Branko Milanovic

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pages: 251 words: 69,245

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality by Branko Milanovic

Berlin Wall, Branko Milanovic, colonial rule, crony capitalism, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, endogenous growth, Fall of the Berlin Wall, financial deregulation, full employment, Gini coefficient, high net worth, illegal immigration, income inequality, income per capita, Joseph Schumpeter, means of production, open borders, Pareto efficiency, plutocrats, Plutocrats, purchasing power parity, Simon Kuznets, very high income, Vilfredo Pareto, Washington Consensus, zero-sum game

In this book of many delights, Branko Milanovic, who has spent twenty-five years studying global inequality, provides us with a veritable Arabian Nights of stories about inequality, drawing from history, literature, and everywhere in the world. A pleasure to read, and an eye-opener for haves and for have-nots alike.” —ANGUS DEATON, Professor of Economics and International Affairs, Princeton University, 2009 President of the American Economic Association, author of The Analysis of Household Surveys: A Microeconometric Approach to Development Policy “Learn about the serious subject of economic inequality while you have plenty of fun traveling around the globe and far back in time! Through fascinating stories and wonderful illustrations, Branko Milanovic explains income and wealth inequality—their concepts, measurement, evolution, and role in human life—without compromising precision or balance.

The discourse of revolution changed, and this change was eventually best reflected in Mao Zedong’s claim that the third world was the new proletariat, while the classes to be overthrown were those from the rich countries, combining implicitly in the latter group pell-mell workers and capitalists of the first world. The ideas of both the universal proletarian brotherhood and the “permanent revolution” were given up.7 FIGURE 2 The level and composition of global inequality in 1870 and 2000 (Gini decomposition) Sources: François Bourguignon and Christian Morrisson, “The Size Distribution of Income Among World Citizens, 1820-1990,” American Economic Review (September 2002): 727-744; Branko Milanovic, Worlds Apart: Measuring International and Global Inequality (Princeton: Princeton University Press, 2005), fig. 11.3. Marx’s world had thus gone topsy-turvy in some 150 years. Why? Because the underlying global income distribution had changed. Around 1870 global inequality between world citizens was less than it is today (see Figure 2). But the most striking thing is not its overall magnitude but how its composition changed: From being predominantly driven by class, it has changed to being almost entirely driven by location (80 percent of global inequality).

Sestercius means “semithird,” indicating its value of two-and-a-half asses (another Roman coin unit). 3 Raymond Goldsmith, in “An Estimate of the Size and Structure of the National Product of the Early Roman Empire,” Review of Income and Wealth 30 (September 1984), estimates Augustus’s annual income at 15 million HS, which, using the conventional interest rate of 6 percent per year, translates into a fortune of 250 million sesterces. 4 Tacitus, Annals (New York: Penguin, 1996), bk. 12, chap. 53. Pallas helped Nero in many of his misdeeds until he too was, Tacitus writes, poisoned on Nero’s orders (bk. 14, chap. 65). 5 Goldsmith, “Estimate of the Size and Structure.” This was estimated by Branko Milanovic, Peter Lindert, and Jeffrey Williamson in “Preindustrial Inequality” (Economic Journal, forthcoming; previous version published as Measuring Ancient Inequality, National Bureau of Economic Research Working Paper 13550 [National Bureau of Economic Research, October 2007]) to have amounted to a GDP per capita in 1990 international prices of $PPP 633 (PPP stands for “purchasing power parity”; see Essay II).


pages: 312 words: 91,835

Global Inequality: A New Approach for the Age of Globalization by Branko Milanovic

"Robert Solow", Asian financial crisis, assortative mating, Berlin Wall, bitcoin, Black Swan, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial exploitation, colonial rule, David Ricardo: comparative advantage, deglobalization, demographic transition, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, invisible hand, labor-force participation, liberal capitalism, low skilled workers, Martin Wolf, means of production, mittelstand, moral hazard, Nash equilibrium, offshore financial centre, oil shock, open borders, Paul Samuelson, place-making, plutocrats, Plutocrats, post scarcity, post-industrial society, profit motive, purchasing power parity, Ralph Nader, Second Machine Age, seigniorage, Silicon Valley, Simon Kuznets, special economic zone, stakhanovite, trade route, transfer pricing, very high income, Vilfredo Pareto, Washington Consensus, women in the workforce

GLOBAL INEQUALITY 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 The President and Fellows of Harvard College All rights reserved Author photo: R. Krstinic Jacket design: Jill Breitbarth 978-0-674-73713-6 (alk. paper) 978-0-674-96976-6 (EPUB) 978-0-674-96978-0 (MOBI) The Library of Congress has cataloged the printed edition as follows: Names: Milanović, Branko, author. Title: Global inequality : a new approach for the age of globalization / Branko Milanovic. Description: Cambridge, Massachusetts : The Belknap Press of Harvard University Press, 2016. | Includes bibliographical references and index. Identifiers: LCCN 2015043601 Subjects: LCSH: Equality. | Income distribution. | Globalization—Social aspects. | Globalization—Economic aspects.

Available at http://papers.nber.org/books/frie54-1. Lakner, Christoph, and Anthony Atkinson. 2014. “Wages, Capital and Top Incomes: The Factor Income Composition of Top Incomes in the USA, 1960–2005.” Unpublished ms., November version. Lakner, Christoph, and Branko Milanovic. 2013. “Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession.” World Bank, Policy Research Working Paper, no. 6719, December. Available at http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-6719. Lakner, Christoph, and Branko Milanovic. 2015. “Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession.” World Bank Economic Review, Advance Access published August 12, 2015, doi: 10.1093/wber/lhv039. Landes, David. 1961. “Some Thoughts on the Nature of Economic Imperialism.”

Fortunately for our purposes here, such volatility affects estimated levels of global inequality much more than it affects changes in inequality (up or down) over time. The data used in this chapter come from more than 600 household surveys covering about 120 countries and more than 90 percent of the world’s population over the period 1988–2011. (Most of the data are available on my website: https://www.gc.cuny.edu/Page-Elements /Academics-Research-Centers-Initiatives/Centers-and-Institutes/Luxembourg-Income-Study-Center/Branko-Milanovic,-Senior-Scholar/Datasets.) In the more recent period, after the year 2000, all household survey data are available at the micro level (the level of individual household) with the big exception of China, which does not yet release microdata. All incomes are expressed in 2005 PPP (or international) dollars obtained from the 2005 ICP except where otherwise indicated. Detailed discussion of household surveys and PPPs used is provided by Lakner and Milanovic (2013).


pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"Robert Solow", accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, zero-sum game

I'd Hke to thank, among many, Laura Stare-cheski for her excellent research w^ork; my good friend Philippa Dunne for her many forms of collaboration; CoHn Robinson for being the best publisher one could ask for; and Andre Schiffrin and the staff of The New Press for both their professional skills and their role as splendid office-mates. Thanks also to Jared Bernstein, Patrick Bond, Heather Boushey, Tom Frank, Branko Milanovic, Christian Parenti, Michael Perehnan, Kim PhiUips-Fein, Nomi Prins, Max Sawicky, Michal SeHgman, Gregg Wirth, the members of the Ibo-talk Hstserv. And, most of all, thanks to my wife, Liza Featherstone, who not only made this a better book with her comments on the manuscript, but who makes Hfe worth Hving as well. After the New Economy Introduction For a while in the late 1990s we had a New Economy.

Average incomes—which usually mean GNP or GDP divided by population—tell you nothing about distribution; Brazil and Poland are at roughly equal per capita income levels, but Poland's poor get three times the share of national income that Brazil's claim, and its rich a lot less.^^ Estimates of global income distribution that uses people, rather than nations, as the unit of analysis, are preferable, but are extremely difficult to produce. Thankfully, World Bank economist Branko Milanovic has made a first attempt, about which more in a bit. Big picture According to economic theory, the income gaps between rich and poor countries should narrow over time, as laggards "catch up" with leaders. Proponents of such theories assume that technology is the driving force behind economic development; as technology diffuses throughout the world, the advantage enjoyed by the pioneers should fade.

They use an arbitrary poverty Hne, divorced from any cultural or social context. Many of the surveys they rely on are far from exhaustive, and they rely on currency conversions that may understate the real cost of Hving. These points are weU taken, and the World Bank estimates no doubt understate the case, but even their numbers are huge. It's easy for those of us who live in rich countries to forget that most people don't Hve like we do. Thanks to Branko Milanovic, we can put some firm numbers on the observation. Milanovic has made a pioneering effort to combine scores of national household surveys to come up with the first estimate of income distribution from the point of view of individual residents of the earth. His numbers are stunning. Of course, Milanovic couldn't get household survey data—that is, income estimates based on asking people questions about their incomes, as opposed to aggregates Hke national GDP accounts—^for every country.


pages: 223 words: 58,732

The Retreat of Western Liberalism by Edward Luce

"Robert Solow", 3D printing, affirmative action, Airbnb, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, carried interest, centre right, Charles Lindbergh, cognitive dissonance, colonial exploitation, colonial rule, computer age, corporate raider, cuban missile crisis, currency manipulation / currency intervention, Dissolution of the Soviet Union, Doha Development Round, Donald Trump, double entry bookkeeping, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, Fall of the Berlin Wall, Francis Fukuyama: the end of history, future of work, George Santayana, gig economy, Gini coefficient, global pandemic, global supply chain, illegal immigration, imperial preference, income inequality, informal economy, Internet of things, Jaron Lanier, knowledge economy, lateral thinking, liberal capitalism, Marc Andreessen, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, Monroe Doctrine, moral panic, more computing power than Apollo, mutually assured destruction, new economy, New Urbanism, Norman Mailer, offshore financial centre, one-China policy, Peace of Westphalia, Peter Thiel, plutocrats, Plutocrats, precariat, purchasing power parity, reserve currency, reshoring, Richard Florida, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Skype, Snapchat, software is eating the world, South China Sea, Steve Jobs, superstar cities, telepresence, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, Washington Consensus, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, World Values Survey, Yogi Berra

THE RETREAT OF WESTERN LIBERALISM Also by Edward Luce In Spite of the Gods: The Rise of Modern India Time to Start Thinking: America in the Age of Descent THE RETREAT OF WESTERN LIBERALISM EDWARD LUCE Atlantic Monthly Press New York Copyright © 2017 by Edward Luce Jacket design by Duncan Spilling - L,BBG Fig. 1, “The Elephant Chart”, printed with the permission of Branko Milanovic. All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the publisher, except by a reviewer, who may quote brief passages in a review. Scanning, uploading, and electronic distribution of this book or the facilitation of such without the permission of the publisher is prohibited.

The Bush expansion was the first on record where middle-class incomes were lower at the end of it than at the start. Today, the US median income is still below where it was at the beginning of this century. Clearly what the typical American understands by growth differs greatly from that of macroeconomists. GDP numbers insist we are doing well, at a time when half the country is suffering from personal recessions. The world’s most informative graph is the Elephant Chart.* Devised by Branko Milanovic, a former World Bank staffer, this statistical pachyderm has many virtues. It is intuitively simple and tells you pretty much everything you need to know about the era of high globalisation since the fall of the Berlin Wall. It shows the distribution of more than two decades of growth between different percentiles of the global economy. The global median – the emerging middle classes of China, Vietnam, India and so on – enjoyed income growth of more than 80 per cent in those years.

, National Interest (summer 1989). 2 Eric Hobsbawm, The Age of Extremes, 1941–1991 (Abacus, London, 1995). 3 Dan Jones, Magna Carta: The Birth of Liberty (Viking, New York, 2015), p. 4. 4 Interview with the author, January 2017. 5 Fareed Zakaria, The Post-American World: And the Rise of the Rest (Penguin, New York, 2009). 6 Henry Kissinger, World Order (Penguin, New York, 2014). Part One: Fusion 1 Alexis de Tocqueville, Democracy in America, Part II (1840). 2 J. A. Hobson, Imperialism: A Study (James Pott & Company, New York, 1902), p. 333. 3 Jamil Anderlini and Lucy Hornby, ‘China overtakes US as world’s largest goods trader’, Financial Times, 10 January 2014, <https://www.ft.com/content/7c2dbd70-79a6-11e3-b381-00144feabdc0>. 4 Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization (Belknap Press, Cambridge MA, 2016 (ebook)). 5 Danny Quah, ‘The Global Economy’s Shifting Centre of Gravity’, Global Policy, 2:1 (January 2011), <http://onlinelibrary.wiley.com/doi/10.1111/j.1758-5899.2010.00066.x/pdf>. 6 Milanovic, Global Inequality. 7 Hobson, Imperialism, p. 339. 8 Milanovic, Global Inequality. 9 Richard Baldwin: The Great Convergence: Information Technology and the New Globalization (Belknap Press, Cambridge MA, 2016 (ebook)). 10 Hugh White, The China Choice: Why We Should Share Power (Oxford University Press, Oxford, 2012 (ebook)). 11 The World Economic Forum’s website has a comprehensive database of each forum’s reports and sessions stretching back many years.


pages: 190 words: 61,970

Life You Can Save: Acting Now to End World Poverty by Peter Singer

accounting loophole / creative accounting, Branko Milanovic, Cass Sunstein, clean water, end world poverty, experimental economics, illegal immigration, Martin Wolf, microcredit, Monkeys Reject Unequal Pay, Peter Singer: altruism, pre–internet, purchasing power parity, randomized controlled trial, Richard Thaler, Silicon Valley, Thomas Malthus, ultimatum game, union organizing

Colombia is not an especially poor country; its aid is associated with the attempt to suppress the cocaine cartels. Only about one fifth of U.S. aid goes to countries classified by the OECD as “least developed,” while about half of all U.S. aid goes to “lower-middle-income” nations. Nor is it only the United States that gives aid to serve political aims rather than to help the extremely poor. Branko Milanovic, an economist at the World Bank, has examined the 2001 country-to-country aid disbursed by most OECD countries, and found that bilateral aid from the European Union— that is, the program run by the EU itself, which is separate from the individual aid programs of its member nations—is even more skewed than U.S. aid toward nations with a per capita income above the world average. Bilateral aid from Australia and Canada in that year was also pro-rich in the sense that richer countries received more money in per capita terms than did poorer countries.

On that basis, the task force reached a global estimate—which the task force warns is provisional, but believes is of “the right order of magnitude”— of $121 billion in 2006, rising to $189 billion by 2015.5 When we take account of existing official development aid promises, the additional amount needed each year to meet the goals is only $48 billion for 2006 and $74 billion for 2015. Now we can calculate how much each affluent person would have to contribute for the combined sum to meet these totals and achieve these results. According to Branko Milanovic of the World Bank, if we define the “rich” as those who have an income above the average income of Portugal (the lowest-income nation in the “rich club” of western Europe, North America, Japan, Australia, and New Zealand) then there are 855 million rich people in the world.6 If each of us gave $200 per year, that would total $171 billion, or roughly the amount Sachs’s United Nations task force believes is needed each year to meet the Millennium Development Goals.

See United Nations Human Development Report, 1995, p. 204, table 29, available at http://hdr.undp.org/en/media/hdr _1995_en_indicators2.pdf 3. Organisation for Economic Co-operation and Development (OECD) Donor Aid Charts, www.oecd.org/countrylist/0,2578,en_2649_374l3_1783495_l_l_l_374l3,00.html;see also Oxfam America, “Smart Development: Why U.S. Foreign Aid Demands Major Reform,” February 2008, www.oxfamamerica.org/newsandpublications/publications/briefing_papers/smart-development/smart-development-feb2008.pdf 4. Branko Milanovic, Worlds Apart: Measuring International and Global Inequality (Princeton, N.J.: Princeton University Press, 2005), pp. 152-53, table 12.1; United Nations Human Development Report, 2007-2008, p. 289, Table 17, available at http://hdr.undp.org/en/media/hdr_20072008_en _indicator_tables. p df. 5. Celia Dugger, “Kenyan Farmers’ Fate Caught Up in U.S. Aid Rules,” The New York Times, July 31, 2007; Editorial, “A Surer Way to Feed the Hungry,” The New York Times, August 4, 2007; Celia Dugger, “U.S.


pages: 235 words: 62,862

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman

autonomous vehicles, banking crisis, Bartolomé de las Casas, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, Branko Milanovic, cognitive dissonance, computer age, conceptual framework, credit crunch, David Graeber, Diane Coyle, Erik Brynjolfsson, everywhere but in the productivity statistics, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Gilder, George Santayana, happiness index / gross national happiness, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, income inequality, invention of gunpowder, James Watt: steam engine, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, low skilled workers, means of production, megacity, meta analysis, meta-analysis, microcredit, minimum wage unemployment, Mont Pelerin Society, Nathan Meyer Rothschild: antibiotics, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, post-industrial society, precariat, RAND corporation, randomized controlled trial, Ray Kurzweil, Ronald Reagan, Second Machine Age, Silicon Valley, Simon Kuznets, Skype, stem cell, Steven Pinker, telemarketer, The Future of Employment, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tyler Cowen: Great Stagnation, universal basic income, wage slave, War on Poverty, We wanted flying cars, instead we got 140 characters, wikimedia commons, women in the workforce, working poor, World Values Survey

For the original version of John’s story, see: Michael Huemer, “Citizenism and open borders.” http://openborders.info/blog/citizenism-and-open-borders 25. Branko Milanovic, “Global Income Inequality by the Numbers: in History and Now,” World Bank Policy Research Working Paper. http://heymancenter.org/files/events/milanovic.pdf 26. Richard Kersley, “Global Wealth Reaches New All-Time High,” Credit Suisse. https://publications.credit-suisse.com/tasks/render/file/?fileID=F2425415-DCA7-80B8-EAD989AF9341D47E 27. United Nations Sustainable Development Knowledge Platform, “A New Global Partnership: Eradicate Poverty and Transform Economies Through Sustainable Development” (2013), p. 4. http://www.un.org/sg/management/pdf/HLP_P2015_Report.pdf 28. I made these calculations using the tool on the website www.givingwhatwecan.org, where you see how your wealth compares to the world population. 29. Branko Milanovic, “Global income inequality: the past two centuries and implications for 21st century” (Fall 2011) http://www.cnpds.it/documenti/milanovic.pdf 30. “62 people own same as half world,” Oxfam (January 20, 2014). http://www.oxfam.org.uk/media-centre/press-releases/2016/01/62-people-own-same-as-half-world-says-oxfam-inequality-report-davos-world-economic-forum 31.

Now compare: American frontline soldiers had a mortality rate of 6.7% in the Civil War, 1.8% in WWII, and 0.5% in the Vietnam War.31 Yet we won’t hesitate to send that Somalian toddler back if it turns out her mother isn’t a “real” refugee. Back to the Somalian child mortality front. In the 19th century, inequality was still a matter of class; nowadays, it’s a matter of location. “Workers of the world, unite!” was the rallying cry back when all the poor everywhere were more or less equally miserable. But now, as the World Bank’s lead economist Branko Milanovic notes, “Proletarian solidarity is then simply dead because there is no longer such a thing as the global proletariat.”32 In the Land of Plenty, the poverty line is 17 times higher than in the wilds beyond Cockaigne.33 Even food stamp recipients in the U.S. live like royalty compared to the poorest people in the world. Still, we mostly reserve our outrage for the injustices that happen inside our own national borders.

Yet, it’s crucial to realize that all this would have seemed like a breath of fresh air to the medieval peasant. Slavery was positively lenient compared to the customary repertoire of hanging, quartering, and burning at the stake. But it’s also worth noting that many commentators didn’t catch on to More’s intended irony because they didn’t read his book in the original Latin. Our tour guide in More’s utopia, for example, is named Hythlodaeus, which translates as “speaker of nonsense.” 34. Branko Milanovic, “Global Inequality: From Class to Location, from Proletarians to Migrants,” World Bank Policy Research Working Paper (September 2011). http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-5820 2 A 15-Hour Workweek 1. John Maynard Keynes, “Economic Possibilities for our Grandchildren” (1930), Essays in Persuasion. http://www.econ.yale.edu/smith/econ116a/keynes1.pdf 2. John Stuart Mill, Principles of Political Economy with some of their Applications to Social Philosophy (1848), Book IV, Chapter VI. http://www.econlib.org/library/Mill/mlP61.html 3.


pages: 393 words: 115,178

The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program That Shaped Our World by Vincent Bevins

Albert Einstein, American ideology, anti-communist, Berlin Wall, Branko Milanovic, British Empire, centre right, colonial rule, crony capitalism, cuban missile crisis, Deng Xiaoping, European colonialism, Fall of the Berlin Wall, feminist movement, Gini coefficient, income inequality, land reform, market fundamentalism, megacity, Nelson Mandela, RAND corporation, Ronald Reagan, sexual politics, South China Sea, structural adjustment programs, union organizing

Purely for reference, inequality within the United States is around 41.5 (World Bank estimate). Some of the most equal societies on Earth, often in Northern Europe, hit lows of around 25, and South Africa, one of the world’s most unequal nations, has a GINI index of 65. Data for the graph was provided by economist Branko Milanovic. The dotted line (weighted by country population) more clearly shows the effects of Chinese growth. For more on his methods, see Branko Milanovic, Global Inequality. Appendix 4 Global Inequality, 1960–2017 This graph is reproduced with permission from Jason Hickel, The Divide (William Heinemann, 2017). Appendix 5 Anticommunist Extermination Programs, 1945–2000 The map above illustrates intentional mass murder carried out to eliminate leftists or accused leftists, and does not include deaths from regular war, collateral damage from military engagements, or unintentional deaths (starvation, disease) caused by anticommunist governments.

I wrote a dissertation on the effects of Federal Reserve interest rate policy in the early 1980s on debt burden and development programs. I know how complicated this is, and we’re not going to resolve it now. 3. Gautam Nair, “Most Americans Vastly Underestimate How Rich They Are Compared with the Rest of the World. Does It Matter?” Washington Post, August 23, 2018. 4. Branko Milanovic, “Income, Inequality, and Poverty during the Transition from Planned to Market Economy,” World Bank Regional and Sectoral Studies, chap. 3, www.gc.cuny.edu/CUNY_GC/media/CUNY-Graduate-Center/PDF/Centers/LIS/Milanovic/papers/Income_ineq_poverty_book.pdf. 5. Branko Milanovic, “For Whom the Wall Fell?” The Globalist, November 7, 2014. 6. Westad, The Global Cold War, 387. 7. On the “strong and widespread global trend toward neoliberalism since the 1980s,” see Jonathan D. Ostry, Prakash Loungani, and Davide Furceri, “Neoliberalism: Oversold?”

He is very open about problems with the socialist system in his country, but said that the government in Vietnam, much like in China and the rest of what’s left of the socialist world, watched very carefully what happened to the Soviet Union and its satellites after 1989, and are desperate to avoid repeating those experiences. Certainly, the leaders of the Communist Parties who ran the Soviet Union and the Warsaw Pact countries lost, and lost big. But what about their citizens, the regular, suffering peoples of the communist world? Did the triumph of global capitalism mean victory for them too? Were they rewarded with prosperity and democracy? Economist Branko Milanovic, one of the world’s foremost experts on global inequality, born and raised in communist Yugoslavia, asked those questions on the twenty-fifth anniversary of the fall of the Berlin wall. We can probably guess that no, they didn’t all get that. But it was certainly the idea back in 1991, and in many ways it was the promise that was made to the suffering peoples of the communist world, including to Milanovic himself.


pages: 463 words: 105,197

Radical Markets: Uprooting Capitalism and Democracy for a Just Society by Eric Posner, E. Weyl

3D printing, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, anti-communist, augmented reality, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, business process, buy and hold, carbon footprint, Cass Sunstein, Clayton Christensen, cloud computing, collective bargaining, commoditize, Corn Laws, corporate governance, crowdsourcing, cryptocurrency, Donald Trump, Elon Musk, endowment effect, Erik Brynjolfsson, Ethereum, feminist movement, financial deregulation, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, guest worker program, hydraulic fracturing, Hyperloop, illegal immigration, immigration reform, income inequality, income per capita, index fund, informal economy, information asymmetry, invisible hand, Jane Jacobs, Jaron Lanier, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, labor-force participation, laissez-faire capitalism, Landlord’s Game, liberal capitalism, low skilled workers, Lyft, market bubble, market design, market friction, market fundamentalism, mass immigration, negative equity, Network effects, obamacare, offshore financial centre, open borders, Pareto efficiency, passive investing, patent troll, Paul Samuelson, performance metric, plutocrats, Plutocrats, pre–internet, random walk, randomized controlled trial, Ray Kurzweil, recommendation engine, rent-seeking, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Rory Sutherland, Second Machine Age, second-price auction, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, special economic zone, spectrum auction, speech recognition, statistical model, stem cell, telepresence, Thales and the olive presses, Thales of Miletus, The Death and Life of Great American Cities, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, trickle-down economics, Uber and Lyft, uber lyft, universal basic income, urban planning, Vanguard fund, women in the workforce, Zipcar

Since 2005, productivity growth has slowed by a full percentage point, to around 1.25%.9 FIGURE I.4: Global inequality that is across as opposed to within countries from 1820 to 2011, measured by the mean logarithmic deviation (see chapter 3). This series is based on a merger of the data of François Bourguignon and Christian Morrisson, Inequality Among World Citizens: 1820–1992, 92 American Economic Review 4 (2002), and Branko Milanovic, Global Inequality of Opportunity: How Much of Our Income Is Determined by Where We Live?, 97 Review of Econonomics & Statistics 2 (2015), performed by Branko Milanovic as a favor to us. FIGURE I.5: Average annual real productivity growth around the world for various regions or countries and time periods, 1950–2013. Source: OECD. This phenomenon has been less dramatic in the United States than in other wealthy countries. Figure I.5 shows productivity growth in countries around the world beginning in 1950.10 Overall, productivity growth has dramatically fallen since midcentury, with the exceptions of the 1995–2004 period in certain wealthy countries and the different trend observed in developing countries.

FIGURE 3.1: Global inequality, both in total (black) and decomposed into between (dark gray) and within (light gray) country components from 1820 to 2011. Source: This series is based on a merger of the data of François Bourguignon and Christian Morrisson, Inequality Among World Citizens: 1820–1992, 92 American Economic Review 4 (2002), and Branko Milanovic, Global Inequality of Opportunity: How Much of Our Income Is Determined by Where We Live?, 97 Review of Econonomics & Statistics 2 (2015), performed by Branko Milanovic as a favor to us. Together these patterns imply that inequality across countries has gone from a relatively insignificant phenomenon in the grand scheme of global inequality, accounting for only a little more than 10% of global inequality in the 1820s, to being the dominant source of global inequality, accounting for two-thirds or more in the second half of the twentieth century and still today accounting for 60–70% depending on whose measurements you rely upon.9 This puts into quantitative perspective the very different world we confront today, compared to the one nineteenth-century political economists faced.

We are also grateful to a talented team of research assistants. Graham Haviland, Eliot Levmore, Stella Shannon, Han-ah Sumner, and Jill Rogowski provided invaluable assistance. A conference on our manuscript hosted by the Cowles Foundation at Yale University and supported enthusiastically by its director Larry Samuelson helped shape our thinking. Seven discussants (Ian Ayres, Dirk Bergemann, Jacob Hacker, Nicole Immorlica, Branko Milanovic, Tim Shenk, and Matt Weinzierl) provided us vital feedback. Tim was particularly helpful in shaping our understanding of the relevant history of ideas. We also received comments from many friends and colleagues, including Anna Blender, Charlotte Cavaille, Patrick Collison, Adam Cox, Richard Eskow, Marion Fourcade, Alex Peysakovich, Greg Shaw, Itai Sher, Steve Swig, Tommaso Valetti, and Steve Weyl.


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Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, starchitect, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

“hate me—they don’t understand” See Chrystia Freeland, “Tea with the FT: Yulia Tymoshenko,” Financial Times, August 16, 2008. number of billionaires relative to the size Ruchir Sharma.,“The billionaires list,” Washington Post’s Wonkblog, June 24, 2012. economic historians have found that Russia’s oligarchs Steven Nafziger and Peter Lindert, “Russian Inequality on the Eve of the Revolution” (working paper, March 13, 2011). according to calculations by Branko Milanovic Branko Milanovic, The Haves and the Have Nots: A Brief and Idiosyncratic History of Global Inequality (Basic Books, 2011), pp. 41–45. “A person must be rich or poor” Smith, Wealth of Nations, Book I, Chapter V, Section 1. the only place in Mexico Luhnow, “The Secrets of the World’s Richest Man.” Slim was a vocal supporter of his friend’s reform effort Slim continued to advocate privatization in subsequent decades.

In memory of my mother, Halyna Chomiak Freeland CONTENTS Title Page Copyright Dedication Introduction ONE HISTORY AND WHY IT MATTERS TWO CULTURE OF THE PLUTOCRATS THREE SUPERSTARS FOUR RESPONDING TO REVOLUTION FIVE RENT-SEEKING SIX PLUTOCRATS AND THE REST OF US CONCLUSION Acknowledgments Notes Bibliography Index INTRODUCTION The poor enjoy what the rich could not before afford. What were the luxuries have become the necessaries of life. The laborer has now more comforts than the farmer had a few generations ago. The farmer has more luxuries than the landlord had, and is more richly clad and better housed. The landlord has books and pictures rarer and appointments more artistic than the king could then obtain. —Andrew Carnegie Branko Milanovic is an economist at the World Bank. He first became interested in income inequality studying for his PhD in the 1980s in his native Yugoslavia, where he discovered it was officially viewed as a “sensitive” subject—which meant one the ruling regime didn’t want its scholars to look at too closely. That wasn’t a huge surprise; after all, the central ideological promise of socialism was to deliver a classless society.

But the irony of the victory of the liberal economic idea is that putting it into practice delivered the greatest rent-seeking windfall in economic history—the state, after all, was in charge of privatization. Influencing that one-off division of the spoils was one of the surest ways to join today’s global super-elite. WHO WAS THE RICHEST MAN IN HISTORY? In fact, according to calculations by Branko Milanovic, the richest man who ever lived isn’t a Russian oligarch, but he does owe much of his fortune to the great wave of liberalization that swept the world when Soviet communism collapsed. Comparing income across history is hard. The conversion tools we use to make comparisons across geographies today—currency exchange rates or the more subtle measure of purchasing power parity—are ineffective when the goods we consume—horses vs. private jets or personal scribes vs. iPads—are so different.


Capitalism, Alone: The Future of the System That Rules the World by Branko Milanovic

"Robert Solow", affirmative action, Asian financial crisis, assortative mating, barriers to entry, basic income, Berlin Wall, bilateral investment treaty, Black Swan, Branko Milanovic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, colonial rule, corporate governance, creative destruction, crony capitalism, deindustrialization, dematerialisation, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, ghettoisation, gig economy, Gini coefficient, global supply chain, global value chain, high net worth, income inequality, income per capita, invention of the wheel, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, low skilled workers, Lyft, means of production, new economy, offshore financial centre, Paul Samuelson, plutocrats, Plutocrats, post-materialism, purchasing power parity, remote working, rent-seeking, ride hailing / ride sharing, Silicon Valley, single-payer health, special economic zone, The Wealth of Nations by Adam Smith, Thorstein Veblen, uber lyft, universal basic income, Vilfredo Pareto, Washington Consensus, women in the workforce, working-age population, Xiaogang Anhui farmers

Proceedings of the National Academy of Sciences 111(19): 6928–6933. Xu Chenggang. 2011. “The Fundamental Institutions of China’s Reforms and Development.” Journal of Economic Literature 49(4): 1076–1151. Yang, Li, Filip Novokmet, and Branko Milanovic. 2019. “From Workers to Capitalists in Less than Two Generations: A Study of Chinese Urban Elite Transformation between 1988 and 2013.” Unpublished manuscript. Yonzan, Nishant. 2018. “Assortative Mating and Labor Income Inequality: United States 1970–2017.” Unpublished manuscript. Yonzan, Nishant, Branko Milanovic, Salvatore Morelli, and Janet Gornick. 2018. “Comparing Top Incomes between Survey and Tax Data: US Case Study.” LIS “Inequality Matters” Newsletter, Issue 6, pp. 10–11, LIS Cross-National Data Center in Luxembourg, June. https://www.lisdatacenter.org/newsletter/nl-2018-6-h-4/.

CAPITALISM, ALONE The Future of the System That Rules the World BRANKO MILANOVIC THE BELKNAP PRESS OF HARVARD UNIVERSITY PRESS Cambridge, Massachusetts London, England 2019 Copyright © 2019 by the President and Fellows of Harvard College All rights reserved Jacket art: background: wepix/E+/Getty Images; inset: medobear/DigitalVision Vectors/Getty Images Jacket design: Jill Breitbarth 978-0-674-24286-9 (EPUB) 978-0-674-24287-6 (MOBI) 978-0-674-24285-2 (PDF) Library of Congress Cataloging-in-Publication Data is available from loc.gov ISBN: 978-0-674-98759-3 (alk. paper) CONTENTS 1. The Contours of the Post–Cold War World 2. Liberal Meritocratic Capitalism 3. Political Capitalism 4. The Interaction of Capitalism and Globalization 5. The Future of Global Capitalism Appendix A.

It is not always clear what should be included in the capital share. The issue is explained in Appendix C. 14. On monopoly power and rising capital share, see Kurz (2018). He finds that the “surplus income” (the share of monopoly profit in output value) increased in the United States from virtually 0 in 1986 to 22 percent in 2015 (table 7). On monopsony power, see Azar, Marinescu, and Steinbaum (2017). 15. See Branko Milanovic, “Bob Solow on Rents and Decoupling of Productivity and Wages,” Globalinequality blog, May 2, 2015, http://glineq.blogspot.com/2015/05/bob-solow-on-rents-and-decoupling-of.html. 16. The market power, or rent-seeking, explanation for the rising share of capital versus labor has been adduced by a number of economists, including by Angus Deaton in an interview with editors of the ProMarket blog on February 8, 2018: https://promarket.org/angus-deaton-discussed-driver-inequality-america-easier-rent-seekers-affect-policy-much-europe/. 17.


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The Globalization of Inequality by François Bourguignon

Berlin Wall, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Credit Default Swap, deglobalization, deindustrialization, Doha Development Round, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, financial intermediation, gender pay gap, Gini coefficient, income inequality, income per capita, labor-force participation, liberal capitalism, minimum wage unemployment, offshore financial centre, open economy, Pareto efficiency, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus

During the last few years, rising inequality in certain countries, notably the United States, has been the subject of or inspiration for several major books—among which it would be difficult to overstate the importance of two recent books by Joseph Stiglitz and Thomas Piketty, the success of which is a clear sign of the mounting public interest in the issue of inequality.2 While few books address global income inequality directly, with the exception of Branko Milanovic’s Worlds Apart,3 many have analyzed inequalities in development between 2 Joseph Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: Norton, 2012); Thomas Piketty, Capital in the Twenty-­First Century (Cambridge, MA: Harvard University Press, 2013). 3 Branko Milanovic, Worlds Apart, Measuring International and Global Inequality (Princeton, NJ: Princeton University Press, 2005). Globalization and Inequality5 countries or regions, which are the principal determinants of inequality at the world level.

Journal of Economic Literature 46, no. 1 (2008): 57–94; and “The Global Distribution of Income” in Anthony B. Atkinson and François Bourguignon, Handbook of Income Distribution, volume 2 (Amsterdam: Elsevier, forthcoming). For the GDP per capita approach, see Xavier Sala-­i-­Martin, “The World Distribution of Income: Falling Poverty and . . . Convergence, Period,” Quarterly Journal of Economics 121, no. 2 (December 2006): 351–97; and for its critique, see Branko Milanovic, “The Ricardian Vice: Why Sala-­i-­Martin’s Calculations of World Income Inequality Are Wrong” (Washington, DC: World Bank, November 2002). 5 Joseph E. Stiglitz, Amartya Sen, and Jean-­Paul Fitoussi (with a preface by Nicolas Sarkozy), Mismeasuring Our Lives: Why GDP Doesn’t Add Up (New York: New Press, 2010). Global Inequality15 from household surveys. The lively debate sparked in India by the divergence between the growth rate of household consumption expenditure per capita as given by the national accounts and by household surveys in the 1990s is proof that there can be a potentially significant divergence between the two approaches.6 This divergence is even more problematic when it comes to establishing the comparative framework necessary for estimating global inequality.

In fact, once we stop normalizing and use the original household survey data, estimates of global distribution show a slightly slower reversal in inequality trends. The acceleration then takes place in the 2000s rather than the mid-­ 1990s.16 Since this represents a more recent phenomenon, maybe it has not registered for everyone yet. See table 2 in the appendix to this chapter. Using a different database, Christoph Lakner and Branko Milanovic (“Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession,” World Bank Policy Research Working Paper No. 6719, Washington, DC, 2013) found the same drop in inequality in the 2000s, although less pronounced than in table 2. Two recent draft papers reach the same conclusion. The first one, by Miguel Niño-­Zarazay, Laurence Roopez, and Finn Tarp, “Global Interpersonal Inequality: Trends and Measurement” (WIDER Working Paper 2014/004) based on GDP per capita normalized data finds that the drop in global inequality may have started around 1980.


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The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

"Robert Solow", Airbnb, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, centre right, collective bargaining, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, future of work, gig economy, Gini coefficient, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low skilled workers, manufacturing employment, Martin Wolf, meta analysis, meta-analysis, mini-job, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

Whoever is blamed, the idea of usurpation is central to this message, which fringe political figures have been promoting for decades (and indeed regularly throughout the West’s modern history). But it took an elephant to make the usurpation story go mainstream. FIGURE 2.1. Income growth, 1988–2008, for each 5 per cent global income group and top 1 per cent. Source: Christoph Lakner and Branko Milanovic, “Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession,” World Bank Economic Review 30, no. 2 (July 2016): 203–232, https://elibrary.worldbank.org/doi/abs/10.1093/wber/lhv039. This elephant first appeared a few years after the global financial crisis, in a statistical graphic developed by economists Christoph Lakner and Branko Milanovic (Figure 2.1). Summarising hundreds of surveys of living standards around the world, the “elephant chart” depicts how each segment of the global income distribution—from the world’s very poorest to the global top 1 per cent—has fared over the last few decades.

Mark Blyth, Erik Jones, Anand Menon, Ernesto Semán, Tormod Stangeland, and Giles Wilkes all read drafts. Among the many people who have over the years given me ideas, information, inspiration, knowledge, feedback, or encouragement are Dimitra Alexopoulou, David Autor, Richard Baldwin, Torsten Bell, Jared Bernstein, Michael Goldfarb, Heather Grabbe, Jason Furman, Arancha Gonzalez, Sandra Kanthal, Joris Luyendijk, Philippe Martin, Branko Milanovic, Karl Ove Moene, Yascha Mounk, Christian Odendahl, Jan Piotrowski, Dani Rodrik, John Springford, Simon Tilford, Kevin O’Rourke, Betsey Stevenson, Arvind Subramanian, Adam Tooze, Karen Helene Ulltveit-Moe, Anne Case, Diane Coyle, Angus Deaton, Swati Dhingra, Ben Friedman, Marcel Fratzscher, David McWilliams, Halvor Mehlum, Adrian Wood, and many, many more. I thank them all and apologise for the many names I have surely left out.

Better understanding how the world is connected can sometimes spur us to be motivated by something more than our own narrow self-interest, in the knowledge that in the longer term, our deepest interests are bound up with those others who live very different lives from ours. That knowledge is the foundation for a fair and liberal society, and it has rarely been more urgently needed than today. NOTES Chapter 1. The End of Belonging 1. Indeed, the economist and inequality scholar Branko Milanovic classifies China’s “political capitalism” as a subvariant of a globally dominant capitalist system in his account of a global economy where capitalism is now unchallenged. Milanovic, Capitalism, Alone: The Future of the System That Rules the World, Cambridge, MA: Belknap Press of Harvard University Press, 2019. Chapter 2. Who Are the Left Behind? 1. Clifford Krauss, “Texas Oil Fields Rebound from Price Lull, but Jobs Are Left Behind,” New York Times, 19 February 2017, https://www.nytimes.com/2017/02/19/business/energy-environment/oil-jobs-technology.html. 2.


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The Great Surge: The Ascent of the Developing World by Steven Radelet

"Robert Solow", Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, creative destruction, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global pandemic, global supply chain, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, land reform, low skilled workers, M-Pesa, megacity, Mikhail Gorbachev, Nelson Mandela, off grid, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Second Machine Age, secular stagnation, Simon Kuznets, South China Sea, special economic zone, standardized shipping container, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, women in the workforce, working poor

In the first system, China and India count the same as Burundi and Belize; in the second, China and India count for a lot, and Burundi and Belize don’t count much. It matters (or at least it used to) which you choose. Figure 3.5, constructed by economist Branko Milanovic, depicts both stories.23 The bottom line shows intercountry inequality based on unweighted averages (every country counts the same), and the top line represents the weighted average (proportional to population size). Each measures inequality using the Gini coefficient in which 0 means perfect equality and 1 means perfect inequality. The two lines show very different patterns—at least until around 2000. FIGURE 3.5: GLOBAL INEQUALITY—GETTING BETTER Source: Branko Milanovic, “Global Income Inequality by the Numbers: In History and Now—An Overview,” policy research working paper 6259, World Bank, Development Research Group, Poverty and Inequality Team, Washington, DC, November, 2012.

An updated version of the latter paper (written with Tatjana Kleineberg) is “Growth Still Is Good for the Poor,” policy research working paper 6568, World Bank, Development Research Group, Macroeconomics and Growth Team, Washington, DC, August 2013, http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-6568. 20. Dollar and Kraay, “Growth Is Good for the Poor.” 21. Branko Milanovic, The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality (New York: Basic Books, 2011). 22. De Souza, “Poverty, Inequality, and Social Policies in Brazil.” 23. Branko Milanovic, “Global Income Inequality by the Numbers: In History and Now—An Overview,” policy research working paper 6259, World Bank, Development Research Group, Poverty and Inequality Team, Washington, DC, November 2012, http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-6259. 24. Ibid., p. 6.

If countries, do we weigh them all the same or count large countries more than small ones? Because of these variables, it is not unusual to hear contrasting claims about income inequality. One person claims it is getting better, while another claims it is getting worse, but the difference comes down to how he or she defines inequality. In the context of development, the two most common notions of inequality are within countries and across countries. Economist Branko Milanovic explores these and other ideas about inequality in developing countries in his terrific book The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality.21 Inequality Within Countries Most people have a strong presumption that inequality within countries worsens as economic growth proceeds, and—possibly—gets better at higher income levels. Much of the early research on development, especially the work of Simon Kuznets and Sir Arthur Lewis in the 1950s, suggested that would be the case.


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More From Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources – and What Happens Next by Andrew McAfee

back-to-the-land, Bartolomé de las Casas, Berlin Wall, bitcoin, Branko Milanovic, British Empire, Buckminster Fuller, call centre, carbon footprint, clean water, cleantech, cloud computing, Corn Laws, creative destruction, crony capitalism, David Ricardo: comparative advantage, decarbonisation, dematerialisation, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, energy transition, Erik Brynjolfsson, failed state, Fall of the Berlin Wall, Haber-Bosch Process, Hans Rosling, humanitarian revolution, hydraulic fracturing, income inequality, indoor plumbing, intangible asset, James Watt: steam engine, Jeff Bezos, job automation, John Snow's cholera map, joint-stock company, Joseph Schumpeter, Khan Academy, Landlord’s Game, Louis Pasteur, Lyft, Marc Andreessen, market fundamentalism, means of production, Mikhail Gorbachev, oil shale / tar sands, Paul Samuelson, peak oil, precision agriculture, profit maximization, profit motive, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, Scramble for Africa, Second Machine Age, Silicon Valley, Steve Jobs, Steven Pinker, Stewart Brand, telepresence, The Wealth of Nations by Adam Smith, Thomas Davenport, Thomas Malthus, Thorstein Veblen, total factor productivity, Uber and Lyft, uber lyft, Veblen good, War on Poverty, Whole Earth Catalog, World Values Survey

gives voice to their perceptions: Arlie Russell Hochschild, Strangers in Their Own Land: Anger and Mourning on the American Right (New York: New Press, 2016), Kindle, location 139. The famous Elephant Graph, drawn by economists Branko Milanovic and Christoph Lakner: Christoph Lakner and Branko Milanovic, Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession (Washington, DC: World Bank, 2013), http://documents.worldbank.org/curated/en/914431468162277879/pdf/WPS6719.pdf. Increase in Real Income, 1988–2008: Ibid. “The people who gained the least were almost entirely from the ‘mature economies’ ”: Branko Milanovic, “Global Income Distribution since 1988,” CEPR Policy Portal, accessed March 25, 2019, https://voxeu.org/article/global-income-distribution-1988. They’re much closer to flat lines: Paul Krugman, “Hyperglobalization and Global Inequality,” New York Times, November 30, 2015, https://krugman.blogs.nytimes.com/2015/11/30/hyperglobalization-and-global-inequality/.

But it’s people like you who have made this country great. You feel uneasy. It has to be said: the line cutters irritate you. They are violating rules of fairness. You resent them, and you feel it’s right that you do.”V Both of these books, and many other recent investigations, have focused on middle-class to lower-middle-class households and communities. The famous Elephant Graph, drawn by economists Branko Milanovic and Christoph Lakner, helps us understand why this segment of society might be feeling so much alienation and resentment. Milanovic and Lakner had the great idea to essentially line up all the people in the world from poorest to richest, then see how much their incomes changed between 1988 and 2008. The resulting graph looked to many like a drawing of an elephant with its trunk in the air.


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The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century by Walter Scheidel

agricultural Revolution, assortative mating, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, colonial rule, Columbian Exchange, conceptual framework, corporate governance, cosmological principle, crony capitalism, dark matter, declining real wages, demographic transition, Dissolution of the Soviet Union, Downton Abbey, Edward Glaeser, failed state, Fall of the Berlin Wall, financial deregulation, fixed income, Francisco Pizarro, full employment, Gini coefficient, global pandemic, hiring and firing, income inequality, John Markoff, knowledge worker, land reform, land tenure, low skilled workers, means of production, mega-rich, Network effects, nuclear winter, offshore financial centre, plutocrats, Plutocrats, race to the bottom, recommendation engine, rent control, rent-seeking, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, Simon Kuznets, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, transatlantic slave trade, universal basic income, very high income, working-age population, zero-sum game

It is entirely my own fault that I have not been as receptive to their comments as I surely ought to have been. I am extremely grateful to a number of colleagues who generously shared their unpublished work with me: Guido Alfani, Kyle Harper, Michael Jursa, Geoffrey Kron, Branko Milanovic, Ian Morris, Henrik Mouritsen, Josh Ober, Peter Lindert, Bernhard Palme, Şevket Pamuk, Mark Pyzyk, Ken Scheve, David Stasavage, Peter Turchin, and Jeffrey Williamson. Brandon Dupont and Joshua Rosenbloom very helpfully generated and shared statistics on wealth distribution in the United States during the Civil War period. Leonardo Gasparini, Branko Milanovic, Şevket Pamuk, Leandro Prados de la Escosura, Ken Scheve, Mikael Stenkula, Rob Stephan, and Klaus Wälde kindly sent me data files. Stanford economics major Andrew Granato provided valuable research assistance. I completed this project during a Stanford Humanities and Arts Enhanced Sabbatical Fellowship granted for the academic year of 2015/2016: my thanks go to my deans, Debra Satz and Richard Saller, for their support in this matter (in addition to many others).

424 Appendix: The Limits of Inequality 445 Bibliography 457 Index 495 FIGURES AND TABLES FIGURES I.1Top 1 percent income share in the United States (per year) and references to “income inequality” (three-year moving averages), 1970–2008 1.1General form of the social structure of agrarian societies 3.1Inequality trends in Europe in the long run 3.2Gini coefficients of wealth distribution in Italy and the Low Countries, 1500–1800 3.3Ratio of mean per capita GDP to wages and real wages in Spain, 1277–1850 3.4Inequality trends in Latin America in the long run 3.5Inequality trends in the United States in the long run 4.1Top income shares in Japan, 1910–2010 5.1Top 1 percent income shares in four countries, 1935–1975 5.2Top 0.1 percent income shares in Germany and the United Kingdom 5.3Top 1 percent wealth shares in ten countries, 1740–2011 5.4Ratios of private wealth to national income in France, Germany, the United Kingdom, and the world, 1870–2010 5.5Capital income share in total gross income for top 1 percent of incomes in France, Sweden, and the United States, 1920–2010 5.6The share of government spending in national income in seven countries, 1913–1918 5.7Top marginal tax rates in nine countries, 1900–2006 5.8Average top rates of income and inheritance taxation in twenty countries, 1800–2013 5.9World War I and average top rates of income taxation in seventeen countries 5.10Top 1 percent income share in Germany, 1891–1975 5.11Top 1 percent income share in Sweden, 1903–1975 5.12State marginal income tax rates in Sweden, 1862–2013 5.13Trade union density in ten OECD countries, 1880–2008 6.1Military size and mobilization rates in years of war in great power states, 1650–2000 6.2Gini coefficients of income and top 0.01 percent income share in Spain, 1929–2014 9.1Median house sizes in Britain from the Iron Age to the Early Middle Ages 9.2House size quartiles in Britain from the Iron Age to the Early Middle Ages 9.3Gini coefficients of house sizes in Britain from the Iron Age to the Early Middle Ages 10.1Real wages of urban unskilled workers in Europe and the Levant, 1300–1800 10.2Real wages of urban skilled workers in Europe and the Levant, 1300–1800 10.3Rural real wages measured in terms of grain in England, 1200–1869 10.4Top 5 percent wealth shares and Gini coefficients of wealth distribution in the cities of Piedmont, 1300–1800 10.5Gini coefficients of wealth in Poggibonsi, 1338–1779 10.6Top 5 percent wealth shares in Tuscany, 1283–1792 10.7Top 5 percent wealth shares and Gini coefficients of wealth distribution in Lucca, 1331–1561 11.1Real wages expressed in multiples of bare-bones consumption baskets in central Mexico, 1520–1820 11.2Daily wheat wages of unskilled rural and urban workers in Egypt, third century BCE to fifteenth century CE 11.3Changes in real prices and rents between 100–160s and 190s–260s CE in Roman Egypt 11.4Wealth inequality in Augsburg: number of taxpayers, average tax payments, and Gini coefficients of tax payments, 1498–1702 13.1Gross National Income and Gini coefficients in different countries, 2010 13.2Estimated and conjectured income Gini coefficients for Latin America, 1870–1990 (population-weighted averages for four, six, and sixteen countries) 14.1Counterfactual inequality trends in the twentieth century 15.1Top 1 percent income shares in twenty OECD countries, 1980–2013 A.1Inequality possibility frontier A.2Estimated income Gini coefficients and the inequality possibility frontier in preindustrial societies A.3Extraction rates for preindustrial societies and their counterpart modern societies A.4Inequality possibility frontier for different values of the social minimum A.5Different types of inequality possibility frontiers TABLES 2.1The development of the largest reported fortunes in Roman society and the population under Roman control, second century BCE to fifth century CE 5.1The development of top income shares during the world wars 5.2Variation in the rate of reduction of top 1 percent income shares, by period 6.1Property in 1870 relative to 1860 (1860 = 100), for Southern whites 6.2Inequality of Southern household incomes 8.1Income shares in France, 1780–1866 11.1Share and number of taxable households in Augsburg by tax bracket, 1618 and 1646 15.1Trends in top income shares and income inequality in select countries, 1980–2010 ACKNOWLEDGMENTS The gap between the haves and the have-nots has alternately grown and shrunk throughout the course of human civilization. Economic inequality may only recently have returned to great prominence in popular discourse, but its history runs deep. My book seeks to track and explain this history in the very long run. One of the first to draw my attention to this very long run was Branko Milanovic, a world expert on inequality who in his own research has reached all the way back to antiquity. If there were more economists like him, more historians would be listening. About a decade ago, Steve Friesen made me think harder about ancient income distributions, and Emmanuel Saez further piqued my interest in inequality during a shared year at Stanford’s Center for Advanced Study in the Behavioral Sciences.

Our meeting in Vienna in September 2015 was both enjoyable and educational: my thanks go to my local co-organizers, Bernhard Palme and Peer Vries, as well as to Ken Scheve and August Reinisch for their financial support. I further benefited from feedback at presentations at the Evergreen State College, the Universities of Copenhagen and Lund, and the Chinese Academy of Social Sciences in Beijing. I am grateful to the organizers of these events: Ulrike Krotscheck, Peter Bang, Carl Hampus Lyttkens, Liu Jinyu, and Hu Yujuan. David Christian, Joy Connolly, Peter Garnsey, Robert Gordon, Philip Hoffman, Branko Milanovic, Joel Mokyr, Reviel Netz, Şevket Pamuk, David Stasavage, and Peter Turchin very kindly read and commented on the whole manuscript. Kyle Harper, William Harris, Geoffrey Kron, Peter Lindert, Josh Ober, and Thomas Piketty also read parts of the book. A group of historians at the Saxo Institute in Copenhagen met to discuss my manuscript, and I am particularly grateful to Gunner Lind and Jan Pedersen for their extensive input.


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Planet of Slums by Mike Davis

barriers to entry, Branko Milanovic, Bretton Woods, British Empire, Brownian motion, centre right, clean water, conceptual framework, crony capitalism, declining real wages, deindustrialization, Deng Xiaoping, edge city, European colonialism, failed state, Gini coefficient, Hernando de Soto, housing crisis, illegal immigration, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, jitney, jobless men, Kibera, labor-force participation, land reform, land tenure, liberation theology, low-wage service sector, mandelbrot fractal, market bubble, megacity, microcredit, Nelson Mandela, New Urbanism, Pearl River Delta, Ponzi scheme, RAND corporation, rent control, structural adjustment programs, surplus humans, upwardly mobile, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor

was coordinated for UN-HABITAT by the Development Planning Unit at University College London.3 Secondly, it utilizes a unique comparative database for 237 cities worldwide created by the UNHABITAT Urban Indicators Programme for the 2001 Istanbul + 5 Urban Summit.4 And thirdly, it incorporates global household surveydata that breaks new ground by including China and the ex-Soviet bloc. The UN authors acknowledge a particular debt to Branko Milanovic, the World Bank economist who pioneered these surveys as a powerful microscope for studying global inequality. (In one of his papers, Milanovic explains: "For the first time in human history, researchers have reasonably accurate data on the distribution of income or welfare [expenditures or consumption] amongst more than 90 percent of the world population."5) If the reports of the Intergovernmental Panel on Climate Change represent an unprecedented scientific consensus on the dangers of global warming, then The Challenge of Slums sounds an equally authoritative warning about the worldwide catastrophe of urban poverty.

Connoisseurs and flaneurs debated where human degradation was most awful: Whitechapel or 3 University College London Development Planning Unit and UN-HABITAT, Understanding Slums: Case Studiesfor the Global Report on Human Settlements 2003, available at www.ucl.ac.uk/dpu-projects/Global_Report. Most of these studies are summarized in an appendix at the back of The Challenge of Slums. Missing, however, is the brilliant survey of Khartoum by Galal Eldin Eltayeb, deleted, one supposes, because of his characterization of the "Islamist, totalitarian regime." 4 See Challenge, p. 245. 5 Branko Milanovic, "True World Income Distribution, 1988 and 1993: First Calculation Based On Household Survey Alone," working paper, World Bank, New York 1999, n.p. 6 Prunty, Dublin Slums, p. 2. 7 J. A. Yelling, Slums and Slum Clearance in Victorian London, London 1986, p. 5. La Chapelle, the Gorbals or the Liberties, Pig Alley or Mulberry Bend. In an 1895 survey of the "poor in the great cities," Scribner's Magazine voted Naples's fondaci as "the most ghastly human dwellings on the face of the earth," but Gorky was certain that Moscow's notorious Khitrov district was actually the "lower depths," while Kipling laughed and took his readers "deeper and deeper still" to Colootollah, the "lowest sink of all" in Calcutta's "city of dreadful night."8 These classic slums were notoriously parochial and picturesquely local places, but reformers generally agreed with Charles Booth — the Dr.

and Yerevan (Armenia).15 Likewise, the concrete-and-steel Soviet-era urban core of Ulaanbaatar is now surrounded by a sea of 500,000 or more impoverished, former pastoralists living in tents called gers, few of whom manage to eat more than once a day.16 The poorest urban populations, however, are probably found in Luanda, Maputo, Kinshasa, and Cochabamba (Bolivia), where twothirds or more of residents earn less than the cost of their minimum required daily nutrition.17 In Luanda, where one quarter of the households have per capita consumptions of less than 75 cents per day, child mortality (under five) was a horrifying 320 per thousand in 1993 — the highest in the world.18 Not all urban poor, to be sure, live in slums, nor are all slumdwellers poor; indeed, The Challenge of Slums underlines that in some cities the majority of the poor actually live outside the slums stricto sensuP Although the two categories obviously overlap in their majority, the number of urban poor is considerably greater: at least one half of the world's urban population as defined by relative national poverty thresholds.20 Approximately one quarter of urbanites (as surveyed in 1988), moreover, live in barely imaginable "absolute" poverty — somehow surviving on one dollar or less per day.21 If UN data are accurate, the household per-capita income differential between a rich 15 Christiaan Grootaert and Jeanine Braithwaite, "The Determinants of Poverty in Eastern Europe and the Former Soviet Union," in Jeanine Braithwaite, Christiaan Grootaert, and Branko Milanovic (eds), Poverty and Social Assistance in Transition Countries, New York 2000, p. 49; UNCHS Global Indicators Database 1993. 16 Office of the Mayor, Ulaanbaatar City, "Urban Poverty Profile," submitted to World Bank, n.d., infocity.org/F2F/poverty/papers2/UB(Mongolia)%20Poverty. pdf. 17 Simon, 'Urbanization, Globalization, and Economic Crisis in Africa," p. 103; Jean-Luc Piermay, "Kinshasa: A Reprieved Mega-City?


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Doing Good Better: How Effective Altruism Can Help You Make a Difference by William MacAskill

barriers to entry, basic income, Black Swan, Branko Milanovic, Cal Newport, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Brooks, effective altruism, en.wikipedia.org, end world poverty, experimental subject, follow your passion, food miles, immigration reform, income inequality, index fund, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, job automation, job satisfaction, Lean Startup, M-Pesa, mass immigration, meta analysis, meta-analysis, microcredit, Nate Silver, Peter Singer: altruism, purchasing power parity, quantitative trading / quantitative finance, randomized controlled trial, self-driving car, Skype, Stanislav Petrov, Steve Jobs, Steve Wozniak, Steven Pinker, The Future of Employment, The Wealth of Nations by Adam Smith, universal basic income, women in the workforce

The French economist Thomas Piketty, who gained international fame for his 2014 book Capital in the Twenty-First Century, has suggested that the level of income inequality in the United States is “probably higher than in any other society at any time in the past, anywhere in the world.” This can lead those of us who aren’t in that 1 percent to feel powerless, but this focus neglects just how much power almost any member of an affluent country has. If people focus exclusively on American inequality, they’re missing an important part of the bigger picture. Consider this graph of global income distribution: Source: Branko Milanovic, PovcalNet This graph lines up everyone in the world, ordered by their income. The space between 0 and 25 percent represents the 25 percent of the world with the smallest incomes; the space between 75 and 100 percent represents the 25 percent of the world with the largest incomes. If everyone had the same income, the line would be flat, forming a neat rectangle under it. But they don’t.

When I ask residents of the United States or the United Kingdom this question, they typically guess they fall into the seventieth or eightieth percentile. They know they’re from an affluent country, but they also know they’re not like those bankers and CEOs who make up the global elite. They therefore guess that they’re at the corner of the curve, peering up at the megarich who sit atop that spike. That’s what I used to think, too. Here’s that graph with the vertical axis labeled. Source: Branko Milanovic, PovcalNet If you earn more than $52,000 per year, then, speaking globally, you are the 1 percent. If you earn at least $28,000—that’s the typical income for working individuals in the United States—you’re in the richest 5 percent of the world’s population. Even someone living below the US poverty line, earning just $11,000 per year, is still richer than 85 percent of people in the world.

“probably higher than in any other society”: Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), 265. Consider this graph of global income distribution: The data on world income distribution is drawn from several sources. The figures for between the richest 1 percent and the richest 21 percent are based on microdata from national household surveys carried out in 2008, kindly provided by Branko Milanovic. The figures for the poorest 73 percent are based on the 2008 data from PovcalNet (http://iresearch.worldbank.org/PovcalNet/index.htm?1), adjusted based on the approximation that the surveys covered unbiased samples of the poorest 80 percent of the world’s population. The figure of $70,000 for the top 0.1 percent is from Milanovic’s book The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality (New York: Basic Books, 2011).


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Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, Plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, Scientific racism, Simon Kuznets, single-payer health, strikebreaker, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

While the government had bailed out banks before, it was new and expensive for the government to rescue bank holding companies that had many assets not insured by the FDIC.12 Figure 8.1 Percentage Share of Income by Quintile, 1982–2006. (Computed from Edward Nathan Wolff, “Recent Trends in Household Wealth, 1983–2006: The Irresistible Rise of Household Debt,” Review of Economics and Institutions vol. 2 no. 1 (Winter 2001): 1–31, at 7.) Economist Branko Milanovic argues that the economic crash of 2006 was ultimately precipitated by inequality. Before the crash, the wealthiest Americans needed places to invest vast sums, and this demand called into being a supply of risky financial instruments. Middle- and low-income Americans had stagnant real wages but could maintain or improve their quality of life with easy access to credit, including subprime mortgages.

Leslie McCall, The Undeserving Rich: American Beliefs about Inequality, Opportunity and Redistribution (Cambridge, MA: Cambridge University Press, 2013), 48. 14. Huston, Securing the Fruits of Labor, xi–xxiv, 383. 15. Jason Long and Joseph Ferrie, “Intergenerational Occupational Mobility in Great Britain and the United States since 1850,” American Economic Review vol. 103 no. 4 (2013): 1109–1137. 16. Branko Milanovic, The Haves and Have-Nots: A Brief and Idiosyncratic History of Global Inequality (New York: Basic Books, 2010), 30. 17. Carole Shammas, “A New Look at Long-Term Trends in Wealth Inequality in the United States,” American Historical Review vol. 98 no. 2 (April 1993): 412–431. To be fair, Williamson and Lindert did acknowledge that if slaves were added to the group of wealth-holders while being kept as part of the property of their owners, measurable inequality would have been even worse in the antebellum period than economic historians’ studies suggest.

Barth and Apanard Penny Prabha, “An Analysis of Resolving Too-Big-to-Fail Banks throughout the United States,” The Journal of Regional Analysis and Policy vol. 44 no. 1 (2014): 1–19. 13. Fabian T. Pfeffer, Sheldon Danziger, and Robert F. Schoeni, “Wealth Disparities Before and After the Great Recession,” Annals of the American Academy of Political and Society Science no. 650 (2013): 98–123. 14. Branko Milanovic, Haves and Have-Nots: A Brief and Idiosyncratic History of Global Inequality (New York: Basic Books, 2010). 196; Michael Tavel Clarke, “After the Welfare State: The New Marxism and Other Rough Beasts,” American Quarterly vol. 61 no. 1 (2009): 173–184, at 182; Michael Kumhof, Romain Ranciere, and Pablo Winant, “Inequality, Leverage and Crises,” American Economic Review vol. 105 no. 3 (2015): 1217–1245; Barry Z.


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Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, en.wikipedia.org, endowment effect, experimental subject, framing effect, full employment, hindsight bias, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, invisible hand, labor-force participation, lake wobegon effect, loss aversion, minimum wage unemployment, Network effects, Paul Samuelson, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, selection bias, side project, sovereign wealth fund, Steve Jobs, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy

Though he’d never been taught to read and write, there was almost no practical task in that environment that he couldn’t perform to a high standard. Even so, the meager salary I was able to pay him was almost certainly the high point of his life’s earnings trajectory. If he’d grown up in the United States or some other rich country, he would have been far more prosperous, perhaps even spectacularly successful. As the economist Branko Milanovic has estimated, roughly half of the variance in incomes across persons worldwide is explained by only two factors: country of residence and the income distribution within that country.4 As Napoleon Bonaparte once observed, “Ability is of little account without opportunity.” But if talent and hard work don’t guarantee material success, I hope we can all agree that success is much more likely for people with talents that are highly valued by others, and also for those with the ability and inclination to focus intently and work tirelessly.

Frank, “Before Tea, Thank Your Lucky Stars,” New York Times, April 26, 2009, http://www.nytimes.com/2009/04/26/business/economy/26view.html?_r=0. 2. Fox Business News, “Luck Is the Real Key to Success?,” May 7, 2011, http://video.foxbusiness.com/v/3887675/luck-is-the-real-key-to-success/#sp=show-clips. 3. Terry Gross, “Fresh Air Remembers the Crime Novelist Elmore Leonard,” National Public Radio, August 23, 2013, http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=214831379&m=214836712. 4. Branko Milanovic, “Global Inequality of Opportunity: How Much of Our Income Is Determined by Where We Live?,” Review of Economics and Statistics 97.2 (May 2015): 452–60. 5. See, for example, Gary Marcus, “Mice, Men, and Fate,” New Yorker, May 13, 2013, http://www.newyorker.com/online/blogs/elements/2013/05/of-mice-and-men.html. 6. Alan Krueger, “The Rise and Consequences of Income Inequality in the United States,” remarks prepared for delivery at the Center for American Progress, January 12, 2012, https://milescorak.files.wordpress.com/2012/01/34af5d01.pdf. 7.


pages: 535 words: 158,863

Superclass: The Global Power Elite and the World They Are Making by David Rothkopf

airport security, anti-communist, asset allocation, Ayatollah Khomeini, bank run, barriers to entry, Berlin Wall, Bob Geldof, Branko Milanovic, Bretton Woods, BRICs, business cycle, carried interest, clean water, corporate governance, creative destruction, crony capitalism, David Brooks, Doha Development Round, Donald Trump, financial innovation, fixed income, Francis Fukuyama: the end of history, Gini coefficient, global village, high net worth, income inequality, industrial cluster, informal economy, Internet Archive, Jeff Bezos, jimmy wales, joint-stock company, knowledge economy, liberal capitalism, Live Aid, Long Term Capital Management, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, mass immigration, means of production, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, Nelson Mandela, old-boy network, open borders, plutocrats, Plutocrats, Ponzi scheme, price mechanism, shareholder value, Skype, special economic zone, Steve Jobs, Thorstein Veblen, too big to fail, trade liberalization, trickle-down economics, upwardly mobile, Vilfredo Pareto, Washington Consensus, William Langewiesche

Pritchett, “Divergence, Big Time,” Journal of Economic Perspectives 11, no. 3 (Summer 1997): 3-17. 66 the ratio between the GDP of today’s richest country Achin Vanaik, “Unequal Gains,” Telegraph, December 22, 2005. 66 The world’s billionaires, those roughly one thousand individuals “The World Distribution of Household Wealth,” United Nations University—World Institute for Development Economics Research, December 5, 2006. 66 In some places, the concentration of poverty United Nations, “UN Human Development Report 2005.” 66 in the period between 1984 and 2004 Bob Davis et al., “Globalization’s Gains Come with a Price,” Wall Street Journal, June 3, 2007. 66 The World Bank’s Branko Milanovic Branko Milanovic, Worlds Apart (Princeton: Princeton University Press, 2005), 39. 67 with the Gini for all adults in the world nearly sixty-five Ibid., 108. 67 Professor James Galbraith James K. Galbraith, “By the Numbers,” Foreign Affairs, July/August 2002, 178-83. 68 In the last two decades, income inequality Birdsall, “The World Is Not Flat.” 68 Emmanuel Saez of the University of California Thomas Piketty and Emmanuel Saez, “The Evolution of Top Incomes: A Historical and International Perspective,” National Bureau of Economic Research, Spring 2006, 204.

Even in China, which has shown such remarkable growth over the past two decades, inequality is increasing; in the period between 1984 and 2004, China’s Gini coefficient almost doubled, from 29 to 47. Disputes arise over the interpretation of these figures. One often-cited distinction is the difference between measuring inequality among the peoples of a country and inequality among all peoples. The World Bank’s Branko Milanovic has argued that measuring intracountry income gaps is a useful metric when testing the effectiveness of policies. By this measure, inequality has been on the rise for almost seven decades, with a period of “steady and sharp” increase between 1982 and 1994. Some of the lower-income countries, like those in sub-Saharan Africa, have struggled with negative per capita GDP growth for a quarter century, while the developed, free-trading countries of the Organisation for Economic Cooperation and Development have seen their fortunes rise over the same period.

Some of those deserving of special thanks in this regard and who I am able to thank here include: Prince Turki al Faisal, Charlene Barshefsky, Senator Evan Bayh, Sandy Berger, Nancy Birdsall, Admiral Dennis Blair, Philippe Bourguignon, Lael Brainard, Hilda Ochoa Brillembourg, Leon Brittan, Steve Chase, Kurt Campbell, Vint Cerf, Heng Chee Chan, Juan Claro, Riccardo Claro, David Cole, Ibrahim Dabdoub, Richard Darman, Anita Dunn, Alejandro Foxley, Arminio Fraga, Thomas Friedman, Al From, Timothy Geithner, Jorge Gerdau Johanpeter, Louis Gerstner, Hank Greenberg, Francisco Gros, Rajat Gupta, Richard Haass, Peter Hakim, Victor Halberstadt, William Haseltine, Richard Holbrooke, Robert Hormats, General James Jones, General George Joulwan, John Judis, General John Jumper, Susan Kaufman Purcell, Robert Kimmitt, Jim Kimsey, Henry Kissinger, Anthony Lake, Jennifer Linker, Haakon Lorentzen, Edward Ludwig, Andronico Luksic, Kishore Mahbubani, Thierry Malleret, Mark Malloch Brown, Jorge Marshall, Jessica Mathews, William McDonough, Thomas F. McLarty, Branko Milanovic, Bryan Moss, Moisés Naím, Indra Nooyi, Jeff Pack, Juan Carlos Pérez Dávila, Luis Felipe Pérez Dávila, Peter Peterson, Thomas Pickering, Karen Poniachik, General Colin Powell, Geeta Rao Gupta, Philippe Reichstuhl, Susan Rice, Stephen Roach, Jorge Rosenblut, Dennis Ross, Robert Rubin, Alvaro Saieh, David Sanger, Alejandro Santo Domingo, Klaus Schwab, Bernard Schwartz, Stephen Schwarzman, General Brent Scowcroft, Walter Slocombe, Gayle Smith, Admiral Stephen Smith, Stephen Solarz, Alfred Sommer, Rob Stein, Joseph Stiglitz, Lawrence Summers, Pamela Thomas Graham, Andres Velasco, James Wolfensohn, Bob Wright, Daniel Yergin, and James Woolsey.


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The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton

"Robert Solow", Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, clean water, colonial exploitation, Columbian Exchange, creative destruction, declining real wages, Downton Abbey, end world poverty, financial innovation, germ theory of disease, Gini coefficient, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, very high income, War on Poverty

Schneider, 2012, “The colonial origins of the divergence in the Americas: A labor market approach,” Journal of Economic History 72(4): 863–94. 15. Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez, 2011, “Top incomes in the long run of history,” Journal of Economic Literature 49(1): 3–71. 16. Ibid. 17. Maarten Goos, Alan Manning, and Anna Salomons, 2009, “Job polarization in Europe,” American Economic Review 99(2): 58–63. 18. Branko Milanovic, 2007, Worlds apart: Measuring international and global inequality, Princeton University Press. An important update is Branko Milanovic, 2010, “Global income inequality,” http://site​resources​.world​bank​.org​/INT​POVRES​/Resources​/477227​-1173​1085​74667​/global​_in​equality​_pre​sen​ta​tion​_milanovic​_imf​_2010.pdf. 19. Ronald Dworkin, 2000, Sovereign virtue, Harvard University Press, p. 6. Quoted in Thomas Nagel, 2005, “The problem of global justice,” Philosophy and Public Affairs 33(2): 113–47, p. 120.

My friends, colleagues, and students have been extraordinarily generous in reading drafts of all or parts of this book. It is immeasurably better for their thoughtful and insightful reactions. I am especially grateful to those who disagree with me, yet who took the time not only to criticize and persuade but also to praise and agree when they could. I am grateful to Tony Atkinson, Adam Deaton, Jean Drèze, Bill Easterly, Jeff Hammer, John Hammock, David Johnston, Scott Kostyshak, Ilyana Kuziemko, David Lam, Branko Milanovic, Franco Peracchi, Thomas Pogge, Leandro Prados de las Escosura, Sam Preston, Max Roser, Sam Schulhofer-Wohl, Alessandro Tarozzi, Nicolas van de Walle, and Leif Wenar. My editor at Princeton University Press, Seth Ditchik, helped me to get started and provided help and good advice all along the way. Princeton University has provided me with an unequaled academic environment for more than three decades.


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Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan

Admiral Zheng, agricultural Revolution, barriers to entry, Berlin Wall, Branko Milanovic, British Empire, conceptual framework, creative destruction, demographic transition, Deng Xiaoping, endogenous growth, failed state, Fall of the Berlin Wall, Gini coefficient, global pandemic, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, Lao Tzu, life extension, longitudinal study, low skilled workers, low-wage service sector, Malacca Straits, mass immigration, microcredit, Nelson Mandela, Network effects, new economy, New Urbanism, old age dependency ratio, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, selection bias, Silicon Valley, Silicon Valley startup, Skype, spice trade, trade route, transaction costs, transatlantic slave trade, women in the workforce, working-age population

Although incomes in all countries have risen over the long term, economists have found that “virtually all of the observed rise in world inequality has been driven by widening gaps between nations.”23 Figure 7.2. Gini coefficient: unweighted intercountry inequality 1950-1998. Each country is one observation. Branko Milanovic. 2003. “The Two Faces of Globalization: Against Globalization as We Know It,” World Development 31(4): 667-683, p. 675, figure 3. © Elsevier Branko Milanovic, a World Bank economist, illustrates this phenomenon by applying the Gini coefficient measure of inequality to the GDP per capita for 144 countries between 1950 and 1998 (see figure 7.2). Each country is treated as one unit, so China is given equal weighting to Fiji. This approach illustrates how economic conditions and opportunities differ dramatically from one country to another.

“Migration Transnationalism and Modes of Transformation,” International Migration Review 38(3): 970–1001, p. 992. 16. Vertovec, 2004: 992–993. 17. Pritchett, 2006: 32. See also World Bank. 2005. Global Economic Prospects: Economic Implications of Remittances and Migration. Washington, DC: World Bank. 18. Ibid.: 24. 19. Ibid.: 23. 20. Ibid.: 24. 21. Lant Pritchett. 1997. “Divergence, Big Time,” Journal of Economic Perspectives 11(3): 3–17. 22. Branko Milanovic. 2003. “The Two Faces of Globalization: Against Globalization as We Know It,” World Development 31(4): 667–683, p. 670. 23. Peter H. Lindert and Jeffrey G. Williamson. 2003. “Does Globalization Make the World More Unequal?” in Michael D. Bordo, Alan M. Taylor, and Jeffrey G. Williamson (eds.), Globalization in Historical Perspective. Chicago: University of Chicago Press, pp. 227–271, p. 227. 24.


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Head, Hand, Heart: Why Intelligence Is Over-Rewarded, Manual Workers Matter, and Caregivers Deserve More Respect by David Goodhart

active measures, Airbnb, Albert Einstein, assortative mating, basic income, Berlin Wall, Bernie Sanders, big-box store, Boris Johnson, Branko Milanovic, British Empire, call centre, Cass Sunstein, central bank independence, centre right, computer age, corporate social responsibility, COVID-19, Covid-19, David Attenborough, David Brooks, deglobalization, deindustrialization, delayed gratification, desegregation, deskilling, different worldview, Donald Trump, Elon Musk, Etonian, Fall of the Berlin Wall, Flynn Effect, Frederick Winslow Taylor, future of work, gender pay gap, gig economy, glass ceiling, illegal immigration, income inequality, James Hargreaves, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labour market flexibility, longitudinal study, low skilled workers, Mark Zuckerberg, mass immigration, new economy, Nicholas Carr, oil shock, pattern recognition, Peter Thiel, pink-collar, post-industrial society, post-materialism, postindustrial economy, precariat, reshoring, Richard Florida, Scientific racism, Skype, social intelligence, spinning jenny, Steven Pinker, superintelligent machines, The Bell Curve by Richard Herrnstein and Charles Murray, The Rise and Fall of American Growth, Thorstein Veblen, twin studies, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, wages for housework, winner-take-all economy, women in the workforce, young professional

Getting intimately involved in any physical process that requires skill, concentration, and a deep understanding of a particular material is a way of blurring subject and object, enlarging your sense of self by becoming what you are working with. Winston Churchill meditated by bricklaying. The ancient crafts of Japanese culture are performed as a meditation. The story of the relative decline in incomes for middling and lower skilled jobs, thanks to more global openness and technological change, is a familiar one. The macro picture is captured by Branko Milanovic’s famous elephant chart in which he shows the distribution of global income growth from 1988 to 2008.6 He finds the world’s poorest people, the new middle classes in poor countries, and the rich in rich countries all benefiting handsomely, while those occupying the 75th to 90th percentiles of world income distribution—essentially the West’s working and lower-middle classes—have seen their incomes stagnate.

., “A New Model of Social Class? Findings from the BBC’s Great British Class Survey Experiment,” Sociology 47, no. 2 (2013), 219–50. 4 Michael Hout, “Social and Economic Returns to College Education in the United States,” Annual Review of Sociology 38 (2012), 379–400, https://www.annualreviews.org/doi/pdf/10.1146/annurev.soc.012809.102503. 5 Michael Hout, private correspondence. 6 Christoph Lakner and Branko Milanovic, “Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession,” World Bank Economic Review 30, no. 2 (2016), 203–232. 7 David Bailey, Caroline Chapain, and Alex de Ruyter, “Employment Outcomes and Plant Closures in a Post-Industrial City: An Analysis of the Labour Market Status of MG Rover Workers Three Years On,” Urban Studies 49, no. 7 (2011), 1595–1612. 8 Tara Tiger Brown, “The Death of Shop Class and America’s Skilled Workforce,” Forbes, May 30, 2012, https://www.forbes.com/sites/tarabrown/2012/05/30/the-death-of-shop-class-and-americas-high-skilled-workforce/#7ba6e3a0541f. 9 Conversation with the author. 10 See, for example, Office for National Statistics, Construction Statistics, Great Britain: 2017. 11 “Self-Employment Jobs by Industry,” Office for National Statistics. 12 https://www.gov.uk/government/statistical-data-sets/fe-data-library-apprenticeships. 13 https://www.citb.co.uk/documents/research/tns-2016-2017_final%2020-10-17.pdf. 14 “Migrant Labour Force Within the Construction Industry,” Office for National Statistics, June 2018. 15 “Employer Skills Survey 2017: UK Finding,” Department for Education, https://www.gov.uk/government/publications/employer-skills-survey-2017-uk-report. 16 Ibid. 17 Ibid. 18 Educating for the Modern World, CBI/Pearson, 2018, 16–17. 19 Alexia Fernández Campbell, “The US Is Experiencing a Widespread Worker Shortage.

., Loneliness in Older Adults in the USA and Germany: Measurement Invariance and Validation, NORC Working Paper Series WP-2015-004, 2016. 24 Kantar Public, “Trapped in a Bubble: An Investigation into Triggers for Loneliness in the UK,” British Red Cross/Co-op, December 2016. 25 The Forgotten Role of Families, Centre for Social Justice, 2017. 26 David Brooks, “The Nuclear Family Was a Mistake,” Atlantic, March 2020. 27 Harry Benson, The Myth of “Long-term Stable Relationships” Outside Marriage, Marriage Foundation, May 2013, https://marriagefoundation.org.uk/wp-content/uploads/2019/09/MF-paper-Myth-of-long-term-stable-relationships-outside-marriage.pdf. 28 Branko Milanovic, Capitalism, Alone (Cambridge, MA: Harvard University Press, 2019). 29 Madeleine Bunting, Labours of Love: The Crisis of Care (London: Granta, 2020 [forthcoming]). 30 Interview with the author. 31 Tom De Castell, “Rise in Nurse Vacancy Rate in England Prompts Fresh Warnings,” Nursing Times, September 12, 2018; Stephanie Jones-Berry, “Why as Many as One in Four Nursing Students Could Be Dropping Out of Their Degrees,” Nursing Standard, September 3, 2018; “What Are the Vacancy Trends in the Public Sector?”


pages: 317 words: 71,776

Inequality and the 1% by Danny Dorling

Affordable Care Act / Obamacare, banking crisis, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Boris Johnson, Branko Milanovic, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, centre right, collective bargaining, conceptual framework, corporate governance, credit crunch, David Attenborough, David Graeber, delayed gratification, Dominic Cummings, double helix, Downton Abbey, en.wikipedia.org, Etonian, family office, financial deregulation, full employment, Gini coefficient, high net worth, housing crisis, income inequality, land value tax, longitudinal study, low skilled workers, lump of labour, mega-rich, Monkeys Reject Unequal Pay, Mont Pelerin Society, mortgage debt, negative equity, Neil Kinnock, Occupy movement, offshore financial centre, plutocrats, Plutocrats, precariat, quantitative easing, race to the bottom, Robert Shiller, Robert Shiller, TaskRabbit, The Spirit Level, The Wealth of Nations by Adam Smith, trickle-down economics, unpaid internship, very high income, We are the 99%, wealth creators, working poor

This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile the excluded are still waiting. Pope Francis, 201314 Oxfam, the leading UK-based poverty charity, has published detailed research on how Britain is brewing up a ‘perfect storm’ of social harm and unrest through growing income inequality.15 Buried deep in their report, the Oxfam researchers summarise how, according to the leading World Bank economist Branko Milanovic, ‘the real cause of the crisis lies in huge inequalities in income distribution that generated much larger investable funds than could be profitably employed’.16 By the end of 2013 even the pope was echoing the World Bank and leading poverty researchers. Oxfam explains how the International Monetary Fund has now also reached the same conclusion as the World Bank,17 suggesting that ‘any success in reducing income inequality could therefore be very useful in reducing the likelihood of future crises’.18 Oxfam deplores the fact that so far the opposite is currently happening – that, between 2007 to 2011, the ratio of FTSE 100 chief executives’ earnings to average wages rose from 92:1 to 102:1,19 and Oxfam appeared disgusted that this occurred even as real wages fell, all storing up further trouble for the future.20 They explained that a concern with ratios is not the politics of envy, but simply indicates a desire for justice.

In the US it is currently at a peak, but in Sweden it appears to have been falling again just as it has fallen worldwide (see Figure 6.5).45 Such claims for falling worldwide inequality are, of course, disputed; and measures of inequality that are more sensitive to the 1 per cent taking an ever greater share may not be as forgiving of extreme greed as the Gini coefficient; but inequalities within the middle of the distribution can nonetheless fall. Source: Branko Milanovic, 2012 Figure 6.5 Global and selected countries’ income inequality Gini coefficients 1966–2006 Shortly after the release of the 2012 World Bank report suggesting that global income inequality was falling, another organisation published its major findings, stating: ‘Poverty has not declined to the extent claimed and inequity has risen.’46 It may be that, between the mildly rich and the relatively poor, some equalisation is occurring.


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Belt and Road: A Chinese World Order by Bruno Maçães

active measures, Admiral Zheng, autonomous vehicles, Branko Milanovic, BRICs, cloud computing, deindustrialization, demographic dividend, Deng Xiaoping, different worldview, Donald Trump, energy security, European colonialism, eurozone crisis, Francis Fukuyama: the end of history, global supply chain, global value chain, industrial cluster, industrial robot, Internet of things, Kenneth Rogoff, land reform, liberal world order, Malacca Straits, one-China policy, Pearl River Delta, smart cities, South China Sea, sovereign wealth fund, special economic zone, trade liberalization, trade route, zero-sum game

Chinese resistance helped to ensure that the goals adopted in September 2015 featured much vaguer language and entirely missed media independence or the freedoms of speech and association. The Belt and Road represents a major change in developmental philosophy, an alternative development model, a complete break with the ideas now dominant in western-led institutions such as the International Monetary Fund and the World Bank, where development is no longer seen as bricks-and-mortar building of factories and bridges, but as institution-building and policy change. As Branko Milanovic puts it, the Belt and Road proposes an activist view of development: “you need roads for farmers to bring their goods, you need fast railroads, bridges to cross the rivers, tunnels to link communities living at different ends of a mountain.” And it will not deal in any of the moralizing prescriptions about institutions, rule of law, transparency, local empowerment and so on that now dominate Western views on development.

Richard Fontaine and Daniel Kliman, “On China’s New Silk Road, Democracy Pays A Toll,” Foreign Policy, May 16, 2018. 21. 人民日报:推动构建人类命运共同体, 2017年11月19日05:04. 22. “How the Belt and Road Project Fills a Global Governance Vacuum,” Sixth Tone, November 12, 2017. 23. Angela Stanzel, “Fear and loathing on the New Silk Road: Chinese security in Afghanistan and beyond,” July 2018, ECFR/264. 24. Branko Milanovic, “The west is mired in ‘soft’ development. China is trying the ‘hard’ stuff,” The Guardian, May 17, 2017. 25. 国务院办公厅转发 商务部等部门关于扩大进口 促进对外贸易平衡发展意见的通知 国办, 2018, 53 号. 26. Michael Schuman, “China’s Global Ambitions Could Split the World Economy,” Bloomberg, October 26, 2017. 27. Thomas Wright, All Measures Short of War: The Contest for the 21st Century and the Future of American Power (Yale University Press, 2017), p. 1. 28.


pages: 309 words: 91,581

The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

assortative mating, autonomous vehicles, blue-collar work, Bonfire of the Vanities, Branko Milanovic, business cycle, call centre, collective bargaining, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, easy for humans, difficult for computers, Erik Brynjolfsson, Everybody Ought to Be Rich, feminist movement, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, Gunnar Myrdal, income inequality, industrial robot, invisible hand, job automation, Joseph Schumpeter, longitudinal study, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, purchasing power parity, refrigerator car, rent control, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

And identifying precisely which government policies guided the change is something that economists and political scientists are still arguing about. (More on that in chapter 8.) Perhaps we would know more about the Great Divergence, one third of a century after its advent, if the general topic of income distribution inspired less squeamishness. “I was once told by the head of a prestigious think tank in Washington, D.C.,” wrote Branko Milanovic, lead economist at the World Bank’s research division, in his 2011 book The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality, that the think tank’s board was very unlikely to fund any work that had income or wealth inequality in its title. Yes, they would finance anything to do with poverty alleviation, but inequality was an altogether different matter. Why?

Gebhart, the National Economy League, March 24, 1939; and letter to George E. Roberts, Apr. 18, 1940. See also “Biographical Note” in the NWDA online guide to the King Papers (http://nwdadb.wsulibs.wsu.edu/findaid/ark:/80444/xv64995#bioghistID). King called the minimum wage “dangerous” in the Literary Digest profile listed in General Sources. 15. In The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality (New York: Basic Books, 2011), Branko Milanovic points out (pp. 7–8) that Alexis de Tocqueville made a strikingly similar observation in his 1835 Memoir on Pauperism. Equality, Tocqueville wrote, “is prevalent only at the historical poles of civilization. Savages are equal because they are equally weak and ignorant. Very civilized men can all become equal because they all have at their disposal similar means of attaining comfort and happiness.


pages: 606 words: 87,358

The Great Convergence: Information Technology and the New Globalization by Richard Baldwin

"Robert Solow", 3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, Commodity Super-Cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, Kickstarter, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

When it comes to the impact that shows up in the developed nation, the vector of transmission is heightened import competition as before. That is, the GVC-fueled rise in the output of low-skill-intensive goods tends to lead to more imports by the developed nations. This plainly harms low-skill workers in the rich nation. Again, this is something that has happened in most advanced nations. There is, however, a more nuanced result from this sort of shift. Brilliant research by Branko Milanovic in his 2016 book Global Inequality: A New Approach for the Age of Globalization shows what this “new winners and losers” means from a planetary perspective. His numbers look at all humans, one by one, and ignore their nationality. He lines them line up, so to speak, from the poorest to the richest. To keep things manageable, the individuals are lumped together into twenty groups. These groups, which ignore nationality, gather people by income class.

People’s ranking in the global income distribution is shown on the horizontal axis. For example, those who were halfway up the income distribution in 1998 would be included in the point labeled “50” (short for the fiftieth percentile). People represented by this point did pretty well. The height of the point, about 70, shows that their incomes rose by about 70 percent between 1988 and 2008. SOURCE: Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization (Cambridge: Harvard University Press, 2016). Figure 1.1. Reproduced with permission of the publisher and the author. More Polarized Workforce Improved information technology changed the way productions tasks are organized into occupations. Specifically, it meant a regrouping of many low-skill tasks into occupations that tended to require higher skills.


pages: 382 words: 100,127

The Road to Somewhere: The Populist Revolt and the Future of Politics by David Goodhart

Affordable Care Act / Obamacare, agricultural Revolution, assortative mating, Big bang: deregulation of the City of London, borderless world, Boris Johnson, Branko Milanovic, Bretton Woods, British Empire, call centre, capital controls, carbon footprint, central bank independence, centre right, coherent worldview, corporate governance, credit crunch, deglobalization, deindustrialization, Donald Trump, Downton Abbey, Edward Glaeser, en.wikipedia.org, Etonian, European colonialism, eurozone crisis, falling living standards, first-past-the-post, gender pay gap, gig economy, glass ceiling, global supply chain, global village, illegal immigration, income inequality, informal economy, job satisfaction, knowledge economy, labour market flexibility, low skilled workers, market friction, mass immigration, mittelstand, Neil Kinnock, New Urbanism, non-tariff barriers, North Sea oil, obamacare, old-boy network, open borders, Peter Singer: altruism, post-industrial society, post-materialism, postnationalism / post nation state, race to the bottom, Richard Florida, Ronald Reagan, selection bias, shareholder value, Skype, Sloane Ranger, stem cell, Thomas L Friedman, transaction costs, trickle-down economics, ultimatum game, upwardly mobile, wages for housework, white flight, women in the workforce, working poor, working-age population, World Values Survey

But if so it seems unfair that it is discomforting the European descendants of the ‘poor bloody infantry’ rather than those who sat in the governor’s mansions. The one major group that has lost out from the most recent wave of globalisation are poorer people in rich countries. One of the most influential charts in modern economics looks at global income from 1988 to 2008—the so-called elephant curve (created by Christoph Lakner and Branko Milanovic)—and it shows that all groups have benefitted apart from those on middling and lower incomes in rich countries, who have seen zero income growth. Others, such as the Resolution Foundation, argue that the income stagnation for those groups was a result of domestic policy more than globalisation.10 It was, no doubt, some combination of the two but just consider the decline in decently paid manufacturing jobs in Britain in four sectors between 1995 and 2015: clothing fell from 200,000 to 70,000; leather goods from nearly 200,000 to 40,000; machinery from 400,000 to 250,000; and medical equipment from 150,000 to 30,000.11 In the longer run everyone may benefit from such shifts in economic activity, especially as consumers, but in the shorter term the adjustment costs are mainly borne by people in the bottom half of the income spectrum.

In the future, temporary citizens should have more limited social and political rights—corresponding to their own transactional relationship with the country—and should leave after a few years. We can then concentrate rights, benefits and integration efforts (such as language tuition) on those who are making a full commitment to the country. There is a trade-off, as academics like Martin Ruhs and Branko Milanovic have argued, between migration and citizenship. If we want to continue with relatively high inflows we have to ring-fence the welfare state and full citizenship more jealously. Britain became a mass immigration society, much as it became an imperial one, in a fit of absence of mind. The political class must now realise that managing that better is at the heart of what a modern state offers.


pages: 378 words: 110,518

Postcapitalism: A Guide to Our Future by Paul Mason

Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, business process, butterfly effect, call centre, capital controls, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, full employment, future of work, game design, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, late capitalism, low skilled workers, market clearing, means of production, Metcalfe's law, microservices, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, precariat, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, union organizing, universal basic income, urban decay, urban planning, Vilfredo Pareto, wages for housework, WikiLeaks, women in the workforce

But for everybody in between the super-rich and the developing world – that is for the workers and lower-middle classes of the West – there is a U-shaped hole indicating little or no real increase. That hole tells the story of the majority of people in America, Japan and Europe – they gained almost nothing from capitalism in the past twenty years. In fact, some of them lost out. That dip below zero is likely to include black America, poor white Britain and much of the workforce of southern Europe. Branko Milanovic, the economist who prepared these figures for the World Bank, called this ‘probably the profoundest global reshuffle of people’s economic positions since the industrial revolution’.45 11. Doubling the world’s workforce The Harvard economist Richard Freeman calculated that between 1980 and 2000, the world’s workforce doubled in absolute numbers, halving the ratio of capital to labour.46 Population growth and foreign investment boosted the workforce of the developing world, urbanization created a 250-million-strong working class in China, while the former Comecon countries’ workforces were suddenly available to the global market.

A stunning half of all the projected population growth between now and 2050 will take place in just eight countries,* six of which are in sub-Saharan Africa.19 To find jobs, people from the population-boom countries will migrate to the cities; the land, as we’ve seen, is already under stress from climate change. In the cities, many will join the world’s slum-dwelling population, which already stands at a billion – and increasing numbers will attempt illegal migration to the rich world.20 The World Bank economist Branko Milanovic, surveying the huge and growing inequality in developing countries, calls this a ‘non-Marxian world’ in which location, not class, is responsible for two-thirds of all inequality.’21 His conclusion: ‘either poor countries will become richer or poor people will migrate to rich countries’. But for poor countries to become richer, they must break out of the so-called ‘middle-income trap’ – where countries typically develop to a certain point and then stall; both because they have to compete with the old imperial powers and because their corrupt elites strangle the emergence of functional modern institutions.


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Arrival City by Doug Saunders

agricultural Revolution, Ayatollah Khomeini, Berlin Wall, Branko Milanovic, call centre, credit crunch, Deng Xiaoping, desegregation, ghettoisation, Gini coefficient, guest worker program, Hernando de Soto, Honoré de Balzac, illegal immigration, immigration reform, income inequality, informal economy, Jane Jacobs, Kibera, land reform, land tenure, low skilled workers, mass immigration, megacity, microcredit, new economy, Pearl River Delta, pensions crisis, place-making, price mechanism, rent control, Silicon Valley, special economic zone, the built environment, The Chicago School, The Death and Life of Great American Cities, upwardly mobile, urban planning, urban sprawl, white flight, working poor, working-age population

David Rothkopf, a scholar with the Carnegie Endowment for International Peace, described this neglect as a large-scale mistake: “With the notable exceptions of India and China and a few others, which show some heartening middle-class growth, we are doing a very bad job of building the middle classes, which are the foundation of stability and the antidote to the boom-bust cycles that bedevil much of the emerging world.”9 To explain the nature of this challenge, it is important to understand what we mean—and what rural-to-urban migrants mean—by “middle class.” One way to define a middle class is by identifying the middle-income range: you pick out those families that earn between 75 percent and 150 percent of a country’s median income. The economist Branko Milanovic did this for the entire world, dividing all 6.7 billion people into a “lower class”—which turned out to be those whose annual family incomes were below $4,000 annually, the median income of Brazil—and an “upper class,” those families with more than $17,000 a year, the median income of Italy. The lower class made up 78 percent of the world’s population, the upper class 11 percent, and the worldwide middle class, those families living on between $4,000 and $17,000 a year, another 11 percent.10 The middle class can also be identified by their role and self-identification.

For a review of the literature demonstrating the importance of a middle class in maintaining stability and promoting democracy and prosperity, see Steven Pressman, “The Decline of the Middle Class: An International Perspective,” Journal of Economic Issues XLI, no. 1 (2007). 8 Guedes and Oliveira, “Braudel Papers 38.” 9 David Rothkopf, “Pain in the Middle,” Newsweek International, Nov. 21, 2005. 10 Branko Milanovic, “Decomposing World Income Distribution: Does the World Have a Middle Class?” Review of Income and Wealth 48, no. 2 (2002). 11 Rasheeda Bhagat, “A One-Billion Middle-Class Deluge from India, China by 2020,” The Hindu Business Line, Jun. 29, 2006. For a similar analysis using different consumer data, see Diana Farrell, Ulrich A. Gersch, and Elizabeth Stephenson, “The Value of China’s Emerging Middle Class,” The McKinsey Quarterly (2006). 12 Nancy Birdsall, Carol Graham, and Stefano Pettinato, “Stuck in the Tunnel: Is Globalization Muddling the Middle Class?”


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Seventeen Contradictions and the End of Capitalism by David Harvey

accounting loophole / creative accounting, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, drone strike, end world poverty, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, global reserve currency, Guggenheim Bilbao, Gunnar Myrdal, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, new economy, New Urbanism, Occupy movement, peak oil, phenotype, plutocrats, Plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, short selling, Silicon Valley, special economic zone, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

The crisis of 2007–9 onwards made matters worse: ‘The top 100 billionaires added $240 billion to their wealth in 2012 – enough to end world poverty four times over.’2 Billionaires have erupted all over the place, with large numbers now recorded in Russia, India, China, Brazil and Mexico, as well as in the more traditionally wealthy countries in North America, Europe and Japan. One of the more significant shifts is that the ambitious no longer have to migrate to the affluent countries to become billionaires – they can simply stay at home in India (where the number of billionaires has more than doubled over the last few years), Indonesia or wherever. As Branko Milanovic concludes, we are witnessing the rise of a global plutocracy in which global power ‘is held by a relatively small number of very rich people’.3 The threat to the contradictory unity between production and realisation in the global economy is palpable. Yet by other measures the world is a much more equal place than it once was. Millions of people have escaped from poverty. Much of this has been due to the phenomenal growth of China, along with substantial bursts of growth in the other so-called BRIC countries (Brazil, Russia and India).

Henri Lefebvre, The Production of Space, Oxford, Basil Blackwell, 1989. Contradiction 12: Disparities of Income and Wealth 1. Michael Norton and Dan Ariely, ‘Building a Better America – One Wealth Quintile at a Time’, Perspectives on Psychological Science, Vol. 6, 2011, p. 9. 2. Oxfam, ‘The Cost of Inequality: How Wealth and Income Extremes Hurt Us All’, Oxfam Media Briefing, 18 January 2013. 3. Branko Milanovic, Worlds Apart: Measuring International and Global Inequality, Princeton, Princeton University Press, 2005, p. 149. 4. Craig Calhoun, ‘What Threatens Capitalism Now?’, in Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian and Craig Calhoun, Does Capitalism Have a Future?, Oxford, Oxford University Press, 2013. Contradiction 13: Social Reproduction 1. Cited in Samuel Bowles and Herbert Gintis, ‘The Problem with Human Capital Theory: A Marxian Critique’, American Economic Review, Vol. 65, No. 2, 1975, pp. 74–82. 2.


pages: 441 words: 113,244

Seasteading: How Floating Nations Will Restore the Environment, Enrich the Poor, Cure the Sick, and Liberate Humanity From Politicians by Joe Quirk, Patri Friedman

3D printing, access to a mobile phone, addicted to oil, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, barriers to entry, Branko Milanovic, British Empire, Buckminster Fuller, Burning Man, business climate, business cycle, business process, California gold rush, Celtic Tiger, Charles Lindbergh, clean water, Colonization of Mars, Dean Kamen, Deng Xiaoping, drone strike, Elon Musk, en.wikipedia.org, failed state, financial intermediation, Gini coefficient, happiness index / gross national happiness, income inequality, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, joint-stock limited liability company, Kickstarter, low skilled workers, Machinery of Freedom by David Friedman, Mark Zuckerberg, megacity, minimum wage unemployment, Network effects, new economy, obamacare, offshore financial centre, open borders, paypal mafia, peak oil, Peter H. Diamandis: Planetary Resources, Peter Thiel, price stability, profit motive, Ronald Coase, Ronald Reagan, Shenzhen was a fishing village, Silicon Valley, special economic zone, standardized shipping container, stem cell, trade route, UNCLOS, UNCLOS, undersea cable, young professional

They believe the world has no choice but to follow them. DeltaSync wants a billion people on the seas by 2050. Let’s talk about the billion who may be the first to show up. PART III * * * ECONOMY Chapter 6 WEALTH The Miracle of Start-up Societies We Are the 1 Percent (And So Are You) If you can afford to buy this book, you may be in the 1 percent. According to former World Bank lead economist Branko Milanovic, if you’re single and make more than $34,000 US after taxes, you’re a member of the global 1 percent. Take a moment to contemplate where you reside along this graph. Based on a graph by Toby Ord. This graph is evidence of inequality. It’s also evidence of a humanitarian singularity. For most of history, the vast majority of people resided in the bottom part of the graph, and virtually nobody, not even kings and emperors, could imagine the upper part of this graph.

Nagamura, “The Edified and TEDified in Japan,” Japan Times, May 31, 2011, www.japantimes.co.jp/life/2011/05/31/lifestyle/the-edified-and-tedified-in-japan. Unless noted otherwise noted, all quotes from Masaki Takeuchi were taken from interviews with the author. As Yoichi Miyamoto, president of Shimizu Corporation, wrote in the Shimizu 2012 Social Responsibility Report: www.shimz.co.jp/english/theme/dream/greenfloat.html. Chapter 6. WEALTH: The Miracle of Start-up Societies $34,000 US after taxes: Branko Milanovic, The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality (New York: Basic Books, 2011). “Next to this mysterious black hole”: Barbara Demick, Nothing to Envy: Ordinary Lives in North Korea (New York: Spiegel & Grau, 2009), 3–5. “Between 1946 and the beginning of the Korean War”: Ralph Hassig and Kongdan Oh, The Hidden People of North Korea: Everyday Life in the Hermit Kingdom (Lanham, MD: Rowman & Littlefield, 2009), 161.


pages: 409 words: 125,611

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"Robert Solow", accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Asian financial crisis, banking crisis, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, clean water, collapse of Lehman Brothers, collective bargaining, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, Plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Ronald Reagan, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

Here, I want to acknowledge the collaboration with my Columbia colleagues Bruce Greenwald and Jose Antonio Ocampo, and the work of the Commission of Experts on Reforms of the International Monetary and Financial System appointed by the President of the United Nations General Assembly, which I chaired.6 Anyone working in the area of inequality today also owes a great debt to Emmanuel Saez and Thomas Piketty, whose painstaking work has produced so much of the data that reveals the extent of inequality at the top in the U.S. and many other advanced countries. Other leading scholars whose influence will be seen here include Francois Bourgignon, Branko Milanovic, Paul Krugman, and James Galbraith.7 When Cullen Murphy, then an editor at The Atlantic Monthly, persuaded me to write an article on some of my experiences at the White House (in an article, “The Roaring Nineties,” which eventually led to my second book for a more popular audience),8 it provided not only an opportunity to articulate ideas I had been pondering for some years but also a new challenge: Could I address complex ideas in a succinct way that would make them widely accessible?

But what about the rest of the world? Is the gap between countries narrowing, as rising economic powers like China and India have lifted hundreds of millions of people from poverty? And within poor and middle-income countries, is inequality getting worse or better? Are we moving toward a more fair world, or a more unjust one? These are complex questions, and new research by a World Bank economist named Branko Milanovic, along with other scholars, points the way to some answers. Starting in the 18th century, the industrial revolution produced giant wealth for Europe and North America. Of course, inequality within these countries was appalling—think of the textile mills of Liverpool and Manchester, England, in the 1820s, and the tenements of the Lower East Side of Manhattan and the South Side of Chicago in the 1890s—but the gap between the rich and the rest, as a global phenomenon, widened even more, right up through about World War II.


pages: 424 words: 119,679

It's Better Than It Looks: Reasons for Optimism in an Age of Fear by Gregg Easterbrook

affirmative action, Affordable Care Act / Obamacare, air freight, autonomous vehicles, basic income, Bernie Madoff, Bernie Sanders, Branko Milanovic, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, coronavirus, David Brooks, David Ricardo: comparative advantage, deindustrialization, Dissolution of the Soviet Union, Donald Trump, Elon Musk, Exxon Valdez, factory automation, failed state, full employment, Gini coefficient, Google Earth, Home mortgage interest deduction, hydraulic fracturing, Hyperloop, illegal immigration, impulse control, income inequality, Indoor air pollution, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, labor-force participation, liberal capitalism, longitudinal study, Lyft, mandatory minimum, manufacturing employment, Mikhail Gorbachev, minimum wage unemployment, obamacare, oil shale / tar sands, Paul Samuelson, peak oil, plutocrats, Plutocrats, Ponzi scheme, post scarcity, purchasing power parity, quantitative easing, reserve currency, rising living standards, Robert Gordon, Ronald Reagan, self-driving car, short selling, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, Steve Wozniak, Steven Pinker, supervolcano, The Chicago School, The Rise and Fall of American Growth, the scientific method, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transaction costs, uber lyft, universal basic income, War on Poverty, Washington Consensus, WikiLeaks, working poor, Works Progress Administration

Benjamin Friedman, an economist at Harvard University, contends economic growth based on global trade is generating “greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy” in the developing world. At the same time, people at the top go from riding in horse-drawn broughams to boarding private jets. So would China have been better off remaining in the year 1990? Ideal would have been the same reduction of poverty minus the inequality, but this may not be possible, at least in today’s world. Branko Milanovic, a Serbian-born economist at City University of New York, whose academic specialty is inequality research, says, “In China, less poverty and more inequality were part and parcel of each other. Probably there would have been no way to get the economic growth without the increased inequality and opportunities for corruption.” Perhaps there would have been no way to achieve the rising living standards that are benefiting most of the world without the insecurity that market forces generate, or without the side effect of an outsized One Percent whose opulence is offensive and whose political influence distorts every system of government.

European Union nations spend less per capita on health care than the United States: See the “Health Expenditures and Financing” page maintained by the Organization for Economic Cooperation and Development at http://stats.oecd.org/Index.aspx?DataSetCode=SHA. In 2017, the Wall Street Journal quoted seventy-nine-year-old Carole Siesser: Joseph Walker, “Surging Drug Costs,” Wall Street Journal, May 30, 2107. By the end of the Obama administration, according to the Congressional Budget Office: “Distribution of Household Income and Federal Taxes” (Washington, DC: Congressional Budget Office, 2016). Milanovic’s research shows: Branko Milanovic, The Haves and the Have-Nots (New York: Basic Books, 2010). according to the Economic Policy Institute, think tank of the US labor movement: Lawrence Mishel and Jessica Schieder, “CEO Pay Remains High Relative to Pay of Typical Workers” (Washington, DC: Economic Policy Institute, 2017). Nike pays the Indonesian workers who sew the company’s sneakers $3 a day: Bonnie Kavoussi, “Nike Factory in Indonesia Used Military to Intimidate Workers into Giving Up Pay,” Huffington Post, January 16, 2013.


pages: 756 words: 120,818

The Levelling: What’s Next After Globalization by Michael O’sullivan

"Robert Solow", 3D printing, Airbnb, algorithmic trading, bank run, banking crisis, barriers to entry, Bernie Sanders, bitcoin, Black Swan, blockchain, Boris Johnson, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, capital controls, Celtic Tiger, central bank independence, cloud computing, continuation of politics by other means, corporate governance, credit crunch, cryptocurrency, deglobalization, deindustrialization, disruptive innovation, distributed ledger, Donald Trump, eurozone crisis, financial innovation, first-past-the-post, fixed income, Geoffrey West, Santa Fe Institute, Gini coefficient, global value chain, housing crisis, income inequality, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, liberal world order, Long Term Capital Management, longitudinal study, market bubble, minimum wage unemployment, new economy, Northern Rock, offshore financial centre, open economy, pattern recognition, Peace of Westphalia, performance metric, private military company, quantitative easing, race to the bottom, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Scramble for Africa, secular stagnation, Silicon Valley, Sinatra Doctrine, South China Sea, South Sea Bubble, special drawing rights, supply-chain management, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, tulip mania, Valery Gerasimov, Washington Consensus

This newfound sympathy for the less-well-off may have several motivations, not least the popular reception of Thomas Piketty’s book on inequality, Capital in the 21st Century, which has managed to stir interest in an arcane topic.15 In general, the lion’s share of evidence shows that inequality is at historically very high levels, especially in the larger economies of the world such as the United States and, to a growing degree, China.16 In recent years, inequality has not risen sharply (though the number of news reports on it has done so), but it has been persistently high. This persistence is perhaps the key link to sociopolitical tension in that continued inequality conditions people’s long-term expectations of the world around them. The political consequence is that people form a view that the system is against them and vote against the system. Evidence from a range of sources—the World Bank, OECD, and Branko Milanovic, a leading academic in the areas of development economics and inequality—shows that across the developed world inequality is high, with the United States and South Africa in the lead in this respect, followed by Turkey, Chile, Israel, the United Kingdom, and Spain.17 Among other countries, Sweden has become slightly less equal though its Gini coefficient is nonetheless at a very low level, close to that of France, the Netherlands, and Canada.

In the United States there has been a sharp decline in real per capita income relative to where it was in 2008. In fact, between 2010 and 2017, growth in per capita real income was easily the lowest in over sixty years. This is a useful way of picking up the sense that people feel much less well off, especially those who may have been working long enough to recall periods of stronger income growth. In the developing world the picture is somewhat different, reflecting Branko Milanovic’s assertion that though inequality has in many cases increased within countries, it has narrowed when between-country relationships are accounted for. Here the positive effects of globalization are the clearest: it, together with national growth dynamics, has lifted hundreds of millions out of poverty into relative prosperity.19 More generally, in the last twenty years wealth and incomes have exploded in many emerging countries so that sensitivity to inequality is lower.


pages: 442 words: 130,526

The Billionaire Raj: A Journey Through India's New Gilded Age by James Crabtree

accounting loophole / creative accounting, Asian financial crisis, Big bang: deregulation of the City of London, Branko Milanovic, business climate, call centre, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial rule, Commodity Super-Cycle, corporate raider, creative destruction, crony capitalism, Daniel Kahneman / Amos Tversky, Deng Xiaoping, Donald Trump, facts on the ground, failed state, Francis Fukuyama: the end of history, global supply chain, Gunnar Myrdal, income inequality, informal economy, Joseph Schumpeter, liberal capitalism, Mahatma Gandhi, McMansion, megacity, New Urbanism, offshore financial centre, open economy, Parag Khanna, Pearl River Delta, plutocrats, Plutocrats, Ponzi scheme, quantitative easing, rent-seeking, Rubik’s Cube, Silicon Valley, Simon Kuznets, smart cities, special economic zone, spectrum auction, The Great Moderation, Thomas L Friedman, transaction costs, trickle-down economics, Washington Consensus, WikiLeaks, yellow journalism, young professional

This was partly a hangover from its decades of socialism, when even its elite earned low incomes by global standards. Indian government data also often focused on consumption, a measure that gave the country a middling position in global rankings of inequality, rather than income or wealth. More recent research has proved beyond doubt the depths of India’s social divide. Churning through new data in 2016, Branko Milanovic, an economist at the World Bank, found India had higher income inequality levels than America, Brazil, and Russia, leaving it “more egalitarian than only South Africa,” a country famous for its jarring stratification.43 Other surveys found similar results.44 An IMF working paper from the same year showed that India had one of the highest and fastest-growing inequality rates in Asia.45 Its score on the Gini index—a measure of inequality where 0 means total equality and 100 total inequality—rose from 45 in 1990 to 51 in 2013.

Jagdish Bhagwati, “This Is How Economic Reforms Have Transformed India,” Hiren Mukerjee Memorial Annual Parliamentary Lecture, December 2, 2010. 39. Bhagwati and Panagariya, Why Growth Matters, pp. 44–55. 40. Jagdish Bhagwati, “Scaling Up the Gujarat Model,” The Hindu, September 20, 2014. 41. Drèze and Sen, An Uncertain Glory, ch. 1. 42. Amartya Sen, “Quality of Life: India vs. China,” New York Review of Books, May 12, 2011. 43. Branko Milanovic, “The Question of India’s Inequality,” globalinequality blog, May 7, 2016. 44. Nisha Agrawal, “Inequality in India: What’s the Real Story?” World Economic Forum, October 3, 2016. 45. Jain-Chandra et al., “Sharing the Growth Dividend.” 46. Global Wealth Report 2016. 47. Chakravarty and Dehejia, “India’s Income Divergence.” 48. The ADB paper concluded: “Had inequality not increased, India’s poverty headcount would have been reduced from 32.7% to 29.5% in 2008.”


pages: 198 words: 52,089

Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It by Richard V. Reeves

affirmative action, Affordable Care Act / Obamacare, assortative mating, Bernie Sanders, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, circulation of elites, cognitive dissonance, desegregation, Donald Trump, Downton Abbey, full employment, ghettoisation, glass ceiling, helicopter parent, Home mortgage interest deduction, housing crisis, income inequality, knowledge economy, land value tax, longitudinal study, mortgage tax deduction, obamacare, Occupy movement, plutocrats, Plutocrats, positional goods, race to the bottom, randomized controlled trial, unpaid internship, upwardly mobile, War on Poverty, We are the 99%, working-age population, zero-sum game

Pablo Mitnik, Erin Cumberworth, and David Grusky, “Social Mobility in a High-Inequality Regime,” The Annals of the American Academy of Political and Social Sciences 663, no. 1 (January 2016): pp. 140–84. 19. See, for example, Uri Dadush, Kemal Dervis, Sarah Milsom, and Bennett Stancil, Inequality in America: Facts, Trends, and International Perspectives (Brookings Institution Press, 2012); and Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization (Harvard University Press, 2016). 20. Markus Jäntti, Knut Roed, Robin Naylor, Anders Bjorklund, Bernt Bratsberg, Oddbjorn Raaum, Eva Osterbacka, and Tor Eriksson, “American Exceptionalism in a New Light: A Comparison of Intergenerational Earnings Mobility in the Nordic Countries, the United Kingdom and the United States,” Working Paper 1938 (Bonn, Germany: IZA, January 2006) (http://ftp.iza.org/dp1938.pdf).


pages: 444 words: 151,136

Endless Money: The Moral Hazards of Socialism by William Baker, Addison Wiggin

Andy Kessler, asset allocation, backtesting, bank run, banking crisis, Berlin Wall, Bernie Madoff, Black Swan, Branko Milanovic, break the buck, Bretton Woods, BRICs, business climate, business cycle, capital asset pricing model, commoditize, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, crony capitalism, cuban missile crisis, currency manipulation / currency intervention, debt deflation, Elliott wave, en.wikipedia.org, Fall of the Berlin Wall, feminist movement, fiat currency, fixed income, floating exchange rates, Fractional reserve banking, full employment, German hyperinflation, housing crisis, income inequality, index fund, inflation targeting, Joseph Schumpeter, Kickstarter, laissez-faire capitalism, land reform, liquidity trap, Long Term Capital Management, McMansion, mega-rich, money market fund, moral hazard, mortgage tax deduction, naked short selling, negative equity, offshore financial centre, Ponzi scheme, price stability, pushing on a string, quantitative easing, RAND corporation, rent control, reserve currency, riskless arbitrage, Ronald Reagan, school vouchers, seigniorage, short selling, Silicon Valley, six sigma, statistical arbitrage, statistical model, Steve Jobs, stocks for the long run, The Great Moderation, the scientific method, time value of money, too big to fail, upwardly mobile, War on Poverty, Yogi Berra, young professional

Moreover, the vast majority of the population within the Roman Empire’s border were not citizens; a Claudian census of 47 ad counted seven million Romans, so it might be safe to assume that on average the balance of noncitizens might have had annual incomes similar to those who lived in the underdeveloped nations decades or centuries ago, before there were any modern inventions, where a living was scratched off the land with primitive implements. (Note that women were not counted as citizens.) Estimates by Branko Milanovic, the lead economist in the World Bank’s research department, peg 85 percent of 268 ENDLESS MONEY the citizen, noncitizen, and slave populations of the Roman Empire at having an income of merely 234 HS annually, with this wage coming from a subsistence farming existence.19 While the absolute number of troops in the U.S. forces are a bit more than double the standing Roman army, the U.S. population that we draw from is five to eight times as large, and these are all citizens.

Cullen Murphy, Are We Rome? The Fall of an Empire and the Fate of America (New York: Houghton Mifflin Company, 2007), 73–4. Murphy credits Edward Luttwak, senior advisor at the Center for Strategic and International Studies, for analysis of Roman military strategy in his book, The Grand Strategy of the Roman Empire: From the First Century A.D. to the Third ( Baltimore: Johns Hopkins Press, 1978). 18. Ibid., 67. 19. Branko Milanovic, Roman Empire 14 CE – A Social Table, November 10, 2007, http://gpih.ucdavis.edu/files/Roman_Empire_14CE.pdf . 20. NATO Handbook, 2006, p. 247, http://www.nato.int/docu/handbook/2006/ hb-en-2006.pdf. 21. Rabbi Daniel Lapin, Genesis Journeys: Tower of Power, Audio CD 2008, rabbidaniellapin.com. 22. “Free Concert by Popular Band Preceded Obama’s Big Rally,” Free Republic, May 20, 2008, http://www.freerepublic.com/focus/f-news/2018898/posts.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

"Robert Solow", 3D printing, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, creative destruction, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, falling living standards, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, Gini coefficient, Hyperloop, income inequality, income per capita, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, labor-force participation, labour mobility, Loebner Prize, low skilled workers, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Norbert Wiener, oil shock, On the Economy of Machinery and Manufactures, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, robot derives from the Czech word robota Czech, meaning slave, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, social intelligence, speech recognition, spinning jenny, Stephen Hawking, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

And in an earlier work with Emmanuel Saez, Piketty suggested that “one could indeed argue that what has been happening since the 1970s is just a remake of the previous inverse-U curve: a new industrial revolution has taken place, thereby leading to increasing inequality, and inequality will decline again at some point, as more and more workers benefit from the innovations.… Explanations pointing out that periods of technological revolutions such as the last part of the nineteenth century (industrial revolutions) or the end of the twentieth century (computer revolution) are more favourable to the making of fortunes than other periods might also be relevant.”81 This is also the favored interpretation of the economist Branko Milanovic, who has recently put forward the idea of Kuznets waves accompanying every new technological revolution. His work does indeed show that the trajectory of inequality in Britain during the Industrial Revolution looks astoundingly similar to that of the computer revolution in America.82 However, such an interpretation immediately raises the question of why American inequality during the Second Industrial Revolution seemingly followed a different pattern.

In 2017, the International Monetary Fund (IMF) published a report showing that “technological advancement, measured by the long-term change in the relative price of investment goods, together with the initial exposure to routinization, have been the largest contributors to the decline in labor income shares in advanced economies.”40 Consistent with the hollowing out of labor markets, as computer-controlled machines have taken over the jobs of the middle class, the IMF found that the decline in labor shares has been particularly sharp for middle-skilled workers. The changing face of technology is also reflected in long-run trends in the Gini coefficient (figure 14). As Branko Milanovic has noted, “This revolution [the computer revolution], like the Industrial Revolution of the early nineteenth century, widened income disparities.”41 These periods were not only times when the profit share of income reached historical heights and the wages of ordinary citizens were stagnant. As noted above, both were episodes when technology replaced middle-income workers. In the computer era, the increase in inequality happened in large part because new technologies strongly rewarded more highly skilled symbolic analysts while driving up the capital share of national income.


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The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling

Airbnb, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, centre right, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Erik Brynjolfsson, falling living standards, financial deregulation, financial intermediation, financial repression, Gini coefficient, Goldman Sachs: Vampire Squid, Google Hangouts, Hans Rosling, happiness index / gross national happiness, income inequality, income per capita, informal economy, invisible hand, job satisfaction, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey

Angus Deaton, The Great Escape, Princeton University Press, 2013. 12. Ibid. 13. Albert Hirschman, “The changing tolerance for income inequality in the course of economic development,” World Development, vol. I, issue 12, December 1973. Angus Deaton alerted me to this idea: www.sciencedirect.com. 14. Angus Deaton in conversation with the author, July 2016. 15. Martin Wolf, review of Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization, Harvard University Press, 2016, in Financial Times, April 14, 2016. 16. Inequality of wealth (see chapter 9) is almost always higher than inequality of income because advantages and disadvantages accumulate over time. 17. Milanovic, Global Inequality. 18. Milanovic calls this “citizenship rent.” 19. Martin Wolf, review of Milanovic, Global Inequality, in Financial Times, April 14, 2016. 20.


pages: 209 words: 80,086

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

active measures, affirmative action, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, disruptive innovation, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, manufacturing employment, market bubble, market design, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shared worldview, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, winner-take-all economy, working poor, zero-sum game

., 8; Abhijit Banerjee and Esther Duflo, “What Is Middle Class about the Middle Classes around the World?” Journal of Economic Perspectives, 22, no. 2 (2008): 3–28; Dominic Wilson and Raluca Dragusanu, The Notes to Pages 123–130 181 43. 44. 45. 46. 47. 48. Expanding Middle: The Exploding World Middle Class and Falling Global Inequality, Goldman Sachs, Global Economic Paper No. 170 (2008). This definition was developed by Branko Milanovic and Shlomo Yitzhaki. “Decomposing World Income Distribution: Does the World Have a Middle Class?” Review of Income and Wealth, 48, no. 2 (2002): 155–178. Italy’s per capita is used as the upper limit because it has the lowest per capita income in the G7, and Brazil represents the lower threshold because its per capital income is close to the official poverty line in the United States and Germany (about $PPP 10 a day).


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The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Big bang: deregulation of the City of London, bilateral investment treaty, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, full employment, Gini coefficient, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, structural adjustment programs, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, very high income, Washington Consensus, Works Progress Administration, zero-coupon bond, zero-sum game

By 1998, seven of the nine producers were majority owned by Western car companies. See Rob van Tulder and Winfried Ruigrok, “European Cross-National Production Networks in the Auto Industry: Eastern Europe as the Low End of European Car Complex,” Berkeley Roundtable on the International Economy, Working Paper 121, 1998, p. 3. 116 Michael J. Haynes, “Labour, Exploitation and Capitalism in Russia Before and After 1991,” Critical Sociology 34: 4 (2008), p. 571. See also Branko Milanovic, Income Inequality and Poverty during the Transition from Planned Economy to Market Economy, Washington, DC: World Bank, 1998. 117 Gowan, Global Gamble, pp. 191, 241. 118 See Michael S. Minor, “The Demise of Expropriation as an Instrument of LDC Policy, 1980–1992,” Journal of International Business Studies 25: 1 (1994), Table 1, p. 180. 119 Thomas W. O’Donnell, “The Political Economy of Oil in the US-Iran Crisis: US Globalized Oil Interests vs.

Available at nsf.gov. 6 Martin Hart-Landsberg and Paul Burkett, “China and the Dynamics of International Accumulation: Causes and Consequences of Global Restructuring,” Historical Materialism 14: 3 (2006), p. 4. 7 Asian Development Bank, Emerging Asian Regionalism: A Partnership for Shared Prosperity, Manila: ADB, 2008, pp. 8, 16, 23. 8 Francisco H. G. Ferreira and Martin Ravallion, “Global Poverty and Inequality: A Review of the Evidence,” World Bank, Policy Research Working Paper 4623, May 2008, pp. 10–14. See also Branko Milanovic, “An Even Higher Global Inequality than Previously Thought,” World Bank, Carnegie Endowment for International Peace, MPRA Paper No. 6676, Washington, December 2007. Available at mpra.ub.uni-muenchen.de. 9 Quoted in Baker, Group of Seven, p. 212. 10 This term was initially coined by G7 policymakers in the wake of the Mexican crisis. See especially Kenen, From Halifax to Lyon. 11 “[M]uch of the world’s financial regulatory expertise, though difficult to quantify, is concentrated in the United States and United Kingdom.


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The Inequality Puzzle: European and US Leaders Discuss Rising Income Inequality by Roland Berger, David Grusky, Tobias Raffel, Geoffrey Samuels, Chris Wimer

Branko Milanovic, business cycle, Celtic Tiger, collective bargaining, corporate governance, corporate social responsibility, double entry bookkeeping, equal pay for equal work, fear of failure, financial innovation, full employment, Gini coefficient, hiring and firing, illegal immigration, income inequality, invisible hand, Long Term Capital Management, microcredit, offshore financial centre, principal–agent problem, profit maximization, rent-seeking, shareholder value, Silicon Valley, Silicon Valley startup, time value of money, very high income

The decision of the British government to impose a special tax on bankers’ bonuses, despite its potential to convince some financial executives or firms to leave the City, is the most recent indication of how democracies adjust to address inequality. Whether the level of additional taxation is an appropriate governmental 4 Bertelsmann Foundation, Arbeitsmarkt und Beschäftigung in Deutschland 2000-2009, 2009, p. 10. 5 “Does Liberté = Egalité? A Survey of the Empirical Links Between Democracy and Inequality with some Evidence on the Transition Economies,” Mark Gradstein (Ben Gurion University), Branko Milanovic (The World Bank), Journal of Economic Surveys, Vol. 18, No. 4, 2004. 198 R. Berger response is an entirely separate issue from how robust democracies respond to public concerns. Indeed, a sense of fairness and just process is more important than inequality, because when the public believes the system unfairly rewards individuals or opportunities for advancement are blocked, severe social stress can appear.


pages: 273 words: 87,159

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, obamacare, offshore financial centre, oil shock, plutocrats, Plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Ronald Reagan, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

“A Retrospective Look at Rescuing and Restructuring General Motors and Chrysler.” Journal of Economic Perspectives 29 (2) (Spring): 3–24. Goos, Maarten, Alan Manning, and Anna Salomons. 2014. “Explaining Job Polarization: Routine-Biased Technical Change and Offshoring.” American Economic Review 104 (8) (August): 2509–2526. Gordon, Robert J. 2015. “Secular Stagnation: A Supply-Side View.” American Economic Review 105 (5) (May): 54–59. Gornick, Janet C., and Branko Milanovic. 2015. “Income Inequality in the United States in Cross-National Perspective: Redistribution Revisited.” Luxembourg Income Study Center Research Brief (1/2015), May 4. Gottschalk, Marie. 2015. Caught: The Prison State and the Lockdown of American Politics. Princeton: Princeton University Press. Grunwald, Michael. 2012. The New New Deal: The Hidden Story of Change in the Obama Era. New York: Simon and Shuster.


pages: 334 words: 82,041

How Did We Get Into This Mess?: Politics, Equality, Nature by George Monbiot

Affordable Care Act / Obamacare, Alfred Russel Wallace, bank run, bilateral investment treaty, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, creative destruction, credit crunch, David Attenborough, dematerialisation, demographic transition, drone strike, en.wikipedia.org, first-past-the-post, full employment, Gini coefficient, hedonic treadmill, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, invisible hand, land reform, land value tax, market fundamentalism, meta analysis, meta-analysis, Mont Pelerin Society, moral panic, Naomi Klein, Northern Rock, obamacare, oil shale / tar sands, old-boy network, peak oil, place-making, plutocrats, Plutocrats, profit motive, rent-seeking, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, urban sprawl, wealth creators, World Values Survey

But between 1979 and 2009, productivity rose by 80 per cent, while the income of the bottom fifth fell by 4 per cent.4 In roughly the same period, the income of the top 1 per cent rose by 270 per cent.5 In the UK, the money earned by the poorest tenth fell by 12 per cent between 1999 and 2009, while the money made by the richest tenth rose by 37 per cent.6 The Gini coefficient, which measures income inequality, climbed in this country from twenty-six in 1979 to forty in 2009.7 In his book The Haves and the Have-Nots, Branko Milanovic tries to discover who was the richest person who has ever lived.8 Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots’ labour a rich man could buy. It appears that the richest man to have lived in the past 2,000 years is alive today. Carlos Slim could buy the labour of 440,000 average Mexicans. This makes him fourteen times as rich as Crassus, nine times as rich as Carnegie and four times as rich as Rockefeller.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"Robert Solow", banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

They are a group that have rightly been defined as ‘the deserving rich’, a group ‘who deserve their hard-earned places, those who, through a mix of exceptional skill, effort and risktaking, have contributed to increasing the size of the cake by creating new wealth and in ways which benefit others as well as themselves. Most opinion would regard them as “deserving” of exceptional rewards.’ Yet the evidence is that an increasing proportion of today’s super-rich fall into the category of the ‘undeserving rich’, a group ‘who rig the system to enrich themselves by unfairly grabbing a larger size of the cake at the expense of someone else.’358 The World Bank economist, Branko Milanovic, has used a similar distinction between what he calls ‘good’ and ‘bad inequality’. 359 Personal fortunes that arise from exceptional personal risk-taking, innovation and merit are examples of good inequality. Today, most of the wealth gap is arguably the product of bad inequality. Although there are plenty of individual examples of the modern tycoon taking big personal financial risks to help improve productive potential and spread opportunities, a growing proportion of trading activities, big business deals and accountancy practices of recent times have involved less a process of value creation that would have increased economic strength, and more a diversion and change of ownership of existing value and wealth.


Undoing the Demos: Neoliberalism's Stealth Revolution by Wendy Brown

Affordable Care Act / Obamacare, bitcoin, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, corporate governance, credit crunch, crowdsourcing, David Brooks, Food sovereignty, haute couture, immigration reform, income inequality, invisible hand, labor-force participation, late capitalism, means of production, new economy, obamacare, occupational segregation, Philip Mirowski, Ronald Reagan, sexual politics, shareholder value, sharing economy, The Chicago School, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trickle-down economics, Washington Consensus, Wolfgang Streeck, young professional, zero-sum game

New York Times, July 15, 2013, p. a15, http://www.nytimes.com/2013/07/15/ opinion/krugman-hunger-games-usa.html; Krugman, End This Depression Now! (New York: Norton, 2012); Krugman, The Return of Depression Economics and the Crisis of 2008 (New York: Norton, 2009); and Krugman, The Great Unraveling: Losing Our Way in the New Century (New York: Norton, 2003); James Ferguson, Global Shadows: Africa in the Neoliberal World Order (Durham: Duke University Press, 2006); Branko Milanovic, The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality (New York: Basic Books, 2010); Amartya Sen, Development as Freedom (New York: Random House, 1999); Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi, “Report by the Commission on the Measurement of Economic Performance and Social Progress,” September 14, 2009, available at http://www.stiglitz-sen-fitoussi.fr/ documents/rapport_anglais.pdf. 25.


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Leading From the Emerging Future: From Ego-System to Eco-System Economies by Otto Scharmer, Katrin Kaufer

Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Asian financial crisis, Basel III, Berlin Wall, Branko Milanovic, cloud computing, collaborative consumption, collapse of Lehman Brothers, colonial rule, Community Supported Agriculture, creative destruction, crowdsourcing, dematerialisation, Deng Xiaoping, en.wikipedia.org, European colonialism, Fractional reserve banking, global supply chain, happiness index / gross national happiness, high net worth, housing crisis, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Johann Wolfgang von Goethe, Joseph Schumpeter, Kickstarter, market bubble, mass immigration, Mikhail Gorbachev, Mohammed Bouazizi, mutually assured destruction, Naomi Klein, new economy, offshore financial centre, peak oil, ride hailing / ride sharing, Ronald Reagan, Silicon Valley, smart grid, Steve Jobs, technology bubble, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Washington Consensus, working poor, Zipcar

Achim Steiner, “Rehabilitating Nature-Based Assets Generates Jobs, Wealth and Restoration of Multi-Trillion Dollar Services,” press release, UNEP, June 3, 2010, www.unep.org/Documents.Multilingual/Default.asp?DocumentID=628&ArticleID=6596&l=en (accessed December 9, 2012). 22. The richest 1 percent of the world’s adult population have incomes higher than US$500,000; Davies et al., “Estimating the Level and Distribution of Global Household Wealth.” 23. Branko Milanovic, “Global Income Inequality: What It Is and Why It Matters,” UN Department of Economic and Social Affairs, working paper no. 26 (2006), www.wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2006/03/02/ 000016406_20060302153355/Rendered/PDF/wps3865.pdf (accessed December 9, 2012), 9. 24. FAO, The State of Food Security in the World, Executive Summary, Rome, Italy, 2012, www.fao.org/hunger/en/ (accessed December 9, 2012), 2. 25.


pages: 339 words: 95,270

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein

Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, Berlin Wall, Bernie Sanders, Branko Milanovic, Bretton Woods, British Empire, business climate, business cycle, capital controls, centre right, collective bargaining, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, deglobalization, deindustrialization, Deng Xiaoping, Donald Trump, Double Irish / Dutch Sandwich, Fall of the Berlin Wall, falling living standards, financial innovation, financial repression, fixed income, full employment, George Akerlof, global supply chain, global value chain, illegal immigration, income inequality, intangible asset, invention of the telegraph, joint-stock company, land reform, Long Term Capital Management, Malcom McLean invented shipping containers, manufacturing employment, Martin Wolf, mass immigration, Mikhail Gorbachev, money market fund, mortgage debt, New Urbanism, offshore financial centre, oil shock, open economy, paradox of thrift, passive income, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, Scramble for Africa, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Wolfgang Streeck

,” Bild, October 27, 2010; Stefan Wagstyl, “Greeks Find Support for German Reparations Claims—in Germany,” Financial Times, March 17, 2015; Mehreen Khan and Paul McLean, “Dijsselbloem under Fire after Saying Eurozone Countries Wasted Money on ‘Alcohol and Women,’” Financial Times, March 21, 2017. 7. John A. Hobson, Imperialism: A Study (New York: James Pott, 1902). See also Thomas Hauner, Branko Milanovic, and Suresh Naidu, “Inequality, Foreign Investment, and Imperialism,” Stone Center Working Paper 2017, for a modern quantitative analysis of Hobson’s thesis. 8. Kenneth Austin, “Communist China’s Capitalism: The Highest Stage of Capitalist Imperialism,” World Economics, January–March 2011, 79–94. ONE From Adam Smith to Tim Cook 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 2 vols., ed.


Rogue States by Noam Chomsky

anti-communist, Asian financial crisis, Berlin Wall, Branko Milanovic, Bretton Woods, business cycle, capital controls, collective bargaining, colonial rule, creative destruction, cuban missile crisis, declining real wages, deskilling, Edward Snowden, experimental subject, Fall of the Berlin Wall, floating exchange rates, land reform, liberation theology, Mikhail Gorbachev, Monroe Doctrine, new economy, oil shock, RAND corporation, Silicon Valley, strikebreaker, structural adjustment programs, Tobin tax, union organizing, Washington Consensus

Montreal Meeting (First Extraordinary Meeting of the Conference of Parties to the UN Convention on Biological Diversity to Finalize and Adopt a Protocol on Biosafety—Resumed Session) (2000), Andrew Pollack, “130 Nations Agree on Safety Rules for Biotech Food,” NYT, Jan. 30, 2000; Pollack, “Talks on Biotech Food Turn on a Safety Principle,” NYT, Jan. 28, 2000. 17. Edward Herman, “Corporate Junk Science in the Media,” Z magazine, Jan. and Feb. 1999. 18. World Bank economist Branko Milanovic, cited in Doug Henwood, Left Business Observer 93, Feb. 2000. About the Author © Don Usner Noam Chomsky is widely regarded as one of the foremost critics of US foreign policy in the world. He has published numerous groundbreaking books, articles, and essays on global politics, history, and linguistics. Among his recent books are Masters of Mankind and Hopes and Prospects. This book is part of a collection of twelve new editions from Haymarket Books of Chomsky’s classic works.


pages: 403 words: 111,119

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth

"Robert Solow", 3D printing, Asian financial crisis, bank run, basic income, battle of ideas, Berlin Wall, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, dematerialisation, disruptive innovation, Douglas Engelbart, Douglas Engelbart, en.wikipedia.org, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, land reform, land value tax, Landlord’s Game, loss aversion, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, mobile money, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, Richard Thaler, Ronald Reagan, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, Steve Ballmer, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons

In 2014 even economists at the International Monetary Fund (IMF) noted with frustration that, despite evidence to the contrary, ‘the notion of tradeoff between redistribution and growth seems deeply embedded in policymakers’ consciousness’.12 Perhaps that is why, in the midst of severe recession following the 2008 financial crash, the vice-chairman of Goldman Sachs, Lord Griffiths, felt he could justify a return to lavish bonuses for his city traders with the claim that, ‘We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all.’13 Why inequality matters Inequality may not be inevitable but, in line with the neoliberal script, it was until recently seen as no cause for alarm, and certainly not as an appropriate target for policy. ‘Of all the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution,’ wrote the influential economist Robert Lucas in 2004.14 For most of the last 20 years at the World Bank, according to one of its lead economists, Branko Milanovic, ‘even the word inequality was not politically acceptable, because it seemed like something wild or socialist’.15 For others, the acceptable degree of social inequality came to be a matter of personal or political preference – as Britain’s former prime minister Tony Blair quipped of the UK’s top footballer, ‘It’s not a burning ambition for me to make sure that David Beckham earns less money.’16 Over the past decade, however, perspectives on inequality have shifted dramatically as its systemically damaging effects – social, political, ecological and economic – have become all too clear.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low-wage service sector, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Alfred Marshall, 1961, Principles of Economics, vol. II, London: Macmillan for the Royal Economic Society, pp. 598–614. 9.    J. H. Burns and H. L. A. Hart, eds., 1977, A Comment on the Commentaries and A Fragment on Government, The Collected Works of Jeremy Bentham, Oxford: Clarendon Press, p. 393. 10.  John Cunningham Wood, ed., 1993, Alfred Marshall: Critical Assessments, Volume IV, London: Routledge, p. 290. 11.  Branko Milanovic, 2016, Global Inequality: A New Approach for the Age of Globalization, Cambridge, MA: Harvard University Press, p. 166. 12.  Pew Research Center, 2015, ‘The American Middle Class is Losing Ground: No Longer the Majority and Falling Behind Financially’, 9 December; www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ 13.  Robert Reich, 2012, Beyond Outrage: What Has Gone Wrong with Our Economy and Our Democracy, and How to Fix It, New York: Vintage Books, p. 142. 14.  


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The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Alfred Marshall, 1961, Principles of Economics, vol. II, London: Macmillan for the Royal Economic Society, pp. 598–614. 9. J. H. Burns and H. L. A. Hart, eds., 1977, A Comment on the Commentaries and A Fragment on Government, The Collected Works of Jeremy Bentham, Oxford: Clarendon Press, p. 393. 10. John Cunningham Wood, ed., 1993, Alfred Marshall: Critical Assessments, Volume IV, London: Routledge, p. 290. 11. Branko Milanovic, 2016, Global Inequality: A New Approach for the Age of Globalization, Cambridge, MA: Harvard University Press, p. 166. 12. Pew Research Center, 2015, ‘The American Middle Class is Losing Ground: No Longer the Majority and Falling Behind Financially’, 9 December; www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ 13. Robert Reich, 2012, Beyond Outrage: What Has Gone Wrong with Our Economy and Our Democracy, and How to Fix It, New York: Vintage Books, p. 142. 14.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

"Robert Solow", accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

With their huge populations, the income advances in the two Asian giants carry real weight in the global income distribution. But national averages, which look only at inequality between countries are not fully adequate measures given that there is great inequality within many countries—and especially in the rapidly growing countries of Brazil, Russia, India, and China (called the BRICs), which have made such a big difference in the middle parts of the global income distribution.15 Branko Milanovic reports that about two-thirds of global inequality currently is due to differences in income levels between countries, a big shift from the nineteenth-century pattern, when only 15 percent of measured inequality was due to national differences, and 85 percent due to income inequality within countries.16 Another way of assessing inequality suggested by this pattern is to look at what has happened to individual incomes across the world.17 The incomes of the Forbes Rich List have soared massively ahead of those of people living in the poorest African countries whose economies have been shrinking.


pages: 497 words: 123,778

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

affirmative action, Affordable Care Act / Obamacare, Andrew Keen, basic income, battle of ideas, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, clean water, cognitive bias, conceptual framework, David Brooks, deindustrialization, demographic transition, desegregation, Donald Trump, en.wikipedia.org, Francis Fukuyama: the end of history, German hyperinflation, gig economy, Gini coefficient, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, Plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, secular stagnation, sharing economy, Thomas L Friedman, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

See also Christopher Fariss, “Respect for Human Rights Has Improved over Time: Modeling the Changing Standard of Accountability,” American Political Science Review 108, no. 2 (2013): 297–318. 21. See Thomas Piketty and Gabriel Zucman, “Capital Is Back: Wealth-Income Ratios in Rich Countries 1700–2010,” Quarterly Journal of Economics 129, no. 3 (2014): 1255–1310; Emmanuel Saez and Gabriel Zucman, “Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data,” Quarterly Journal of Economics 131, no. 2 (2016): 519–578; Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization (Cambridge, MA: Harvard University Press, 2016); and Lawrence H. Summers, “US Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound,” Business Economics 49, no. 2 (2014): 65–73. 22. Eliana Dockterman, “NYC Mayor to Skip Hillary Clinton Launch Event,” Time, June 10, 2015, http://time.com/3916983/bill-de-blasio-hillary-clinton-campaign-launch-nyc/. 23.


pages: 496 words: 131,938

The Future Is Asian by Parag Khanna

3D printing, Admiral Zheng, affirmative action, Airbnb, Amazon Web Services, anti-communist, Asian financial crisis, asset-backed security, augmented reality, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Basel III, blockchain, Boycotts of Israel, Branko Milanovic, British Empire, call centre, capital controls, carbon footprint, cashless society, clean water, cloud computing, colonial rule, computer vision, connected car, corporate governance, crony capitalism, currency peg, deindustrialization, Deng Xiaoping, Dissolution of the Soviet Union, Donald Trump, energy security, European colonialism, factory automation, failed state, falling living standards, family office, fixed income, flex fuel, gig economy, global reserve currency, global supply chain, haute couture, haute cuisine, illegal immigration, income inequality, industrial robot, informal economy, Internet of things, Kevin Kelly, Kickstarter, knowledge worker, light touch regulation, low cost airline, low cost carrier, low skilled workers, Lyft, Malacca Straits, Mark Zuckerberg, megacity, Mikhail Gorbachev, money market fund, Monroe Doctrine, mortgage debt, natural language processing, Netflix Prize, new economy, off grid, oil shale / tar sands, open economy, Parag Khanna, payday loans, Pearl River Delta, prediction markets, purchasing power parity, race to the bottom, RAND corporation, rent-seeking, reserve currency, ride hailing / ride sharing, Ronald Reagan, Scramble for Africa, self-driving car, Silicon Valley, smart cities, South China Sea, sovereign wealth fund, special economic zone, stem cell, Steve Jobs, Steven Pinker, supply-chain management, sustainable-tourism, trade liberalization, trade route, transaction costs, Travis Kalanick, uber lyft, upwardly mobile, urban planning, Washington Consensus, working-age population, Yom Kippur War

CLICK HERE TO SIGN UP Already a subscriber? Provide your email again so we can register this ebook and send you more of what you like to read. You will continue to receive exclusive offers in your inbox. Notes Introduction: Asia First 1 Only the African Group in the United Nations has more members with fifty-four. Asia is home to 2,301 spoken languages, and Africa ranks second with just over 2,100 languages. 2 Branko Milanovic, “Global Income Inequality by the Numbers: In History and Now—An Overview,” World Bank Policy Research Paper no. 6259, November 2012, http://documents.worldbank.org/curated/en/959251468176687085/pdf/wps6259.pdf. 3 Kishore Mahbubani, Can Asians Think? Understanding the Divide Between East and West (New York: Steerforth Press, 2001). 4 Asian Development Bank, Key Indicators for Asia and the Pacific, 2015 (Manila: Asian Development Bank, 2015), https://www.adb.org/sites/default/files/publication/175162/ki2015.pdf. 5 Homi Kharas, “The Unprecedented Expansion of the Global Middle Class: An Update,” Global Economy & Development Working Paper no. 100, Brookings Institution, February 2017, https://www.brookings.edu/wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf. 6 Since most ancient cultures thought of themselves as the center of the world, Asian civilizations had names for one another but no word for “Asia.”


Adam Smith: Father of Economics by Jesse Norman

"Robert Solow", active measures, Andrei Shleifer, balance sheet recession, bank run, banking crisis, Basel III, Berlin Wall, Black Swan, Branko Milanovic, Bretton Woods, British Empire, Broken windows theory, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, centre right, cognitive dissonance, collateralized debt obligation, colonial exploitation, Corn Laws, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, David Ricardo: comparative advantage, deindustrialization, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Fellow of the Royal Society, financial intermediation, frictionless, frictionless market, future of work, George Akerlof, Hyman Minsky, income inequality, incomplete markets, information asymmetry, intangible asset, invention of the telescope, invisible hand, Isaac Newton, Jean Tirole, John Nash: game theory, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, lateral thinking, loss aversion, market bubble, market fundamentalism, Martin Wolf, means of production, money market fund, Mont Pelerin Society, moral hazard, moral panic, Naomi Klein, negative equity, Network effects, new economy, non-tariff barriers, Northern Rock, Pareto efficiency, Paul Samuelson, Peter Thiel, Philip Mirowski, price mechanism, principal–agent problem, profit maximization, purchasing power parity, random walk, rent-seeking, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, scientific worldview, seigniorage, Socratic dialogue, South Sea Bubble, special economic zone, speech recognition, Steven Pinker, The Chicago School, The Myth of the Rational Market, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, time value of money, transaction costs, transfer pricing, Veblen good, Vilfredo Pareto, Washington Consensus, working poor, zero-sum game

Hence a wealth of information creates a poverty of attention’, in ‘Designing Organizations for an Information-Rich World’, in Martin Greenberger (ed.), Computers, Communication, and the Public Interest, Johns Hopkins Press 1971 Movement of skilled workers: see Dani Rodrik, ‘Premature Deindustrialization’, NBER Working Paper 20935, 2015 Modern divergences in mortality and health: cf. Anne Case and Angus Deaton, ‘Mortality and Morbidity in the 21st Century’, Brookings Papers on Economic Activity, Spring 2017 Gated communities: see Branko Milanovic, ‘The Welfare State in the Age of Globalization’, http://glineq.blogspot.co.uk/2017/03/the-welfare-state-in-age-of.html Capacity of companies to bully cities, states: Cf. e.g. Olivia Solon, ‘How Uber conquers a city in seven steps’, Guardian, 12 April 2017; Deborah Haynes and Marcus Leroux, ‘Boeing has power to turn off planes say British military chiefs’, The Times, 28 September 2017 Limitations of economics: two projects aiming to address different limitations are the Rebuilding Macroeconomics Network at the UK’s National Institute of Economic and Social Research, and the CORE Economics Education programme directed by Wendy Carlin (http://www.core-econ.org).


pages: 554 words: 158,687

Profiting Without Producing: How Finance Exploits Us All by Costas Lapavitsas

"Robert Solow", Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, computer age, conceptual framework, corporate governance, credit crunch, Credit Default Swap, David Graeber, David Ricardo: comparative advantage, disintermediation, diversified portfolio, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, financial deregulation, financial independence, financial innovation, financial intermediation, financial repression, Flash crash, full employment, global value chain, global village, High speed trading, Hyman Minsky, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, job satisfaction, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, London Interbank Offered Rate, low skilled workers, M-Pesa, market bubble, means of production, money market fund, moral hazard, mortgage debt, Network effects, new economy, oil shock, open economy, pensions crisis, price stability, Productivity paradox, profit maximization, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, Robert Shiller, Robert Shiller, savings glut, Scramble for Africa, secular stagnation, shareholder value, Simon Kuznets, special drawing rights, Thales of Miletus, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, total factor productivity, trade liberalization, transaction costs, union organizing, value at risk, Washington Consensus, zero-sum game

Quigley, NY: Russell Sage Foundation, 2006, pp. 221–58; Facundo Alvaredo and Emmanuel Saez, ‘Income and Wealth Concentration in Spain from a Historical and Fiscal Perspective’, Journal of the European Economic Association 7:5, 2009, pp. 1140–67; Anthony Atkinson, Thomas Piketty, and Emmanuel Saez, ‘Top Incomes in the Long Run of History’, Journal of Economic Literature 49:1, 2011, pp. 3–71. 23 Simon Kuznets, ‘Economic Growth and Income Inequality’, American Economic Review 45:1, 1955. 24 Branko Milanovic has produced innovative work that assesses global inequality by measuring within-country as well as across-country inequality. The top 10 percent of the income distribution in a poor developing country, after all, might have a lower average income than the bottom 10 percent of a rich developed country. It appears that the years of financialization have witnessed a sharpening of global inequality, although the trends can vary.


pages: 537 words: 158,544

Second World: Empires and Influence in the New Global Order by Parag Khanna

"Robert Solow", Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, continuation of politics by other means, crony capitalism, Deng Xiaoping, different worldview, Dissolution of the Soviet Union, Donald Trump, Edward Glaeser, energy security, European colonialism, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, Gini coefficient, global reserve currency, global supply chain, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, Khyber Pass, Kickstarter, knowledge economy, land reform, low cost airline, low skilled workers, mass immigration, means of production, megacity, Monroe Doctrine, Nelson Mandela, oil shale / tar sands, oil shock, open borders, open economy, Parag Khanna, Pax Mongolica, Pearl River Delta, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, rising living standards, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

See Mohammed Ayoob, The Third World Security Predicament: State Making, Regional Conflict, and the International System (Boulder, Colo.: Lynne Rienner, 1995); and Stephen D. Krasner, Structural Conflict: The Third World Against Global Liberalism (Berkeley: University of California Press, 1985). 38. On the bifurcation of the international economic order and upward/downward mobility within it as a result of globalization, see Branko Milanovic, Worlds Apart: Measuring International and Global Inequality (Princeton, N.J.: Princeton University Press, 2005), ch. 7. 39. One measure of progress up the ladder of modernity is “stateness.” Stateness refers to a government’s capacity to enforce its power, ranging from minimal functions (public goods, property rights, defense) to intermediate functions (addressing externalities, education, regulation, social insurance) to more activist roles (industrial policy, wealth redistribution).


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"Robert Solow", 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, disruptive innovation, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low cost carrier, low earth orbit, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, plutocrats, Plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

The touchstone of morality in a global society is leveraging connectedness for utilitarian ends: achieving the greatest good for the greatest number of people. We must apply John Rawls’s test of societal morality on a global scale, judging ourselves by how we treat those at the bottom and justifying inequality to the extent that it improves the lives of the poorest. There is still potential to turn what the economist Branko Milanovic calls “bad” inequality into “good” inequality, which motivates and enables efforts for achievement. We are, in fact, on the right track: Globalization and connectivity have improved the quality of life for billions of people even if they have also made high inequality inevitable. The time has come for even bolder thinking about how to leverage near-total connectivity to advance large-scale human development.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

"Robert Solow", accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Andrei Shleifer, anti-communist, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Berlin Wall, Bob Noyce, Branko Milanovic, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, credit crunch, Credit Default Swap, crony capitalism, currency peg, debt deflation, Deng Xiaoping, discovery of the americas, Donald Trump, Erik Brynjolfsson, European colonialism, eurozone crisis, falling living standards, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, Frederick Winslow Taylor, full employment, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, global supply chain, global value chain, Gordon Gekko, greed is good, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, TaskRabbit, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, Yom Kippur War, zero-sum game

Cunliffe, By Steppe, Desert, & Ocean, op. cit. 24. Paul Vallely, “How Islamic inventors changed the world”, The Independent, March 11th 2006 25. Hourani, A History of the Arab Peoples, op. cit. 26. Frankopan, The Silk Roads, op. cit. 27. Keay, China: A History, op. cit. 28. Greg Clark, Global Cities: A Short History 29. Steven A. Epstein, An Economic and Social History of Later Medieval Europe, 1000–1500 30. Ibid. 31. Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization 32. It is striking how these areas in the middle kingdom were still the subject of territorial dispute in the 20th century. 33. Maddison, Contours of the World Economy, op. cit. Chapter 4 – Europe revives: 1000–1500 1. Smil, Energy and Civilization, op. cit. 2. Robert Bartlett, The Making of Europe: Conquest, Colonization and Cultural Change 950–1350 3.


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Capital in the Twenty-First Century by Thomas Piketty

"Robert Solow", accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, centre right, circulation of elites, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, twin studies, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

Angus Maddison (1926–2010) was a British economist who specialized in reconstituting national accounts at the global level over a very long run. Note that Maddison’s historical series are concerned solely with the flow of output (GDP, population, and GDP per capita) and say nothing about national income, the capital-labor split, or the stock of capital. On the evolution of the global distribution of output and income, see also the pioneering work of François Bourguignon and Branko Milanovic. See the online technical appendix. 21. The series presented here go back only as far as 1700, but Maddison’s estimates go back all the way to antiquity. His results suggest that Europe began to move ahead of the rest of the world as early as 1500. By contrast, around the year 1000, Asia and Africa (and especially the Arab world) enjoyed a slight advantage. See Supplemental Figures S1.1, S1.2, and S1.3 (available online). 22.