The lead economist at the World Bank’s research division takes a timely look at the inequality of income and wealth.
Global inequality is “extremely high,” writes Milanovic (Worlds Apart: Measuring International and Global Inequality, 2005), with the richest ten percent of income recipients receiving 56 percent of global income, while the poorest ten percent receive only 0.7 percent. A few poor countries are catching up with the rich world, but the differences between the richest and poorest individuals are enormous and likely to grow. In this wide-ranging book, the author examines inequality within nations and between nations, using vignettes to illustrate how wealth and income differences play out in daily life. However, Milanovic’s detailed explanations of how available data can be used to produce insights are often complex and dense—they will be rough going for most non-specialists. Fortunately, the anecdotes make up most of the book and shed considerable light on a grab-bag of issues related to inequalities past and present. For instance: Although Marcus Crassus of ancient Rome had an income equal to the annual incomes of about 32,000 people of his time, John D. Rockefeller was probably the richest person ever, with an income equal to that of about 116,000 people in 1937. Rome wins hands down, however, when the income of its senators (about $21 million annually) is compared to that of today’s U.S. senators (less than $700,000). In China, where inequality doubled between the 1980s and 2005, the disparity between haves and have-nots threatens national unity. Anywhere in the world, writes Milanovic, more than 80 percent of a person’s income can be explained by two factors: place of birth and parents’ income class. The only ways to improve one’s income: hard work, growth in the national mean income of one’s country (carrying the entire population with it) and immigration. The author also discusses differences between the United States and the European Union, similarities between Asia and Latin America and whether the world actually has a middle class (“at best only emerging”).
Authoritative but not easy reading.