In South Africa, one of the most unequal countries in the world, the richest 0.1 percent of people own almost 30 percent of all wealth, more than double what the bottom 90 percent own combined. The picture feels unfair, but economists do not stop at feelings. They want to know how unfair it is and how to compare one country’s gap to another’s.

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That is why Italian statistician Corrado Gini invented a mathematical tool more than a century ago to measure the shape of inequality itself. He called it the Gini Coefficient, though most people today call it the Gini Index.

It is one of the few numbers that turns the idea of fairness into something you can actually draw.

The Number That Draws Fairness

The Gini Index measures how unevenly something, usually income or wealth, is spread across a population.

It runs on a scale from 0 to 1:

0 = perfect equality. Everyone has exactly the same share.
1 = perfect inequality. One person has everything, and everyone else has nothing.

Most countries fall somewhere in between:

Denmark ≈ 0.25 (very equal)
India ≈ 0.36
United States ≈ 0.41
South Africa > 0.60, among the highest in the world.

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How the Gini Is Calculated

There are two main ways to understand the Gini, one about people, the other about shapes.

a. The Thought Experiment

Imagine two strangers bumping into each other on the street and comparing what they earn or own.
How big is the average gap between them? The Gini measures that average difference for every possible pair in the population, scaled to the country’s mean income.

If everyone earns the same, the gap is zero → Gini = 0.
If one person has it all, the gap is at its maximum → Gini = 1.

The Gini tells us how far apart people are, not how rich or poor a country is overall.

b. The Lorenz Curve

Now picture everyone lined up from poorest to richest. On a graph, the x-axis shows the share of people, and the y-axis shows the share of total income or wealth they hold. If everyone were equal, the plot would rise in a perfect 45° diagonal, the Line of Equality.

In real life, the curve sags below it. That sag, called the Lorenz Curve, shows how the poorest own less and the richest own more.

The Gini Index is the ratio of the shaded area between these two lines to the total area under the diagonal:

Gini = A∕A+B

where:

A = area between the line of equality and the Lorenz curve
B = area under the Lorenz curve

The greater area A, the higher the Gini.

What the Gini Doesn’t Show

The Gini is a brilliant shortcut, but it is still a shortcut.
It does not tell you who holds wealth by race, gender, or region.
It does not reveal how easy it is to move up the ladder.
And it says nothing about why inequality exists in the first place.

Economic inequality is often tied to older injustices such as discrimination, colonization, and unequal access to education and opportunity.

The Gini can draw the gap, but not the history behind it.

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What Shapes a Country’s Gini

A country’s Gini score is shaped by the choices it makes about how its economy works, how it taxes, and how it shares opportunity. Communist systems like those in mid-century China and the Soviet Union reduced inequality but limited prosperity, while China’s shift toward capitalism lifted incomes and widened its Gini.

In capitalist nations, progressive taxes, inheritance limits, and welfare transfers can pull the curve back toward equality. France, Denmark, and the Netherlands have done this for decades.

Broader access to education, healthcare, and digital tools also helps level the field. Ultimately, how a society handles extreme wealth and power determines whether inequality stays manageable or starts to undermine democracy itself.

The Bigger Picture

The Gini Index is like a mirror for society. It does not predict the future or fix the past, but it reflects how fairly opportunities are shared right now. It shows that inequality is not destiny; it is design.

Just as policies, taxes, and education can pull the curve closer to equality, inaction can let it drift away.
Power and wealth reinforce each other, which means equality never sustains itself.
Left alone, societies tilt toward imbalance unless we choose to redraw the line.

So the next time someone says “the economy is growing,” ask this instead:
Who is the economy growing for?

Because somewhere, on a quiet graph first drawn by Corrado Gini more than a century ago, that answer is already curving away from the line of equality.