Even Inequality is Unequal

Inequality. It’s on everyone’s mind these days, right? Well, an important new report on the subject shows us that the extent and implications of income disparity differ widely from one part of the world to another. That is to say, even inequality is unequal these days.


Three snapshots and three questions:

The United States is more unequal than Europe: In 1980, the top 1% of earners controlled just 10% of income on both sides of the Atlantic. Since then that share has ballooned to 20% in the US, while inching (ok, centimetering) up to just 12% in Europe.

Key question: Europe’s more progressive taxes and social safety nets dampen inequality. But does that safety net blunt the appeal of populist nationalism or does it intensify nationalists’ questions about who gets to take advantage of those benefits?

India is more unequal than China: The top 10% in India take home 55% of the country’s income. In China, the same group captures a somewhat more modest 41%. Why the difference? Rapid growth and urbanization in China have lifted hundreds of millions out of poverty since 1980, when the average Chinese and Indian had the same income. Today, nearly two-thirds of China lives in cities — two-thirds of Indians still live in the countryside.

Key question: China’s made a strong case for authoritarian development — pulling people out of poverty faster than democratic India. But can China’s authoritarian model continue to satisfy its people at higher and higher levels of income? And in the long run, does India’s democracy help or hinder sustainable growth?

Russia and the Middle East — The worst of both worlds: The average adult’s income hasn’t increased much since 1980 in Russia and the Middle East, while inequality has skyrocketed. Here’s an eye-popper: In Russia, the top 1% of earners have captured 69% of the country’s income growth since 1980.

Key question: For most petrostates, diversifying the economy means sacking entrenched elites and cronies. Lower oil prices may have increased the pressure on these governments to reform, but for the time being most of the focus is on balancing budgets rather than serious moves to diversify the economy (or the political sphere, for that matter.)

In Italy, stacks of plastic boxes in supermarkets and stores are not garbage - they are collected and reused, thanks to a consortium that specializes in recycling them for food storage. How do these "circular" plastic boxes help reduce energy consumption and carbon dioxide emissions?

Learn more in this episode of Eni's Energy SUPERFACTS series.

British economist Jim O'Neill says the global economy can bounce back right to where it was before, in a V-shaped recovery. But his argument is based on a lot of "ifs," plus comparisons to the 2008 recession and conditions in China and South Korea that may not truly apply. Ian Bremmer and Eurasia Group's Robert Kahn take issue with O'Neill's op-ed, on this edition of The Red Pen.

Today, we're taking our Red Pen to an article titled "A V-Shaped Recovery Could Still Happen." I'm not buying it. It's published recently by Project Syndicate, authored by British economist named Jim O'Neill. Jim O'Neill is very well known. He was chairman of Goldman Sachs Asset Management. He's the guy that coined the acronym BRICS, Brazil, Russia, India, China. So, no slouch. But as you know, we don't agree with everything out there. And this is the case. Brought to you by the letter V. We're taking sharp issue with the idea that recovery from all the economic devastation created by the coronavirus pandemic is going to happen quickly. That after the sharp drop that the world has experienced, everything bounces back to where it was before. That's the V. Economists around the world are debating how quickly recovery will happen to be sure. But we're not buying the V. Here's why. W-H-Y.

More Show less

Over the past few years, we've seen three major emerging powers take bold action to right what they say are historical wrongs.

First came Crimea. When the Kremlin decided in 2014 that Western powers were working against Russian interests in Ukraine, President Vladimir Putin ordered Russian troops to seize the Crimean Peninsula, which was then part of Ukraine. Moscow claimed that Crimea and its ethnic Russian majority had been part of the Russian Empire for centuries until a shameful deal in 1954 made Crimea part of the Ukrainian Soviet Republic. Americans and Europeans imposed sanctions on Russia. But Ukraine is not part of NATO or the EU, and no further action was taken.

More Show less

Nicholas Thompson, editor-in-chief of WIRED, provides his perspective on technology news:

Will the new audit of Facebook civil rights practices change the way the company operates?

Yes. It came under a lot of pressure from civil rights activists who organized an advertising boycott. And then an internal audit on Facebook's effect on civil rights came out. It was quite critical. Those two things, one after the other, will surely lead to changes at the company.

More Show less

The United States and the European Union have comparable population sizes, but their COVID-19 death toll trajectories have recently become very different. Since the beginning of July, the average number of both new fatalities and new deaths per 1 million people is rapidly increasing in the US while it remains mostly flat in the EU. We compare this to the average number of new cases each seven days in both regions, where the US trend continues upward but is not surging like the death toll. EU countries' robust public health systems and citizens' willingness to wear masks and maintain social distance could explain the disparity.