Abstract
AbstractThis article presents an overview of calculations of global inequality, recently and over the long term, and outlines the main controversies and political and philosophical implications of the findings. It focuses in particular on the winners and losers of the most recent episode of globalization, from 1988 to 2008. It suggests that the period has witnessed the first decline in inequality between world citizens since the Industrial Revolution. However, the decline can be sustained only if countries' mean incomes continue to converge (as they have been doing during the past ten years) and if internal (within‐country) inequalities, which are already high, are kept in check. Mean‐income convergence would also reduce the huge ‘citizenship premium’ that is enjoyed today by the citizens of rich countries.
Highlights
The paper presents an overview of calculations of global inequality, recently and over the long-run as well as main controversies and political and philosophical implications of the findings
When we think of income inequality, our first reaction is to think of it within the borders of a country. This is quite understandable for a world where the nation-state is very important in determining one’s income level, access to a number of benefits, from pensions to free health care, and where by far the dominant way in which political life is organized is at the level of a country
In the era of globalization another way to look at inequality between individuals is to go beyond the confines of a nation-state, and to look at inequality between all individuals in the world
Summary
Who won and who lost It is generally thought that there are two groups who are the big winners of the past two decades of globalization: first, the very rich, those at the top of national and global income distributions, and second, the middle classes of emerging market economies, in particular China, India, Indonesia and Brazil. The largest increases were registered around the median: 80% real increase at the median itself and some 70% around it It is there, between the 50th and 60th percentile of the global income distribution that we find some 200 million Chinese, 90 million Indians, and about 30 million people each from Indonesia, Brazil and Egypt. A person at that same position within Chinese income distribution, was richer than more than onehalf of world population He or she leapfrogged over more than 40% of people in the world. The stagnation or decline in real income of the global upper middle class, and big gains realized by the top 1%, reverse the position of the Lorenz curves for the last one-fifth of the distribution. We see growing wealth and probably power of those at the very top and, remarkably, stagnant incomes for both the people just below the “enchanted” richest 1 or 5 percent, and those poorest in the world
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