The rich get richer, and the world gets poorer.
Inequality is a constant of history. But, writes economist Milanovic (Luxembourg Income Study Center; The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality, 2010, etc.), only recently have we been able to work with meaningful numbers about it. His terminus is 1988, “a convenient starting place because it coincides almost exactly with the fall of the Berlin Wall and reintegration of the then-communist economies into the world economic system.” Armed with strong data, the author charts how inequality of income and wealth, among other axes, though a global phenomenon, also has local results: in the face of globalization, workers in China may want to unionize, for instance, while workers in the United States might demand protective tariffs. Building on but not entirely endorsing the work of Thomas Piketty, Milanovic looks closely at some specific consequences of this push and pull across the globe: unskilled workers may be drawn to the U.S. because of the tightening of possibilities of intergenerational mobility, while more skilled ones might instead opt for the Northern European nations, where that opportunity is greater. If that premise is guaranteed to irritate America-firsters, so are some of Milanovic’s other findings, presented with the arid calmness of his profession. As inequality rises, the middle class disappears; as it does, political power concentrates in the hands of the rich, who may opt to send their children to private schools and refuse to fund public ones, with the “countervailing power of the middle class…no longer sufficiently strong to oblige them to finance public health and education and participate in it.” Milanovic is cautious about forecasting either economic or political consequences, noting in passing how wrong analysts were in the 1970s and ’80s about the world of today and observing, “predicting important discrete events may be a form of charlatanism.”
Packed with charts and graphs and not for the numerically faint of heart. For those versed in economics, however, Milanovic provides an illuminating analysis.