[PEN-L:33663] Re: Measuring global inequality

[Chris Burford <cburford@xxxxxxxxxx>]

At 08/01/03 11:11 -0500, you wrote:
> Branko gave a nice seminar at EPI.  I commend his
> work to all.  I would say it's a definitive survey
> of what we know and don't know about world inequality.
> You should be able to find some on the WB web site.
>
> mbs


I can see that Branko Milanovic is an impassioned critic of the "Washington
Consensus" and uses empirical data to label it as ideology.

But the limits of a purely empirical appoach are illustrated in the
previous article in this thread. It is not possible to choose between
different statistical ways of simplifying the data without some theory as
to what we are looking at. Nor to interpret the apparent anomalies.

I would like to see what data on median rather than average income looks
like. But basically I would have thought we want to look at data on what is
value of unskilled and semi-skilled labour power in different countries.
That is the local price of manual labour, and say, a taxi-driver related to
the costs of daily living in that currency.

On the other hand we also need some handle on how the total mass of capital
in one country compares with that in another. Capital accumulates unevenly.

Yes GDP per capital may disguise these questions. I see the merit of
Milanovic's approach of looking at inequality across the globe, without
averaging it out in individual countries. But how are countries like India
or China to retain any accumulated surplus without allowing growth of
internal inequality? The obvious answer in the case of China would have
been to maintain socialism - if that would have adequately fostered the
competitive development of its productive forces.  There are some signs now
that China as a regional economic power is getting some leverage, even if
its methods are not progressive.

Milanovic is probably right that globally inequality is growing, but what
is his implicit answer?

Chris Burford

London