In a good article in the Washington Post, Maryan L. Tupy looks at income inequality around the world and concludes that globalization “has ushered in a period of unprecedented prosperity” around the world. Tupy is a senior policy analyst at the Cato Institute’s Center for Global Liberty and Prosperity and editor of Humanprogress.org. Key takeaways:
- In the U.S. the income gap between the richest 1% and the rest has grown. But if we look around the world, inequality is shrinking, not growing. In the words of the World Bank’s Branko Milanovic, we are witnessing “the first decline in global inequality between world citizens since the Industrial Revolution”.
- By the early 1800s the U.S. was 1.9 times richer than the global average. By 1999 that gap had risen to 4.8 but it has since shrunk to 3.9 as the rest of the world began to catch up. That narrowing of the gap is not due to declining U.S. incomes as U.S. GDP per capita has rebounded and now stands at an all-time high.
- The catch-up is most dramatic in China. Mao’s collectivization of agriculture resulted in famine which killed between 18 and 45 million people. Following liberalization in 1978, GDP per capita increased 12.5 fold.
- Improvements in life expectancy, child and maternal mortality, treatment of communicable diseases and the spread of technology have resulted in a dramatic narrowing of the standard of living gap. As Laurence Chandy of the Brookings Institute wrote in 2011, “poverty reduction of this magnitude is unparalleled in history: never before have so many people been lifted out of poverty over such a brief period of time.”
- Many Americans point to globalization as a bogeyman, but the phenomenon has ushered in a period of unprecedented prosperity in many poor countries. “… let us remember the global – and largely positive – perspective on the state of the world.”
- My own thoughts about this are that if we focused less on the differences between the 1% and the 99%, and more on the similarities, we would feel a lot more grateful for what we have. If we measured equality in terms of quality of nutrition and health care, access to information, education, shelter, entertainment and transportation we would see enormous improvements in equality over the last 200 years. Let’s face it, most of the 99% today live better than – and longer — than the kings of centuries past.