“The Globalization of Inequality” has just been published in a paperback edition with a new preface by the author. Written by French-born Francois Bourguignon, former director at the Paris School of Economics and chief economist and senior vice president of the World Bank, this book sheds light on the complex role of globalization in the rise of inequality.
The subject of globalization is still a source of discord. Some believe it has brought wealth to emerging nations while others blame it for a surge in inequality in the world over the last 20 years. The title of this book has two meanings, explains Bourguignon: “On the one hand, it is a reference to questions of global inequality. The importance that is given in international economic debates to effectively re-equilibrating standards of living between countries is the clearest sign of this. But the title also resonates with the feeling that a rise in inequalities affects all countries on the planet and is becoming a matter of grave concern.”
According to the World Bank, the number of people living on less than $1.25 a day, the threshold of extreme poverty, was 1.3 billion in 2008 which corresponds to 20 percent of the world population. If we make the same calculation with $2.50 per day, the total number of poor people reaches 3 billion which is equivalent to nearly half of humanity.
However, the remarkable economic development of China, India and emerging countries especially in East Africa since the 2000s has led to a dramatic reduction in inequality and poverty in the world. This economic growth is due to a set of factors including organizational and technological innovations, as well as material factors such as production equipment and infrastructure or non-material factors such as education, job-training and scientific or technical knowhow. The access to the technology and to the markets of the Northern countries has spearheaded the growth of the developing countries in the global South. Furthermore, the increasing volume of South-South trade is also contributing to a sustained growth in that part of the world.
What about inequality within countries? Is it rising? Inequality has strongly increased in the US where the top 10 percent has acquired nearly half of all the gains from growth over a period of 30 years. Income inequality has also taken place in the United Kingdom, Germany, Netherlands, and Italy and even in the Scandinavian countries reputed for their egalitarianism. This phenomenon is also prevalent in China, India, Indonesia and Bangladesh.
The extraordinary development of information technology has not only transformed the modes of production of goods and services but it has also created a growing need for IT technicians. The author believes that these technological innovations, rather than the income or profit they generate, are to a certain extent responsible for the “explosion of very high incomes” that can be seen all over the world. For example, the development of communications technology has widened the audience for artists. The Italian opera singer Enrico Caruso, thanks to the invention of the record, became an international star. He sold around a million records. A century later, another Italian opera singer, Luciano Pavarotti sold more than 100 million records. In the world of publishing, J.K. Rowling, the author of the Harry Potter books, receives a yearly income $300 million when 90 percent of English language authors earn less than $80,000 annually. The salaries of CEOs are also directly linked to the size of the companies they manage. The heads of the 10 biggest American companies are paid four times as much as the CEOs of smaller companies.
“The question of whether these salaries reflect real talent is open to debate. The argument that enormous salaries of several million of euros or dollars are necessary incentives for CEOs to perform at a higher level seems rather specious…It is also possible that, over time, these practices have become established as new social norms, weakening the link between remuneration and true executive productivity,” writes Bourguignon.
One of the most effective institutional changes was without any doubt the deregulation of markets and the economic liberalization implemented in the US during the Reagan administration and in the United Kingdom by the Margaret Thatcher government. This would later spread to the rest of the world.
Financial liberalization facilitated the allocation of funds, thus improving the efficiency of the economy as a whole and contributed to the development of sectors and businesses that were initially deprived of access to credit.
“Should we conclude from this that financial liberalization, whatever it might be, contributes to income equality? Far from it. The deregulation in question was of a very specific kind and was neither directly related to the development of new financial products nor connected with the explosion in the international mobility of capital,” writes Bourguignon.
The main question is how to maintain the trend toward global equality while curbing the rise in national inequalities. Bourguignon believes that it is not clear whether taxation and current income redistribution is the best way of tackling inequality. In the preface to the paperback edition, he says “there may not be other choices, at least in the short term, if inequality is likely to increase further due to the pressure of automation and artificial intelligence on jobs.” This book warns against protectionism as this will have a negative impact on the global economy and it will also prevent poor and emerging countries from catching up with developed countries. The anti-globalization rhetoric in Europe and the US is largely caused by the flow of migrants.
“It is important to stress in particular, that the evidence that unskilled migrants cause wage inequality among native workers, or increase their levels of unemployment, is weak, contrary to the relentless assertions of the anti-immigration party leaders in advanced countries. It is vital that these facts, and global progress toward development-friendly migration policies are publicly discussed without the debate being hijacked by populist figures.”
Although Francois Bourguignon was rather confident that globalization was leading us to a more unequal world, he now believes that most Asian economies will continue to catch up with the rest of the world.
Incidentally, a few weeks ago, the conspicuous absence of lettuce and zucchini in supermarkets across Britain highlighted the advantages of globalization. Although some might have been tempted by the idea of returning to homegrown spinach and Brussels sprouts and the ubiquitous apple, most people pleaded for the return of a glorious choice of fruit and vegetables. The scarcity of lettuce and courgette was simply due to bad weather in Spain and Italy. However, the global horticulture supply chains are among the marvels of our time and in a matter of a few days lettuces were back in the supermarkets. Efficient transport offers diversity of supply and food security. If Britons can enjoy a healthy salad every day, they should be grateful to the globalization of food.
“The Globalization of Inequality” has been written for the layman and it remains one of the best books on the subject.
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‘The Globalization of Inequality’ — a primer for the layman
‘The Globalization of Inequality’ — a primer for the layman
Book Review: ‘When Women Were Birds’ by Terry Tempest Williams
Part memoir, part loving tribute, “When Women Were Birds” is Terry Tempest Williams’ exploration of her mother’s legacy, and its influence on her own beliefs and values.
The book begins with a conversation between the two that took place a week before the death of her mother, the matriarch of a large Mormon clan in northern Utah.
This exchange includes a revelation — and an odd request: “I am leaving you all my journals, but you must promise me you won’t look at them until after I’m gone.”
It was a shock to Williams to discover that her mother had kept journals. But an even bigger surprise comes when she finds out what the three shelves of personal records contain.
When Williams pulls out the journals, she finds the pages of the first blank. The second and third journals are also empty.
She soon discovers all of the journals were left entirely blank.
The question is: What does this haunting gesture mean? What was her mother trying to say? Does silence have a voice?
Williams details her own memories of her mother, while pondering the meaning of the blank pages. The result is a memoir filled with words that were never spoken, sentences that were never communicated, and narratives that were never shared.
The book opens with a poetic description of her mother’s final days.
“It was January, and the ruthless clamp of cold down on us outside. Yet inside, Mother’s tenderness and clarity of mind carried its own warmth. She was dying in the same way she was living, consciously,” the first page reads.
The author also reflects on her own faith, and contemplates the notion of absence and presence.
This is not the first time that Williams has written about her mother. In an earlier memoir, “Refuge,” she suggests that the Mormon matriarch may have developed cancer as a result of nuclear testing nearby.
What We Are Reading Today: How to Make Money: An Ancient Guide to Wealth Management
Translated by Luca Grillo
Ancient Romans liked money. But how did they make a living and sometimes even become rich? The Roman economy was dominated by agriculture, but it was surprisingly modern in many ways: The Romans had companies with CEOs, shareholders, and detailed contracts regulated by meticulous laws; systems of banking and
taxation; and a wide range of occupations, from merchant and doctor to architect and teacher. The Romans also enjoyed a relatively open society, where some could start from the bottom, work, invest, and grow rich.
How to Make Money gathers a wide variety of ancient writings that show how Romans thought about, made, invested, spent, lost, and gave away money.
The Roman elite idealized farming and service to the state but treated many other occupations with suspicion or contempt, from money lending to wage labor. But whatever their attitudes, pecunia made the Roman world go round. In the Satyricon, Trimalchio brags about his wealth. Seneca accumulated a fortune—but taught that money can’t buy happiness. Eumachia inherited a brick factory from her father, married well, and turned to philanthropy after she was widowed. How to Make Money also takes up some of the most troubling aspects of the Roman economy, slavery and prostitution, which the elite deemed unrespectable but often profited from.
Featuring lively new translations, an illuminating introduction, and the original Latin and Greek texts on facing pages, How to Make Money offers a revealing look at the Roman worlds of work and money.
What We Are Reading Today: Polis
Author: Johan Ma
The Greek polis, or city-state, was a resilient and adaptable political institution founded on the principles of citizenship, freedom, and equality.
Emerging around 650 BCE and enduring to 350 CE, it offered a means for collaboration among fellow city-states and social bargaining between a community and its elites — but at what cost?
Polis proposes a panoramic account of the ancient Greek city-state, its diverse forms, and enduring characteristics over the span of a millenniu.
What We Are Reading Today: Long Haul
Author: Frank Figliuzzi
Frank Figliuzzi’s “Long Haul” is a shocking journey to the dark side of America’s highways, revealing the FBI’s Highway Serial Killings Initiative’s hunt for long-haul truckers who account for 850 murders across the nation.
The book is a gripping exploration of a violent, disordered world hiding in plain sight, and the heroes racing to end the horror. It will forever unsettle how you travel on the road.
Review: ‘Returnal’ is a thoughtful sci-fi adventure
LONDON: Right from the start, before you even take control of Selene Vassos, a reconnaissance scout who has crash-landed on a prohibited and mysterious planet, you are warned that “Returnal” (available originally for PS5 but now PC too) is “intended to be a challenging experience.”
Such difficulty may deter the casual gamer used to a steady progression of character and exploration through a game environment.
However, “Returnal” is a thoughtful and rewarding adventure that claims much originality of thought in its setup. The key theme is that when you die, you return — but not to the same environment you were in before. Instead, each new cycle poses new challenges and progress can only be made by unlocking upgrades.
Selene herself is a professional, unfazed character who does not appear too bothered when she soon comes across the body of her former self, who died in this strange world where the laws of physics and time seem not to apply. Staying alive is crucial, particularly as it allows her to retain better weapons for longer. In addition, avoiding damage allows for boosts of agility, vision and more, making for an overall more lethal Selene.
The environment is varied and of course surprising with each incarnation, and the weapons on offer come complete with a range of exciting alternative fire mechanisms such as homing missiles or lasers. A hostile environment where even plants are a threat to life is mitigated by your technology, which you can improve despite the reset of deaths through fancy smart “xeno-tech” that becomes integrated with alien kit left around.
There is a paradox in “Returnal” described by Selene herself: She is trapped in an environment that is “always the same, always changing,” and players must be patient in the early chapters as they get used to the sapping dynamic of death and return.
Once that makes more sense, the loneliness of both her alien environment and the impossibility of even dying to escape it make for a pretty special atmosphere that a smart-shooting engine then complements.
