------ EH.NET BOOK REVIEW ------
Title: The Haves and the Have-Nots: A Brief and Idiosyncratic History of
Global Inequality
Published by EH.NET (December 2011)
Branko Milanovic, /The Haves and the Have-Nots: A Brief and Idiosyncratic
History of Global Inequality/. New York: Basic Books, 2011. xiv + 258 pp. $28
(hardcover), ISBN: 978-0-465-01974-8.
Reviewed for EH.Net by Thomas N. Maloney, Department of Economics, University
of Utah.
With the emergence of the “Occupy” movement in the Fall of 2011, the
issue of income inequality has gained an unusually prominent place in the
political conversation in the United States. The discussion of inequality
has always been present to some degree, especially during the past 30 years
or so as inequality has grown by a variety of measures. Still, the American
public lately appears to be engaged with issues of distribution in a newly
vigorous, if not always rigorous, way.
Branko Milanovic’s “idiosyncratic history of global inequality” has
thus appeared at a propitious moment. In this book, Milanovic (an economist
at the University of Maryland and the World Bank) combines three primary
essays on income inequality with a series of brief “vignettes” designed
to illustrate and expand on some of the issues raised in the primary
essays. This structure is perhaps not best suited to a straight
read-through but rather invites some “grazing” by the reader, so that
someone attracted to a five-page piece entitled “Who Was the Richest Person
Ever?” might become curious enough to take on the more meaty material.
The book is not aimed primarily at those with a professional background in
these topics, though it might provide a few new insights even for them, and
it will almost certainly provide some useful new examples for classroom
discussion.
The first essay, “Unequal People – Inequality among Individuals within a
Nation,” introduces various methods for measuring inequality across persons
or households within a nation and documents long-run changes in these
measures. It also briefly examines the effect of growth on inequality as
well as the effect of inequality on growth. In addition, it provides a
provocative discussion of the relationship between inequality and well-being
and about what degree of inequality (if any) is harmful enough to justify
some intervention by government. Here, Milanovic draws on the work of
Atkinson, Edgeworth, Sen, Pareto, and Rawls.
The second essay, “Unequal Nations – Inequality Among Countries in the
World,” shifts the focus to differences between average incomes, or between
overall income distributions, across political entities. Again, Milanovic
attempts to provide some intuition about important aspects of measurement,
here devoting a good deal of discussion to the meaning of “purchasing power
parity.” He then documents broad increases in inequality between nations
and considers why this increasing divergence has occurred in the face of
greater global economic integration, which might be expected to produce some
convergence in incomes.
The final essay, “Unequal World – Inequality among Citizens in the
World,” treats the population of the globe as one income distribution and
examines changes in that distribution over time. The historical window of
observation here is much more limited than in the first two essays, as
individual or household level income data for a range of countries sufficient
for examining the global distribution have been available only since the
1980s. Milanovic argues that inequality by this “global individual
distribution” measure probably has not changed much over the past 30 years
because broad increases in between- country and within-country inequality
have been offset by income growth in India and China (which weigh heavily in
the global distribution).
Each of these three essays is followed by several short “vignettes” which
are used mainly to illustrate concepts introduced in the longer essays.
Some of these are relatively breezy – for instance, Vignette 1.1,
“Romance and Riches,” tries to place the characters from Jane Austen’s
/Pride and Prejudice/ into the late twentieth century income distribution.
Others take on weightier topics (e.g., Vignette 2.7, “Did the World Become
More Unequal during Deglobalization?”). Despite this variety, there are
some common themes that run through several of these short pieces and the
longer essays.
One recurring theme considers how we define inequality, why we care about it,
and how those definitions and priorities change over time. While Ricardo
and Marx discussed income distribution mainly in terms of aggregate shares
flowing to different classes (landowners, capitalists, and workers), the
advent of marginalism, along with the development of individual- and
household-level social statistics, shifted attention to these smaller units
and away from sectoral or class aggregates. Inequality between nations was
not of much interest prior to the industrial revolution, when average incomes
were fairly near subsistence in most countries and so variation in averages
across countries was rather limited. Industrialization and unprecedented
rates of growth in some countries widened these gaps considerably and
prompted questions about the sources of these aggregate differences. The
study of a global individual-level distribution is dependent both on the
development of individual-level statistics in a sufficient number of
countries and also on the process of globalization itself, which exposes
people to conditions in a greater variety of places and provokes curiosity
about the scale and sources of individual-level income differences across the
globe.
A second recurring theme is the growing importance of geographic dimensions
of inequality, both within and between countries, and the potential
consequences of this phenomenon. In Vignette 1.8, Milanovic describes how
substantial differences in mean incomes across regions in the USSR and in
Yugoslavia generated political tensions which made it harder to hold those
countries together. He draws lessons from this history in speculating about
the potential future of China in Vignette 1.9 and of the European Union in
Vignette 3.3. He also focuses (in Vignette 2.4) on growing geographic
differences in mean incomes as a source of large and challenging migration
flows, especially in places where nations with very different mean incomes
are physically proximate, as in the cases of the U.S. and Mexico, Albania and
Greece, Indonesia and Malaysia, and Morocco and Spain.
In his preface, Milanovic says that he is concerned that public discussion of
inequality is often stifled by invoking the notion that it is the
“natural” outcome of “the market” and so cannot be usefully
questioned or altered. Given that concern, it is somewhat surprising that
there is little detailed examination of the causes of inequality in this
brief book. The focus instead is on documentation of the broad patterns,
along with a very engaging discussion of what various thinkers have said
about the moral and ethical dimensions of inequality. Milanovic does
provide a lengthy list of suggested readings which should allow those
interested to examine the causes of inequality in greater detail on their
own.
/The Haves and the Have-Nots/ is an enjoyable read which helps us see the
ubiquitous phenomenon of inequality in new ways. It is generally quite
accessible and could be used as a supplementary text in courses on labor
economics or on income distribution, though some students will require
guidance through the more technical sections.
Thomas N. Maloney is Professor and Chair in the Department of Economics and
Director of the Barbara L. and Norman C. Tanner Center for Nonviolent Human
Rights Advocacy at the University of Utah. He is the co-author, along with
Nathaniel Cline, of “Inequality in Economic History,” forthcoming in R.
Whaples and R. Parker, editors, /The Routledge Handbook of Modern Economic
History/.
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([log in to unmask]). Published by EH.Net (December 2011). All EH.Net
reviews are archived at http://www.eh.net/BookReview.
Geographic Location: General, International, or Comparative
Subject: Income and Wealth
Time: General or Comparative
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