Who are the Winners and Losers of Globalization?

Summary

The video script discusses the evolution of globalization and its impact on economic growth and inequality. It highlights a significant shift in the late 1700s-early 1800s, leading to a surge in quality of life in Western Europe and North America. The 'elephant chart' by economist Branko Milanovic is used to illustrate the winners and losers since the 1980s. Point A represents the rising middle class in Asia, particularly in India and China, who have experienced significant improvements in living standards. Point B depicts the working class in rich countries like Japan, Germany, and the U.S., who, despite earning more than the global average, have seen no income growth, making them the relative losers. This has fueled right-wing populism and protectionist sentiments. Point C focuses on the global 1 percent, whose incomes have dramatically increased, leading to left-wing populism and movements like Occupy Wall Street. The script warns of the political consequences of not addressing wealth distribution and inequality.

Takeaways

• 🌍 The movement of goods, services, money, people, and ideas across national borders is a key aspect of globalization.
• 📈 Prior to the late 1700s-early 1800s, global economic growth was relatively flat, with a significant surge occurring afterwards.
• 💡 The quality of life in Western Europe and North America improved remarkably, while the rest of the world did not experience the same growth initially.
• 🐘 The 'Elephant Chart' by Branko Milanovic illustrates global inequality and the winners and losers since the late 1980s.
• 🇨🇳 Point A on the Elephant Chart represents the rising middle class in emerging economies, particularly in Asia, who have experienced significant improvements in living standards.
• 📉 Point B indicates the working class in rich countries like Japan, Germany, and the United States, who have seen little to no income growth.
• 🤔 The stagnation of income for the working class in rich countries has led to resentment towards emerging economies and immigrants, contributing to the rise of right-wing populism.
• 🧱 The phrase 'Build that wall!' symbolizes the sentiment of closing borders, which is a response to perceived economic threats from globalization.
• 💰 Point C on the Elephant Chart signifies the global 1 percent, whose incomes have seen a substantial increase, leading to left-wing populism movements like Occupy Wall Street.
• 👥 The super-rich are viewed with angst by those in the lower half of rich countries, reflecting a growing concern over wealth inequality.
• ⚠️ Experts have warned that if wealth distribution and inequality are not addressed, political upheaval is likely, which is now evident in the rise of populism on both the left and right.

Q & A

What does the term 'globalization' refer to in the context of the script?

Globalization refers to the movement of goods, services, money, people, and ideas across national borders, which has significantly impacted economic growth and the quality of life in different parts of the world.

Why was the economic growth relatively flat before the late 1700s-early 1800s?

The script does not provide a specific reason for the flat economic growth before the late 1700s-early 1800s, but it implies that a significant change or development post this period led to a surge in the quality of life, particularly in Western Europe and North America.

What is the 'elephant chart' and what does it represent?

The 'elephant chart' is a graphical representation developed by economist Branko Milanovic. It illustrates global inequality and shows the income distribution changes since the late 1980s, highlighting the winners and losers in the process of globalization.

What does point A on the elephant chart signify?

Point A represents the emerging economies and the rising middle class, predominantly in Asia. It signifies the improvement in living standards for people who have moved from rural areas to cities, gaining access to electricity, refrigeration, and better income.

Who are considered the 'relative losers' in the last generation according to point B on the elephant chart?

The 'relative losers' are the working class in rich countries like Japan, Germany, and the United States, specifically the lower half of these societies whose incomes have not improved despite still earning a fair amount compared to the rest of the world.

How does the perception of the working class in rich countries (point B) about the emerging economies (point A) contribute to political changes?

The perception that their losses have come at the expense of the emerging economies leads to dissatisfaction and fuels the rise of right-wing populism and protectionist policies, such as calls for building walls and raising barriers to immigration.

What group of people does point C on the elephant chart represent?

Point C represents the global 1 percent, the wealthiest individuals in the world, whose incomes have seen a significant surge during the period of globalization.

How does the rise in income for the global 1 percent (point C) affect public sentiment in rich countries?

The increased wealth of the global 1 percent has led to a sense of angst and resentment among the working class in rich countries (point B), which is reflected in social movements like Occupy Wall Street and political campaigns like that of Bernie Sanders.

What warning have experts been giving regarding the distribution of wealth and inequality?

Experts have been warning that if the issue of wealth distribution and inequality is not addressed, it could lead to significant political and social unrest, which the script suggests is already happening.

What is the relationship between the economic changes depicted in the elephant chart and the rise of populism?

The economic changes, particularly the stagnation of income for the working class in rich countries and the surge for the global 1 percent, have contributed to the rise of both right-wing and left-wing populism as reactions to perceived injustices and economic disparities.

How has globalization impacted the quality of life in Western Europe and North America compared to the rest of the world?

Globalization has led to a significant surge in the quality of life for people in Western Europe and North America, while the script suggests that not much happened in the rest of the world during the initial phase, leading to a widening economic gap.

What is the significance of the term 'globalization 2.0' in the script?

The term 'globalization 2.0' likely refers to a phase or version of globalization that is distinct from the earlier period mentioned. It is during this phase that the elephant chart becomes relevant, showing changes in global inequality and the rise of emerging economies.