Chapter 13: The Great Levelling
These national trends will be what attract political attention. But from a global perspective, they will not be the main determinant of inequality. That is because the global distribution of income depends not just on the gaps within a country, but also on those between countries, in terms of average living standards. And over the coming decades the wealth gap between rich and poor countries will narrow dramatically as emerging economies grow faster than advanced ones. This will stand in stark contrast to the experience of the past 200 years, when richer countries in Europe and North America typically grew faster than poorer ones.
The narrowing of disparities between countries will be greater than any widening of disparities within countries. As a result, overall global inequality – the income gaps between all people, regardless of where they live – will fall, probably rather sharply. The coming decades will see a great levelling of global living standards. At the same time the nature of inequality will change. Today the gaps between the richest and poorest within any country are still far smaller than the gaps between countries. Around 70% of global income inequality comes from the fact that poor countries lag so far behind rich ones. By 2050 that picture will be quite different, with a large and growing global middle class coinciding with big income gaps within countries. Wealth disparities will depend less on where people live than on what they do.
Zanny Minton Beddoes is the Economics editor of The Economist.