The Structural Conditions for Lasting Economic Inequality in Peru

What is it about?

This chapter examines the structural character of economic inequality in Peru. It is argued that the role of the country in the international division of labor is the principal cause for economic inequality. Peru’s function as principally a provider of natural resources for capitalist economic development abroad is the main reason for which its economy can be divided into an advanced economy (AE) and a capitalist subsistence economy (CSE). The AE is made up of medium-sized and large national and transnational corporations. In the CSE all micro and small companies and own account workers are located. The mass of the workforce labors in the CSE. The AE and the CSE are interrelated and need each other for reproduction. The functional distribution of income, the Gini coefficient, the distribution of income and wealth, and educational inequality are characterized by a remarkable stability of economic inequality. It does not improve nor worsens. The dependent capitalist state plays a key role in the persistence of economic inequality. Its prime task is to help to ensure the reproduction of transnational capital on enlarged scale. The institutionalization of super-exploitation, the lack of policies that help to initiate processes that point to the transformation of micro companies in medium-sized and large companies, and the absence of political and social measures that can enable the eradication of informality show that governmental expenditures of the State to reduce economic inequality is just a bad masquerade of its real functions.

Featured Image