It was interesting to read a book on Globalization or should I say Global inequality in post-brexit, trump world. Globalization is the invisible force which affects our income, employment prospect, knowledge and our cost of living. The gain of globalization will be unevenly distributed.
Global inequality = Sum of all national inequalities + Sum of all gap in mean incomes among countries
According Branko Milanovic, we will continue to the below trends due to globalization.
1. Rise of the “global middle class” whom are mostly located in china and other countries in “resurgent Asia”
2. The stagnation of the groups in the rich countries that are gloablly well-off but nationally middle or lower middle class.
3. Emergence of global plutocracy.
Effects on Rich countries:
1. Top earners will make more money from cheap labors.
2. Middle class will squeeze by automation and globalization.
3. Continued polarization of the western world. Populism and Nativism will grow in Europe and US will become plutocratic society.
4. National accounts will becomes less relevant and monetary policies will not be conducted by states. (private monies such as Bitcoin may play a bigger role.)
Effects on Resurgent countries:
1. Although the globally inequality is decrease, there will be increase in income inequality with countries. In some years, there will not be rich Americans and poor Chinese. Instead there will be rich Americans and poor Americans, rich Chinese and poor Chinese, rich Russians and poor Russians.
2. Horizontal inequality will not be solved by providing existential equality(policy followed in countries like India). Instead resurgent countries should focus on income inequality.
Effects on Individuals:
1. People with scalable jobs will be the real winner of globalization. In these jobs where a person’s same unit of labor can be sold many times.
2. Chance and family background will play a much bigger role than ever before.
Recommend that you give Global inequality a read to understand the present and the future better.