Studving? Economist. com oPINION Global economic inequality More or less equal? From The Economist print edition 通剧事 Is economic inequality around the world getting better or worse? CRITICS of capita lism are convinced that the gap between rich and poor is widening across the world For them the claim amounts almost to an article of faith: worsening inequality is a sure sign of the moral bankruptcy of the system". Whether rising inequality should in fact be seen reasons to doubt it. But it would also be interesting to know the answer to the narrow factly o as condemning capitalism in this way is a question worth addressing in its own right. there al question Is the familiar claim that capitalism makes global inequality worse actually true? Unfortunately, this apparently straightforward question turns out to be harder to answer than Dle, espouppose. There are three broad areas of difficulty. The first is measuring what people, especially the poorest people in developing countries, consume. The second is valuing consumption in a way that allows useful comparisons to be made across countries and over time. And the third in effect is settling on an appropriate basis of comparison. Which matters more, for instance: whether inequality is widening among nations or whether inequality is widening among all the people of the world regardless of which country they happen to live in? Judging any claim about global inequality is impossible without a clear understanding of how the researchers concerned have dealt with all three questions The third deserves to be emphasised at the outset. a thought-experiment reveals how easy it is to get muddled Suppose it is true that inequality measured across countries is widening .(In other words, the gap between average incomes in the richest countries and average incomes in the poorest countries, measured without regard to changes in population is growing Also suppose that inequality is worsening within every individual country. Given that cross-countryGlobal economic inequality More or less equal? Mar 11th 2004 From The Economist print edition Is economic inequality around the world getting better or worse? CRITICS of capitalism are convinced that the gap between rich and poor is widening across the world. For them, the claim amounts almost to an article of faith: worsening inequality is a sure sign of the moral bankruptcy of “the system”. Whether rising inequality should in fact be seen as condemning capitalism in this way is a question worth addressing in its own right. There are reasons to doubt it. But it would also be interesting to know the answer to the narrow factual question. Is the familiar claim that capitalism makes global inequality worse actually true? Unfortunately, this apparently straightforward question turns out to be harder to answer than one might suppose. There are three broad areas of difficulty. The first is measuring what people, especially the poorest people in developing countries, consume. The second is valuing consumption in a way that allows useful comparisons to be made across countries and over time. And the third, in effect, is settling on an appropriate basis of comparison. Which matters more, for instance: whether inequality is widening among nations, or whether inequality is widening among all the people of the world, regardless of which country they happen to live in? Judging any claim about global inequality is impossible without a clear understanding of how the researchers concerned have dealt with all three questions. The third deserves to be emphasised at the outset. A thought-experiment reveals how easy it is to get muddled. Suppose it is true that inequality measured across countries is widening. (In other words, the gap between average incomes in the richest countries and average incomes in the poorest countries, measured without regard to changes in population, is growing.) Also suppose that inequality is worsening within every individual country. Given that cross-country Panos