Global inequality: Do we really live in a one-hump world?
There is a powerful infographic that has been circulating on social media for a couple of years now. It illustrates a dramatic transformation from a “two hump world” in 1975 to a “one hump world” today. It was created by Hans Rosling and Gapminder, and has been reproduced and circulated by Max Roser and Our World in Data. Take a look:
It is an astonishing image. In his post on inequality, Roser uses this graph to conclude: “The poorer countries have caught up, and world income inequality has declined.” Hans Rosling went further, saying that thinking about the world in terms of North and South is no longer a useful lens, as the South has caught up to the North. Bill Gates has used the graph to claim that “the world is no longer separated between the West and the Rest.” Steven Pinker leveraged it for the same purpose in his book Enlightenment Now. And Duncan Green recently wrote that income inequality is no longer about a divide between nations or regions of the world, but rather between social groups within the global population as a whole.
Indeed, the graph gives the impression that all of the world’s people are basically in the same income bubble: whether you’re in Europe, Asia or the Americas, we’re all in the same hump, with a smooth, normal distribution. Clearly globalization has abolished that old colonial divide between North and South, and has worked nicely in favour of the majority of the world’s population. Right?
Well, not quite. In fact, this impression is exactly the opposite of what is actually happening in the world.
There are a few things about this graph that we need to keep in mind:
First of all, the x axis is laid out on a logarithmic scale. This has the effect of cramming the incomes of the rich into the same visual space as the incomes of the poor. If laid out on a linear scale, we would see that in reality the bulk of the world’s population is pressed way over to the left, while a long tail of rich people whips out to the right, with people in the global North capturing virtually all of the income above $30 per day. It’s a very different picture indeed.
Second, the income figures are adjusted for PPP. Comparing the incomes of rich people and poor people in PPP terms is problematic because PPP is known to overstate the purchasing power of the poor vis-a-vis the rich (basically because the poor consume a range of goods that are under-represented in PPP calculations, as economists like Ha-Joon Chang and Sanjay Reddy have pointed out). This approach may work for measuring something like poverty, or access to consumption, but it doesn’t make sense to use it for assessing the distribution of income generated by the global economy each year. For this, we need to use constant dollars.
Third, the countries in the graph are grouped by world region: Europe, Asia and the Pacific, North and South America, Africa. The problem with this grouping is that it tells us nothing about “North and South”. Global North countries like Australia, New Zealand and Japan are included in Asia and Pacific, while the Americas include the US and Canada right alongside Haiti and Belize. If we want to know whether the North-South divide still exists, we need a grouping that will actually serve that end.
So what happens if we look at the data differently? Divide the world’s countries between global South and global North, use constant dollars instead of PPP, and set it out on a linear axis rather than a logarithmic one. Here’s what it looks like. The circle sizes represent population, and the x axis is average income (graphics developed by Huzaifa Zoomkawala; click through for more detail):
Suddenly the story changes completely. We see that while per capita income has indeed increased in the global South, the global North has captured the vast majority of new income generated by global growth since 1960. As a result, the income gap between the average person in the North and the average person in the South has nearly quadrupled in size, going from $9,000 in 1960 to $35,000 today.
In other words, there has been no “catch up”, no “convergence”. On the contrary, what’s happening is divergence, big time.
This is not to say that Rosling and Roser’s hump graphs are wrong. They tell us important things about how world demographics have changed. But they certainly cannot be used to conclude that poor countries have “caught up”, or that the North-South divide no longer exists, or that income inequality between nations doesn’t matter anymore. Indeed, quite the opposite is true.
Why is this happening? Because, as I explain in The Divide, the global economy has been organized to facilitate the North’s access to cheap labour, raw materials, and captive markets in the South - today just as during the colonial period. Sure, some important things have obviously changed. But the countries of the North still control a vastly disproportionate share of voting power in the World Bank and the IMF, the institutions that control the rules of the global economy. They control a disproportionate share of bargaining power in the World Trade Organization. They wield leverage over the economic policy of poorer countries through debt. They control the majority of the world’s secrecy jurisdictions, which enable multinational companies to extract untaxed profits out of the South. They retain the ability to topple foreign governments whose economic policies they don’t like, and occupy countries they consider to be strategic in terms of resources and geography.
These geopolitical power imbalances sustain and reproduce a global class divide that has worsened since the end of colonialism. This injustice is conveniently elided by the one-hump graph, which offers a misleadingly rosy narrative about what has happened over the past half century.
A lot has changed in the Italian city of Florence in the roughly 700 years since the 1427 #census, but a striking new paper from Guglielmo #Barone and Sauro #Mocetti shows that one thing has changed less than you might think — the genealogical composition of who is rich and who is not.
Conventional #studies of #economic #mobility generally look at the change across one generation — typically comparing the #incomes of fathers and their sons. These studies show that mobility varies significantly from #country to country, with a relatively low 0.2 percent elasticity of income in the Nordic countries and a relatively high 0.5 percent elasticity of income in places like the #UK, the #US, and Italy. An elasticity of (...)
African economies and the lack of a targeted industrial policy
In terms of economic development, most African countries are operating below the least developed country income threshold of $1,035 per person. While developing countries in East Asia, most importantly China, have been lifting millions of people out of poverty at break-neck speed, #Africa’s poverty rate has barely budged. In 2011, 69.5% of people in sub-Saharan Africa […]
The protest #tradition of Maputo’s masked Mapiko dancers
Signs of #Mozambique’s booming economy on the one hand and rising inequality on the other can be noticed all over the country. Now even the welfare of those who have fought for.....
Art (#music) is a #business – and, yes, artists have to make difficult, honest business decisions | Amanda Palmer | Comment is free | theguardian.com
#Jack_Conte, one-half of the indie duo #Pomplamoose, is confronting this paradox the hard way in the wake of his recent post on Medium in which he lays bare the nuts, bolts, nets and grosses of his group’s 24-show American tour. Pomplamoose decided to pull out most of the stops and hire a full crew (sound, lights, tour manager, merch person), spare few expenses (buying new lights and road cases for their gear), and they freely admitted to considering the undertaking an investment in their future as a touring band. They lost about $12,000 after grossing a total of $136,000. I looked at that and barely blinked.
Metaphorically, the band didn’t even fly first class, but that didn’t stop armchair critics from complaining that Pomplamoose didn’t deserve to get on the plane to begin with, those plane-taking wankers. And there are those angry at Pomplamoose’s abilty to absorb a #loss-leading #tour because they’re making enough #sustainable #income through their #pledge-per-song system on #Patreon (a platform Conte started 2 years ago, because no #online system existed for #YouTube-star bands to convert millions of views into actual revenue). But he could afford to the lose the money! some musicians complained. This isn’t a fair representation of middle class touring at all!, others wrote. The indie bands who’d toured in vans, slept on floors, and had nothing but chips and salsa on their riders said things like These guys spent their money like idiots!
The critics are partially correct: Conte’s accounting is not how they’ve toured, or might tour if given the same budget. But it is how Pomplamoose chose to tour: at a loss, and as an investment. If there was any naiveté in Jack’s post, it wasn’t in how the band spent their money but rather in his assumption that a compassionate universe was ready to accept his transparency as an important contribution to the music information economy instead of a mercenary gimmick promoting his own cause.
But losing money on a mid-level tour is more common than anyone apparently thinks – it’s just that there are few artists masochistic enough to put the information transparently into the public domain.
When The Dresden Dolls were invited to open up for Nine Inch Nails’ summer tour in 2005, we were ecstatic. We were offered $500 per show to perform about six shows a week. We had to hire a tour bus and driver (no amount of sleeping-in-the-van or cheap flights could match the speed of the NIN caravan), and we had to hire our own sound guy. I have not, until now, written about the huge loss we took on that tour, nor would I ever criticize Trent Reznor for not offering us a “living wage”. He made the offer; we didn’t have to take it. To this day, I still meet people who discovered my music because of that tour: they became fans, they supported my Kickstarter, they come to my shows, they bought my book. We figured we’d make it back when we went back on our own tour as headliners. And …we did.
Risk-based investing exists everywhere but the arts (and, one could argue, in the non-profit world), where it is considered absolutely déclassé. In the tech industry – and the restaurant industry, or any industry, really – it is considered necessary to spend, experiment, fail, struggle, borrow capital and ultimately find a healthy balance between expenditure and income. Wired’s Erika Hall recently even wrote of the tech world that “Somewhere along the way, it got to be uncool to reduce one’s risk of failure.”
Perhaps the stickiest problem when comparing art and business is that the definition of “success” becomes muddied when you opt for a career in music. On the one hand, you’re told you haven’t “made it” until you’re a megastar – making a living at your art isn’t enough – and, on the other hand, musicians aren’t supposed to be concerned with profits if they’re “real” artists – Didn’t you get into this job just for the love of it?
I launched my now-infamous #Kickstarter for my own album, tour and art book in 2012 and, while it grossed over $1.2m, it netted – when all was said and done – close to zero. I actually chose to run the Kickstarter as a loss leader: I wanted to impress my fans, and the critics of crowdfunding who I knew were going to judge and criticize me - and the project - no matter what. I deliberately used high-end, expensive packages when manufacturing the CD-books, the vinyl, the hand-painted record players and art-books I’d convinced 25,000 people to #pre-purchase. I even wound up chronicling my projected budget. Why? Because there was a bizarre impression that I’d somehow been handed a million-dollar check and was going to spend my year languishing in a swimming pool filled with hundred dollar bills. But I hadn’t: like a shoe store, or a restaurant, I was running a business with the obligatory expenses, like a full staff on payroll, a shop to rent, and a million dollars worth of pre-ordered shoes to design, inspect, manufacture and mail out to my customers.
Meanwhile, even as I was only breaking even on the Kickstarter with an optimistic vision of future earnings (which did eventually manifest as a larger fanbase, more profitable tours, and a book advance), I got widely raked over the coals in the media for not paying fans who’d volunteered to come to my show and play with me and the band for two or three songs in exchange for tickets, backstage beers and hugs. This wasn’t my salaried band or crew we’re talking about – these were local sax and violin players showing up for an impromptu jam session that lasted one evening. I’d been doing these sorts of trades for years and they’d worked out just fine for everyone, until people got the sense that I was a millionaire (or, at least the wife of one) running a rock’n’roll sweat shop.
The irony? Some of the exact same journalists and bloggers are now lambasting Jack Conte for paying the professional musicians he hired to toured with Pomplamoose (which is usually a two-person band that use loops to fill out their sound). Will Stevenson, a band manager himself, asked in the Alternative Press: “But why would the rest of you and your band need salaries? If you aren’t making the money, why would you pay it out to people?”
The backlash (Amanda, pay your volunteers! Jack, don’t pay your band!) is laughable, but it speaks volumes about the double standards with which the world tackles the #music_industry: you’re damned if you play by the rules, and you’re damned if you find a creative way to thwart them. We – Taylor Swift, Trent Reznor, Zoe Keating, Pomplamoose, U2, Radiohead, me – are all just trying to find a way to create and monetize our creations at the same time.
And if there are going to be a million new paths to sustainability for a million different artists, we’d best stop bickering amongst ourselves about the validity of each and every path these artists are stumbling down – or at least step out of the way if we can’t lend a hand.
• This article was amended on 14 December 2014 to clarify that Mick Jagger attended, but did not graduate from, the London School Of Economics.
Heller study finds racial wealth gap has quadrupled since mid-1980s | BrandeisNOW
The wealth gap between white and African-American families increased more than four times between 1984-2007, and middle-income white households now own far more wealth than high-income African Americans, according to an analysis released by the Institute on Assets and Social Policy (IASP) at Brandeis University.