Written By: - Date published: 7:01 am, August 14th, 2016 - 55 comments
Categories: capitalism, class war, economy, Globalisation - Tags: activism, bernard hickey, Branko Milanovic, data visualisation, globalisation, graphs
Every now and then there an insight, theory, or visualisation exposes a brilliantly clear understanding of a complex situation or set of phenomena. Serbian economist Branko Milanovic’s graph of the change in global income between 1988 and 2008 by percentile (called by some the “elephant graph”) is one such visualisation.
What this graph shows is that over two decades globalisation has done nothing to raise the incomes of the world’s poorest 5%, has significantly raised incomes of the majority (10 – 70%), done little or nothing for the 75 – 95% group (these are the poorer workers in rich “Western” countries), and done very nicely for the richest of the rich. Here’s an annotated version:
This is why I, like many lefties, believe in free trade, because it is good for the majority of the world’s people (though there is still work to do for the very poorest). But it also emphasises the concerns that lefties in the rich countries have about their own countries and citizens, the benefits are not being shared fairly (wages are stagnant, many workers have lost their jobs). Many commentators (such as the two links above) believe that this explains the rising politics of discontent in rich countries, as evidenced by Brexit and Trump. Count our own Bernard Hickey firmly in this camp, as he discusses the elephant graph in this NBR audio segment (5:15).
The message of the elephant graph is that the poorest of the poor must be helped, and that rich countries must share wealth more evenly. The big picture of course is that all economic activity and trade needs to be set in the context of a finite environment and the urgent requirements of reducing climate change. “Challenging” would be an understatement.