The Haves and the Have‐Nots: A brief and idiosyncratic history of inequality around the globe
| Date | 01 May 2012 |
| Author | Jo Thori Lind |
| Published date | 01 May 2012 |
| DOI | http://doi.org/10.1111/j.1758-5899.2012.00185.x |
argues first that the decline of economic opportunity, the
weaknesses of social protection and the phenomenon of
jobless recovery in the American economy creates huge
pressures for the government to expand access to cheap
credit as a palliative measure.
Meanwhile, late developing economies, which have
maintained growth through exports, felt compelled to
invest their surpluses in the debt of their trading part-
ners rather than in their own underdeveloped domestic
sectors. This massive inflow of capital ended up fueling
the increasingly esoteric securities based on the mort-
gages generated by the expansion of access to credit, as
well as the expansionary monetary policy of the Federal
Reserve. Taken together, the individual behavior of these
diverse but individually rational actors constituted the
perfect storm that nearly capsized the world economy.
Rajan’s narrative knits together these different aspects
to a coherent whole to great effect, but there is real vir-
tuosity in some of the internal chapters, reflecting his
expertise as a finance economist and central banker,
more than others. In chapter five, for instance, he pro-
vides a nuanced and enlightening account of the per-
spectives and actions of the Fed leading up to the crisis.
Chapter seven, similarly, constitutes as a forceful and
articulate apologia for financial engineers that, while not
fully persuasive, represents careful thinking and parsing
from someone very much inside that world. Policy
prescriptions (chapters eight through ten) are the more
speculative elements of the book. In the main, they rep-
resent Rajan’s view that political representation, rather
than the internal structures or governance of ‘arm’s
length’ financial markets, is lacking in the response to
the crisis.
Adnan Naseemullah
Dr Adnan Naseemullah is Fellow in Comparative Politics
at the London School of Economics.
The Haves and the Have-Nots: A brief and idiosyncratic
history of inequality around the globe by Branko Mila-
novic. New York, NY: Basic Books, 2010. 246 pp., £16.99
hardcover, 978 0465019748.
Economic inequality is at the forefront of the research
agenda for economists and development studies aca-
demics, as well as other social scientists and practitio-
ners. Though challenging in terms of methodology and
statistics, the topic is inherently of interest to the less
technically inclined, and this is the gap World Bank econ-
omist Branko Milanovic attempts to bridge in this book.
The text is constructed around three essays containing
fairly pedagogical presentations of difficult material. Each
essay is followed by a number of vignettes, presenting
applications of the material.
The first third of the book is concerned with the stan-
dard question of measuring inequality between individu-
als or households within a single society. The vignettes
to this are amusing and unusual: we learn for instance
that Mr. Darcy of Pride and Prejudice was among the
richest 0.1 per cent of the British society of the time,
and that US mogul John D. Rockefeller was at least four
times as rich as Marcus Crassus, the richest person of the
Roman Empire. The vignettes illustrate both the chal-
lenges of comparing incomes across time and space and
how one should think about income distributions in
societies where data is limited.
The second essay discusses how we should compare
national incomes and study inequality between coun-
tries. These questions are important, but Milanovic
seems eager to get to his final topic, global inequality,
where we combine inequality within and between coun-
tries. This is a field where Milanovic has contributed sub-
stantially, being the first to construct measures of global
inequality based on pure survey data. This part of the
book provides a useful introduction to his approach, and
also contains discussions of where in the global income
distribution the poor in richer countries are located and
how poor the global middle class is; he concludes that
the poorest in the rich countries are located well above
the global middle class.
Measuring global inequality has been a major research
topic over the last 15 years, and not without its controver-
sies. Milanovic glosses over the ongoing debate between
himself and Xavier Sala-i-Martin regarding the appropriate
way to measure global inequality. Sala-i-Martin has
argued that the average income in society should add up
to GDP per capita, from which he discerns reduced global
poverty and a more equal distribution of income. Mila-
novic, basing his calculations strictly on household sur-
veys, has less optimistic findings. Although this debate is
technical and specialized, I believe it deserves more dis-
cussion in a book such as this.
Various professionals interested in inequality measure-
ment may also object that some methodological choices,
such as how to scale incomes by household size, are
made without further discussion. Yet ultimately the
omission of such discussions is appropriate, as it makes
the text accessible to a wide readership—which would
potentially consist of academics, practitioners, and the
interested non specialist, alike.
Jo Thori Lind
Jo Thori Lind is Associate Professor of Economics at the
University of Oslo, Norway.
Reviews
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ª2012 London School of Economics and Political Science and John Wiley & Sons Ltd. Global Policy (2012) 3:2
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