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High-Inequality Equilibria (HIE) and Low-Income Equilibria (LIE)
High-Inequality Equilibria (HIE) and Low-Income Equilibria (LIE) relational concepts that evolved from a concern with understanding inequality across and within nations/states from a world-historical perspective. As a multidisciplinary, macro-scale approach to world history and social change that stresses that the world-system (and not nation states) should be the primary (but not exclusive) unit of social analysis, it can be seen as a modern version of dependency theory and world-systems analysis. In some senses, it has emerged over the last half-decade or so arguing against the literature suggesting the 18th century saw the world make a universal transition to modernity. This was an unequal process.

HIE’s and LIE’s it is proposed represent consistent trends we have seen emerge over the past two centuries. More simply, it can be said the former refers to poor countries and the latter rich countries. What the concepts of HIE and LIE allow us to do is to understand is the nation-state is the inappropriate unit of analysis from which to understand why some countries today have high levels of inequality and others low. Echoing dependency theory and world-systems analysis, the concepts of HIE and LIE argues that these areas have been locked in this particular relationship for at least the last two centuries and have a relational status in which they both reproduce each other. This framework differs from dependency and world-systems however through its focus on institutions vs. state structures or the division of labor in the world-economy as the primary focus point for understanding unequal relationships among states in the world today.

Areas that fall into High-Inequality Equilibria (HIE) such as say Latin America, the Caribbean and Africa are characterized by extractive institutions which have excluded large segments of the population from sharing in the benefits of economic growth hence creating high-inequality. This was able to be maintained through the creation of “between group” hierarchies such as the privileging of certain races/ethnic/religious groups over others. Said another way, we see through institutions such as slavery, colonialism, and white supremacy a “selective exclusion” of particular people from the ability to equally benefit from the wealth created in a particular local. These were indeed resisted however through slave revolts, marronage, and changes in property laws in Latin America for example that attempted to keep Indian property safe from Spanish exploitation.

For Low-Inequality Equilibria (LIE) areas, these are characterized by areas such as Europe, Canada and the United States in which their ability to generate large amounts of wealth and hence provide better goods and services to their people was predicated on the creation of HIE’s which they could exploit. In other words, rich countries today where we see low-levels of within state inequality did not appear because of good democratic practices or natural endowments in cheap land and expensive labor. While important, in the case of Canada and the United States for example, the displacement of Native Americans, enslavement of African labor and the creation of gender hierarchies was essential to generating their massive wealth. Given this, LIE’s, “… while portrayed as inclusive in comparison to within-country HIE… [had] property and political rights… [generated] through (often violent) imposition over other arrangements”< Korzenewicz and Moran (2009): 29>. Hybrid situations do also exist, perhaps best exemplified by the United States which does not neatly fit into either category of LIE or HIE. If we take the development of the New England colonies as an example, it is difficult to not see how slavery in the South created the conditions for the North to have more wealth and hence have a better distribution of income while maintaining racial inequality through slavery in the South. Hence, although the US has high levels of economic growth and much wealth that compared to states/nations that fall into HIE’s, historically relations have existed and continue to exist in muted forms which privilege on social group over another. However, many countries such as China, India and the Scandinavian countries also do not easily fall into these categories and this in many ways makes these concepts of historical areas of produced and reproduced inequality not very universal. The concepts of HIE and LIE was coined by Roberto Patricio Korzeniewicz and Timothy Patrick Moran in their book Unveiling Inequality: A World-Historical Perspective (2009). Korzeniewicz however had been working on these concepts however since at least 1997 and as a graduate of the SUNY Binghamton’s Sociology PhD program in the late 1980s is a trained scholar in world-systems analysis. The concepts of HIE and LIE are not as widely used as the more popular concepts of dependency theory and world-systems analysis. As a contribution to the surging interest in global inequality due to globalization, the concepts of HIE and LIE for many scholars has been a useful one.