Remarks of Branko Milanovic
As Delivered at Notre Dame on April 25, 2023
What is global inequality? Technically, global inequality is inequality among all citizens of the world.
It is technically the same as if we were to update this rule and say what is the income inequality among us here? That is, income defined as after taxes over one year.
Technically, whether we take this room, this campus, the whole city, the whole state, the United States, or look globally — technically, it is the same.
However, it is much harder to do it for seven or eight billion people than for 100 people. But each individual is treated the same. You divide their household income by the number of people in the household and assign that income to everybody. You do that for the entire world.
Now, how do I get information for seven billion people? I get it from household surveys that are nationally representative of 130 countries, which cover about 95 percent of the world's GDP and about 90 percent of the global population.
So, global inequality is underestimated because 10 percent of the world's population from very poor countries is not generally included. They do not have income distribution data, mount and field surveys, and these people often live in regions at war.
The earliest income numbers are from 1820, and the underlying thing here is Maddison Project data on GDP per capita for many countries in the world, which are superimposed in distributions. What is striking is that if you look at the Gini index, which is a number that moves from zero (complete equality) to 100 (complete inequality). You see that in 1820, just after the Napoleonic Wars, it was about 55. Throughout the 19th century, it kept on rising. This is a critical point, and you will see why it really matters.
Then, it kept rising in the first half of the 20th century. There were, of course, setbacks from World War I and the Great Depression. But World War II and the creation of the Tripartite World is significant. ...