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ECONOMICS
Global Inequality Is Decreasing — But National Income Gaps Are Widening
The rich are finding ways to accumulate a larger share of wealth even though the global middle class is growing.
The narrative we have been sold about capitalism — that wealth from the top trickles down to everyone — is verifiably untrue. We have four decades of data to dispute the idea.
Simply put, capitalism can bring people out of poverty, particularly in large global markets, but cannot expand the international middle class.
Businesses look for the cheapest places around the world to situate themselves. There, they use local labor to produce goods or pay local taxes, even if that location is not where they do most of their business. They export products or services to the rest of the world, yet all the profits go to the select few that own businesses’ capital. The richest use profits to enlarge their businesses’ operations, expanding their hold on capital, and growing their wealth as a result.
Most developed countries are now experiencing populist movements because the global middle class hasn’t seen much economic growth under this…
