Global Inequality: A New Approach for the Age of Globalization

312 Pages·2016·2.83 MB·English

by  Branko Milanovic

GLOBAL IN EQUALITY

G LO BAL
INEQUALIT Y
A New Approach for
the Age of Globalization

BRANKO MILANOVIC
THE BELKNAP PRESS
OF HARVARD UNIVERSITY PRESS
Cambridge, Massachusetts
London, England
2016
Copyright © 2016 by Th e President and Fellows of Harvard College
All rights reserved
Printed in the United States of Amer i ca
First printing
Library of Congress Cataloging- in- Publication Data
Names: Milanović, Branko, author.
Title: Global in equality : a new approach for the age of globalization / Branko Milanovic.
Description: Cambridge, Mas sa chu setts : Harvard University Press, 2016. | Includes
bibliographical references and index.
Identifi ers: LCCN 2015043601 | ISBN 9780674737136 (alk. paper)
Subjects: LCSH: Equality. | Income distribution. | Globalization— Social aspects. |
Globalization— Economic aspects.
Classifi cation: LCC HM821 .M555 2016 | DDC 305— dc23 LC rec ord available at
http:// lccn . loc . gov / 2015043601
Contents
Acknowl edgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1. Th e Rise of the Global Middle Class and
Global Plutocrats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2. In equality within Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Introducing Kuznets Waves to Explain Long- Term Trends
in In equality
3. In equality among Countries . . . . . . . . . . . . . . . . . . . . . . . . .118
From Karl Marx to Frantz Fanon, and Th en Back to Marx?
4. Global In equality in Th is Century and the Next . . . . . . . . .155
5. What Next? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212
Ten Short Refl ections on the Future of Income In equality
and Globalization
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
vi Contents
Acknowl edgments
Th is book is the product of years of work on income in e qual ity in
general and, more specifi cally, on global income in e qual ity. Th anking
everyo ne from whom I learned over such a long period is impossible,
so I will focus more narrowly on the writing of this book. As every one
knows, the most diffi cult part is fi guring out the structure of a book.
Once I decid ed to begin with the greatest reshuffl ing of personal in-
comes in the past two centuries, that is, with the eff ects of globaliza-
tion on the distribution of incomes in the world, the rest of the
chapters, as in a jigsaw puzzle, quickly fell into place.
Th e second most diffi cult probl em in writing a book is starting it.
Th e dread of the fi rst sentence. On the advice of my friend Niels
Planel, who is himself a writer of nonfi ction, I deci ded to jump- start
the book by g oing for a week to Bocas del Toro in Panama. It was an
excellent decision. A ft er a week almost fully dedicated to the book
(with a few dips in the Car ibb ean in between), a good part of the text
was done.
vii
It was a pleas ure to learn early on from Ian Malcolm of Harvard
University Press that the press was interested in publishing the book.
Th ere was also, as is oft en the case in such situations, an ele ment of
serendipity: I happened to be in London then, and we agreed on all
the details over a coff ee (or was it a tea?). Ian made signifi cant contri-
butions as an editor. He went through the text with great care and
curiosity, all the while keeping in mind the author’s best interests and
suggesting revisions with precision and tact. His suggestions im-
proved the book, and some structural modifi cations that he pro-
posed made it more focused and easier to read.
Louise Robbins did a fabulous job in editing the text. I was very
happy that we quickly agreed on a workable approach— where the
voice of the writer would be left unaltered, but mistakes would be cor-
rected and inconsistencies highlighted and ultimately fi xed. I am
very grateful to Louise for making the book better. It was a real plea-
sure working with her.
O thers at Harvard University Press whose assistance I appreciate
include Anne McGuire, who carefully checked the references, and
Stephanie Vyce, who was most helpful in d oing the review of the
sources and quotes I used in the book.
Parts of the chapters that deal with global income distribution
have been presented in vario us talks and conferences, and I am
thankful for the feedback I received. For the material in Chapter 2,
where I redefi ne the Kuznets hypothesis and introduce the concept
of Kuznets waves, I am grateful for the excellent written comments
I received from (in alphabetical order) Guido Alfani, Bob Allen,
Christoph Lakner, Peter Lindert, Leandro Prados de la Escosura,
and Walter Scheidel, and also for the comments that I received at sem-
inars and conferences where I presented that part of the book: from
Steve Broadberry, Ljubomir Madžar, and Filip Novokmet in Belgrade;
Leandro Prados de la Escosura, Francisco Goerlich, Facundo Alvaredo,
Roy van der Weide, and Peter Lanjouw in Valencia; John Bonin at
viii Acknowle dgments
Wesleyan University; Walter Scheidel, Peter Turchin, and Peer Vries
in Vienna; and Joe Stiglitz and Suresh Naidu in New York City. Carla
Yumatle was very helpful with her comments and discussion of
Frantz Fanon’s work.
I am grateful to friends who generously shared their data with me
and answered my many questions: Leandro Prados de la Escosura
and Carlos Álvarez Nogal, Peter Lindert and Jeff rey Williamson,
Giovanni Vecchi and Andrea Brandolini, Jonathan Cribb, Guido Al-
fani, Walter Ryckbosch, Javier Rodríguez Weber, Christoph Lakner
and Tony Atkinson, Luis Bértola, Jan Luiten van Zanden, Wenjie
Zhang, Larry Mishel, Michael Clemens, and Çağlar Özden. I would
especially like to thank Ann Harrison and Peter Nolan, who were
fi rst-r ate reviewers and whose many suggestions I took very seri-
ously and tried to incorporate into the text. Janet Gornick of the
Gradua te Center of the City University of New York and Luxem-
bourg Income Study, where I was based during the entire period of
the writing and production of this book, was extraordinarily under-
standing and encouraged me to press on, even during times when I
had some doubts.
My wife, Michele de Nevers, and our sons, Nikola and Georgie,
w ere happy to see me write another book. It provided entertainment
for me, and gave more f ree time to them. I am grateful to Michele for
gracefully accepting our commuting lifestyle between New York and
Washington, DC.
Acknowl edgments ix