Branko Milanovic on inequality and the new global plutocracy

Last week I interviewed Branko Milanovic, one of the world’s foremost authorities on inequality. Our conversation moved freely from global trends in inequality over the past quarter-century to the rise of a new plutocracy and the threat it poses to democratic governance. I thought it worthwhile to transcribe our chat in full.

A bit more about Branko: he is currently a professor at the CUNY Graduate Centre, where he also heads the Luxembourg Income Study Centre. His most recent book is The Haves and the Have-nots: A Brief and Idiosyncratic History of Global Inequality and he has a great blog worth reading. Here is our conversation, edited lightly for clarity and length:

Michal Rozworski: How has global income inequality evolved recently?

Branko Milanovic: Global income inequality is really defined as inequality between individuals. So, in principle, it’s the same as inequality within a country if you were to assume that the world is one country. Surely we have to allow for differences in price levels – that’s really the important difference between inequality and global inequality because price differences between countries in Africa and, say, Norway are enormous and, obviously, we have to allow for the fact that things are much cheaper in Africa.

Having done all of that, the basic story is that, first, the level of global inequality is extremely high. It’s higher than within any one country, which is not surprising. But what is also interesting is that this level, to any extent we can really determine, has been slightly going down over the past ten years approximately. In other words, all the evidence we have points to a downward trend, except that we are unsure if the trend is larger or smaller. The reason for this is that the relatively poor and populous countries, such as China, India, Indonesia, Vietnam and so on, have now had 15 or 20 years of very high growth rates – higher than the rich countries – and they are the ones pushing inequality down.

The final point is that all this happens while inequality in all the countries I mentioned, as well as in the US and Europe, is going up. (more…)

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