This is part of a series, ‘Economists Exchange’, featuring conversations between top FT commentators and leading economists
A chart first brought economist Branko Milanovic to worldwide attention. In 2013, the former World Bank economist and his colleague Christoph Lackner captured in a simple picture how global growth in two decades of rapid globalisation had accrued to different global income groups. This “elephant chart” showed that between 1988 and 2008, the large middle of the world’s income distribution had enjoyed strong income growth (the elephant’s raised back) but not the world’s very poorest (the sloping tail). What resonated most in rich countries was the low base of the elephant’s trunk, which illustrated that their middle classes had suffered income stagnation, and its high tip, which showed the outsized gain of the world’s very richest.
The chart seemed to make sense of the voter backlash that had won the UK’s Brexit referendum and the US’s election of Donald Trump. But it also helped to draw attention to a burgeoning field of inequality studies in economics, exemplified by the runaway success of Thomas Piketty’s Capital in the 21st Century. Milanovic, now a professor at City University of New York, has been a central contributor to inequality research. Originally from Serbia in the former Yugoslavia, he has among other things gathered and analysed data on inequality in the countries of the former eastern bloc.
He brings readers broader perspectives than most western economists — from his decades-long work on inequality to his latest book, Capitalism, Alone, which analysed the variants of capitalism, which he argues is now the only socio-economic system on offer from China to the US.
In this conversation, which was recorded before Russia’s invasion of Ukraine, he argues that globalisation is here to stay, but that the forces we have seen reduce global inequality while increasing it within individual countries, have ebbed….
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