The economist who has done more in this field than anyone else, Branko Milanović, has a wonderful graph that illustrates the point about the relative outcomes for life in the developing and developed world. The graph is the centrepiece of his brilliant book Global Inequality: A New Approach for the Age of Globalisation.† It’s called the ‘elephant curve’ because it looks like an elephant, going up from left to right like the elephant’s back, then sloping down as it gets towards its face, then going sharply upwards again when it reaches the end of its trunk. Most of the people between points A and B are the working classes and middle classes of the developed world. In other words, the global poor have been getting consistently better off over the last decades whereas the previous global middle class, most of whom are in the developed world, have seen relative decline. The elite at the top have of course been doing better than ever.
What if the governments of the developed world turned to their electorates and explicitly said this was the deal? The pitch might go something like this: we’re living in a competitive global system, there are billions of desperately poor people in the world, and in order for their standards of living to improve, ours will have to decline in relative terms. Perhaps we should accept that on moral grounds: we’ve been rich enough for long enough to be able to share some of the proceeds of prosperity with our brothers and sisters. I think I know what the answer would be. The answer would be OK, fine, but get rid of the trunk. Because if we are experiencing a relative decline why shouldn’t the rich – why shouldn’t the one per cent – be slightly worse off in the same way that we are slightly worse off?