It’s funny how the latest crisis always seems to have the same recommendations from the great and the good of the land – give us more money and more power. Pollution? More money and more power, please. Global poverty? More money and more power, please. Climate change? More money and more power, please. So it’s not really surprising that when the great and the good decide that global wealth inequality is a huge and growing problem, well, we all know what they’re going to recommend, don’t we?
As we all know, because we’re all told it so often, global wealth inequality is rising. Therefore something must be done! Punitive taxation and the bureaucrats get to spend everything, obviously.
The one little problem with this is that the aim, intention, is always punitive taxation and the bureaucrats get to spend everything and damn the actual evidence used to support the proposal. It’s all sub-Marxoid ever increasing concentrations of summat and therefore the kulaks need to be shot. The aim always being to shoot the kulaks and who cares about the reasoning?
30 years back — and yes, I am old enough to recall this — it was all about how income was becoming more unequal in its distribution. Therefore punitive taxes, the bureaucrats get to allocate everything and hey, look, we can shoot the kulaks! This all rather fell apart when it was pointed out that the actual effect of global neoliberalism was that income inequality was declining. For which we can thank the work of Branko Milanovic. Who did prove that income inequality was declining under global neoliberalism.
Thus, to my mind, the move to squeeing about wealth inequality. For we need that reason to shoot the kulaks and damn the intellectual perversions required to find it.
And, well, Branko and his numbers again, eh?
New paper on the capitalization of the world with @BrankoMilan just out!
Capital income remains very unequally distributed worldwide, but inequality has slightly declined.
Oh. Global neoliberalism is reducing the inequality of capital income, is it? Why yes yes it is:
Global capital income inequality has declined in the 21st century, with the Gini coefficient falling from 97% to 94%. Over the same period, the share of the world population with annual capital income above $100 increased from 12% to 27%. This implies more than a doubling of the number of individuals earning positive income from interest, dividends, rents, and privately-funded pensions.
That’s alarmingly high, yes. We’d all like it to be lower too. I certainly would. I’d like us all to be living in that bourgeois American upper middle class in fact. $100k a year family incomes, $500k (later in life, obviously) in the 401(k) and all that. You know, bring it on.
We even have a mapped out plan about how we get from here to there. It’s in the SRES, which is the foundation of all that IPCC work about climate change. If we have globalised neoliberalism for the rest of this century then we’ll all be approaching that — in current $ — American upper middle class income. If we power that by going fracking, developing out solar and so on then climate change won’t be a problem either. If we power it by not going fracking and turn back to the use of coal then Bangladesh gets it. But the base idea that all will rise up into those bourgeois pleasures of three squares, a warm crib and choices in life really is in there. And, yes, it’s globalised neoliberalism that will take us there.
So, while it is alarmingly high, that inequality, we’re already solving it as we did income inequality — global neoliberalism. Pity no one gets to shoot the kulaks but there we are, reality doesn’t always accord with desires.
