adjustment: “austerity, privatisation and liberalisation.” Chapter 6 traces “free trade” from Hamilton’s protectionism through the GATT to the 1995 WTO, attacks comparative-advantage theory, and shows how farm subsidies, TRIPS patents, investor-state arbitration and free capital mobility create a “virtual senate” of investors who discipline elected governments. Chapter 7 identifies three twenty-first-century channels: illicit financial flows through tax havens (which Hickel says dwarf bribery-style corruption), land grabs triggered by the 2007–08 food-price spike, and climate change, whose costs fall overwhelmingly on the countries that did least to cause it.

Key claims and figures, as Hickel states them

• Developing-country debt rose from $400 billion in 1970 to more than $1.6 trillion twelve years later. Volcker raised US interest rates to 21 per cent in 1981; Mexico defaulted in 1982.
• Per capita growth in the global South fell from 3.2 per cent a year in the 1960s–70s to 0.7 per cent in the 1980s–90s. Hickel cites Robert Pollin’s estimate of $480 billion a year in lost potential GDP.
• By 1992 some 146 “IMF riots” had occurred in thirty-nine countries. Major IMF and World Bank decisions require 85 per cent of votes; the US holds about 16 per cent.
• Since 1980 the global South has paid $4.2 trillion in interest; the World Bank privatised more than $2 trillion of assets between 1984 and 2012. In Cochabamba, Bechtel raised water prices by 35 per cent.
• Rich countries subsidise agriculture by $374 billion a year (US Farm Bill and EU Common Agricultural Policy). Hickel reports that 84 per cent of pharmaceutical research is publicly funded.
• Under NAFTA, some 2 million Mexican farmers were driven out of business and tortilla prices rose 279 per cent in a decade. More than 500 investor-state disputes have been filed.
• Global Financial Integrity estimates up to $1.1 trillion a year leaves developing countries illicitly, mostly through trade misinvoicing and transfer mispricing, against aid of $99.3 billion in 2013. Bribery is about 3 per cent of the total.
• Two-thirds of land grabbed between 2000 and 2010 was in Africa. Developed nations bear 12 per cent of climate costs and developing nations 82 per cent; 98 per cent of climate deaths in 2010 were in developing countries.

Terms to know

Structural adjustment programme (SAP)

“A three-part cocktail: austerity, privatisation and liberalisation,” imposed as a condition of debt relief and new lending.

Spatial fix

Resolving a crisis of over-accumulation by “opening up new consumer markets, labour markets and investment markets abroad.”

Single undertaking

The WTO rule that “countries had to sign on to the whole package of WTO rules, or be frozen out of the world economy.”

Virtual senate

Investors who “conduct moment-by-moment referendums on decisions made by voters or governments around the world.”

Trade misinvoicing / transfer mispricing

Cheating the trade system to move money offshore; transfer pricing is legal “at arm’s length” and becomes mispricing when prices are distorted to evade tax.

Secrecy jurisdiction

“The technical term for a tax haven.”

Land grab

“A transfer of at least 500 acres to be converted from smallholder production, collective use or ecosystem services to commercial activity.”

Carbon colonialism

The rush to buy forests in the global South for REDD carbon credits, which Hickel says has evicted forest communities.

Climate debt

The argument that “the North owes a ‘climate debt’ to the South” for cumulative emissions.

Passages to anchor discussion

It was de-development imposed in the name of development.

The debt cannot be repaid. If we don’t repay, the lenders will not die. That is for sure. But if we do repay, we will die. That is also for sure.

Comparative advantage isn’t given, it is created.

It may be a level playing field, but what good is a level playing field in a match between schoolchildren and a Premier League team?

Africa loses so much through illicit flows that it is effectively a net creditor to the rest of the world.

We must stop calling events like these natural disasters.

Discussion questions

1. World Bank project loans for “power plants, irrigation systems” came with structural-adjustment conditions. If you were designing a water treatment plant financed this way, which conditions would affect whether it still works in twenty years?
2. Hickel says the IMF treated exogenous shocks (interest rates, commodity prices) as if they were endogenous policy failures. How do you tell the difference in a real economy?
3. The Cochabamba case: a private operator raised water prices 35 per cent and a World Bank official later called water “a real business opportunity.” When, if ever, should water infrastructure be privately owned? What would fair terms look like?
4. Ha-Joon Chang’s analogy: a child sent to work at six may become a savvy shoeshine boy but never a brain surgeon. Is “infant industry” protection still viable for a country trying to build a solar or battery industry today, given WTO rules?
5. Investor-state arbitration let Metalclad win $15.6 million after Mexico blocked a landfill that threatened a water supply. Who should bear the cost when an environmental regulation strands a private investment?
6. Hickel argues that trade misinvoicing and transfer mispricing dwarf bribery. Why does the public conversation about corruption focus on the smaller channel? Who benefits from that framing?
7. The 2007–08 food-price spike: Hickel weighs Chinese demand, biofuels, drought and oil before settling on commodity-index speculation. Evaluate the evidence he gives. What data would settle it?
8. REDD pays to protect forests but, Hickel says, has evicted indigenous communities. In Week 13 you will study how carbon credits are generated. What safeguards would make a forest carbon project defensible?
9. Climate costs: 82 per cent borne by developing countries, 70 per cent of emissions from rich ones. Does the “climate debt” framing help or hinder getting to an agreement?

Push back

• “Why didn’t they just default?” Hickel answers with coups and capital flight. Greece in 2015 and Argentina in 2001 are test cases. Did default work where it was tried?
• Hickel relies heavily on Global Financial Integrity estimates while acknowledging their detection limits. How confident should we be in a $1.1 trillion figure for illegal flows by definition hidden?
• He concedes that investor-state arbitration “slowed down the onslaught of Western-backed coups, which was a welcome change.” Is a flawed legal process better than none?
• Several claims in Chapter 7 (motives for Iraq and Libya, who killed Berta Cáceres) are stated without sources in the running text. How should a reader weigh them?
• East Asia’s textile industry grew as Swaziland’s collapsed in 2005. A free-trade economist calls this efficient reallocation; Hickel calls it “divide and conquer.” What is the right unit of analysis, a country or the world?

Connections in this course

Discussed in class Tue 12/1 (Week 15), Environmental Justice.

The argument in brief

Chapter 8 opens with a public-health parable (pull people out of the river, or go upstream and ask why they are falling in) and Oscar Wilde’s critique of charity. Hickel then lays out five reforms that he says would require “not a single dollar of foreign aid”: debt cancellation without conditions and a legal right to default; democratising the World Bank, IMF and WTO; trade deliberately biased toward poorer countries, with shorter patents and cuts to rich-country farm subsidies; a global minimum wage set at half each country’s median; and reclaiming the commons through tax transparency, land protection and a rapid fossil-fuel phase-out. Chapter 9 argues that even if all of this worked, catch-up growth would collide with planetary limits: humanity already overshoots ecological capacity by about 60 per cent a year, almost entirely from rich-country consumption. He dismantles GDP as a war-time metric, rejects “decoupling” and bioenergy carbon capture as false promises, and proposes planned degrowth in rich countries, a shorter working week, basic income, curbs on advertising, debt-free money, and regenerative farming, closing with alternatives from Bhutan, Ecuador, Bolivia, India and Rojava.

Key claims and figures, as Hickel states them

• At least $400 billion of debt in 100 countries would need cancelling for states to meet basic needs; “dictator debts” amount to about $735 billion in thirty-two countries.
• Rich countries hold about 60 per cent of votes at the World Bank and IMF; the US holds a veto. Hickel proposes reallocating votes by population or need and electing presidents on merit.
• The twenty-year patent term “could be halved”; essential medicines should be exempt from patents. Abolishing even half of OECD farm subsidies would help level the field.
• A global minimum wage at 50 per cent of each country’s median. Doubling Mexican sweatshop wages would raise US clothing prices by 1.8 per cent, he reports.
• Fossil-fuel subsidies of $5.3 trillion a year should be redirected to solar, wind and tidal power; rich countries should reach zero emissions by 2035 and poor countries by 2050.
• If everyone lived like the average high-income citizen, we would need 3.4 Earths. Global material extraction grew 94 per cent between 1980 and 2010 to 70 billion tons a year.
• Citing Kevin Anderson, rich countries would need to cut emissions about 10 per cent a year; efficiency and clean energy deliver at most 4 per cent, leaving about 6 per cent a year of downscaling.
• Europe matches or beats US human development with 40 per cent less GDP per capita and 60 per cent fewer emissions per capita; Costa Rica exceeds US life expectancy on $10,000 GDP per capita.
• Regenerative farming could sequester 3 per cent (National Academy of Sciences) to 15 per cent (Science) of emissions, with a not-yet-peer-reviewed Rodale estimate far higher; he notes soils hold a finite amount of carbon.

Terms to know

Charity versus justice

Charity “returns them straight back into the conditions that produced their poverty”; justice means changing “the rules that produce poverty in the first place.”

Dictator debts

“Debts racked up by heads of state with no democratic mandate.”

Global hectare

“A standardised unit that accounts for resource use, waste, pollution and emissions”; a fair share is 1.8 per person.

Decoupling

The claim that efficiency will “decouple” economic growth from material throughput; Hickel argues consumption-based footprints show the opposite.

BECCS

Bio-energy carbon capture and storage: plantations burned for energy with the carbon captured and stored, requiring land “three times the size of India.”

Degrowth

For rich countries, “a planned shrinkage of their material economies, with the goal of maintaining and even improving their quality of life.”

Appropriately developed

His term for countries like Costa Rica that achieve long lives on modest incomes: “exemplars of efficient living.”

Genuine Progress Indicator

Starts with GDP, adds household and volunteer work, subtracts pollution, resource depletion and crime, and adjusts for inequality.

Passages to anchor discussion

Doctor, I can see you are working hard to help these patients. But perhaps you are working at the wrong end of the line?

Fairness is better than charity. In the absence of fairness, charity carries the whiff of a scam.

GDP was intended to be a war-time measure, which is why it is so single-minded – almost even violent.

What would we do with 100 per cent clean energy? Exactly what we’re doing with fossil fuels

If growth is a substitute for equality, then equality is a substitute for growth.

Once people begin to reject the single story of development, the future is fertile and rich with possibility. We need only have the courage to invent it.

Discussion questions

1. The “wrong end of the line” parable is aimed at clinics and charities. Apply it to a water or sanitation project you might work on. What is upstream of it?
2. Rank Hickel’s five reforms (debt, global democracy, fair trade, just wages, reclaiming the commons) by how much they would help and how likely they are. Where do the two rankings diverge, and why?
3. He argues the whole package needs “not a single dollar of foreign aid.” Does that make it more or less politically achievable than aid?
4. Hickel says clean energy alone will not save us because “what would we do with 100 per cent clean energy? Exactly what we’re doing with fossil fuels.” Do you agree? What does this imply for the Energy Systems week?
5. Degrowth at 6 per cent a year in rich countries. What would that mean concretely for the built environment, transport and materials you studied in Weeks 11 and 12? Which sectors shrink and which grow?
6. Costa Rica as “appropriately developed.” What does Costa Rica do differently, and which parts are transferable?
7. Hickel proposes a shorter working week, basic income, advertising bans and outlawing planned obsolescence. Which of these belong in an engineering ethics conversation about design?
8. Regenerative agriculture as a time-buying carbon sink, with Hickel himself flagging the limits of soil carbon. How should a policy be designed around an estimate that ranges from 3 per cent to more than 100 per cent?
9. Environmental justice connection: Which of Hickel’s remedies address the domestic pollution burden and energy poverty discussed on the last day of class, and which are purely international?

Push back

• Hickel writes there is “no evidence” that minimum wages reduce employment, with a footnote rather than an argument. Economists disagree on this. How much weight does the claim bear in his proposal?
• The 6-per-cent-a-year degrowth figure rests on one scenario and on assuming BECCS is not an option. How robust is the conclusion to different assumptions about negative emissions?
• Debt-free state-issued money is presented via “a couple of progressive IMF economists” and a campaign group. What risks (inflation, governance) does the text not address?
• Hickel admits “cynical politicians” in Ecuador and Bolivia used sumak kawsay to cloak extractivism. Can a development alternative survive its own government?
• A critic would say degrowth asks the rich world to accept what it will never vote for. Is there a version of this agenda a democratic electorate would choose?

Connections in this course