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I think there are a couple of intertwined ideas in your comment. I wonder if your observations could be explained by decreases in the cost of food / increased f

I think there are a couple of intertwined ideas in your comment. I wonder if your observations could be explained by decreases in the cost of food / increased food distribution. Secondly, it's not clear whether wealth has improved for poor people (something I should take a look at...).

achompas 8y ago
It's well known that folks in the lower 70% of global income have seen significant growth. There's even a name for the plot - "the elephant chart." https://avc.com/2016/08/elephant-chart/ https://avc.com/2016/08/elephant-chart/ The chart, as I understand it (in limited reading), tracks three phenomenon: 1. Increasing wealth formation by more disadvantaged groups in non-first world countries (the "body" of the elephant). 2. Wealth stagnation for middle classes in first-world countries (the "dip" in the elephant's trunk). 3. Increasing returns to capital held by upper classes in first-world countries (the "trunk" of the elephant).
- mikk14 8y ago
  I think that the elephant chart can be misleading. A 100% growth of very little is still very little. I found this version [1] showing that, in absolute terms, the gaps are actually increasing. [1] https://patternsofmeaning.files.wordpress.com/2018/05/elephant-graph-from-skitch.jpg?w=863 https://patternsofmeaning.files.wordpress.com/2018/05/elepha...
  - aoeusnth1 8y ago
    Is a that very useful way of understanding growth? Without any change in the income distribution, everyone getting 1% richer would increase the absolute gap by 1%.
    - xg15 8y ago
      That seems about right. "Getting 1% richer" would imply something completely different for a billionaire than for a worker, so I don't see why it would be a useful measure.
      - aoeusnth1 8y ago
        Because economies growing or shrinking generally affects people proportional to their wealth (including human capital). To me, Gini curves seem far more effective for understanding the dynamics of inequality than looking at absolute differences, which largely change due to economic growth.
        xg15 8y ago
        Yes, that's true when talking about causes of a wealth gap, but this thread was about effects. A growing absolute wealth gap can still lead to reduced quality of life for lower-wealth groups - e.g. because prices rise faster than their incomes and so they effectively lose access to certain goods. It will also increase inequality and makes other economic measures (that rely on the mean) less reliable. Just because an effect is always present, doesn't mean you can ignore it, especially if doing so would flip the conclusion. Posting the elephant graph as an argument that all is going well would do exactly that.
    - mikk14 8y ago
      I'm not sure I understand this rebuttal, do you want to expand a bit? Everyone getting 1% richer would not affect the Gini nor the absolute gap, or at least not as much as you imply. So I must be missing something. In any case, you are not necessarily addressing my rebuttal of the elephant graph. What I'm saying is that the elephant graph is an interesting conversation starter, but, by itself, it does not convey enough information to make a conclusion about fairness. To make an extreme example, if I have literally $0 last year and I have $1 now, my growth rate in the elephant graph is infinitely higher than the richer 1%. I'm still going to starve to death, though. Absolutes matter.
      - aoeusnth1 8y ago
        But it would affect the absolute gap - everyone is proportionally richer, so the absolute gap is proportionally larger. My point is that knowing only the fact that "absolute inequality has increased" doesn't tell you anything about whether that's good or bad for the world. I agree that absolutes matter to the individual - but I personally think percentages are a better way of understanding and interpreting growth over time for most populations, because growth has historically been very consistently exponential.
  - yk 8y ago
    If I understand the graph correctly, the gap in absolute terms reduces, when the derivative of the (original) Elephant graph is negative, that is the gap between the lower half of the income distribution and the P50-60 (6th decile, something like $2k - $4k [0]) increases. And the gap between P80-90 ($8k-$14k, that's the lower third of the US population) and the top increases, while the gap between P50-60 and P80-90 decreases. [0] https://ourworldindata.org/global-economic-inequality https://ourworldindata.org/global-economic-inequality specifically from eyeballing https://ourworldindata.org/wp-content/uploads/2013/11/Global-Inc-Distribution-2003-and-2013-1.png https://ourworldindata.org/wp-content/uploads/2013/11/Global...
RyanZAG 8y ago
In terms of poverty, is there a difference between getting more wealth vs everything becoming cheaper? I don't think there is - your life has improved just the same either way. Fixating on silly numbers that ultimately mean nothing doesn't seem like a good way to make the world better. We should look at concrete things - and how often you can eat an orange is the kind of concrete thing that really matters.
- BrainInAJar 8y ago
  > In terms of poverty, is there a difference between getting more wealth vs everything becoming cheaper? Yes. The delta between the richest and poorest indicates a lot of things about a society.
  - RyanZAG 8y ago
    What does it indicate? You can go to a place like Mauritius where the delta is enormous, but everyone is pretty happy and the rich and poor mingle freely. Or you can have a place like France where the delta is far smaller, but the rich and poor detest each other and very rarely mingle.
    - adamsea 8y ago
      In 2014 The Gini coefficient for Mauritas was 30 and for France it was 40. The top 1% in France has about 20% of the total income as of 2014. For Mauritas no suitable data was found for wealth inequality or dispersion of earnings. The lack of good data for Mauritas makes a comparison between the two questionable. Plus even after looking at the numbers for these countries I would want to check out money laundering - if I recall, based on the Panama papers, a nontrivial amount of the 1% (probably more like the 0.1%s) wealth is laundered/hidden/dark. I don’t know if the studies here attempt to account for that or not. I would imagine money laundering is prevalent in France (or any major economy for that matter), possibly in Mauritas https://www.chartbookofeconomicinequality.com/inequality-by-country/mauritius/ https://www.chartbookofeconomicinequality.com/inequality-by-... https://www.chartbookofeconomicinequality.com/inequality-by-country/france/ https://www.chartbookofeconomicinequality.com/inequality-by-... Information on data sources here - https://www.chartbookofeconomicinequality.com/about/ https://www.chartbookofeconomicinequality.com/about/ As of 2018 the population of Mauritas is 1.26 million (via google search). The 2018 population of France is 65.23 million (via google search). The 2014 population probably was not radically different. I wonder if the size of the society in question matters here - is comparing a country to one 65 times larger than it useful? I did not look for data to validate the hypothesis that everyone is pretty happy in Mauritas as opposed to France.

achompas 8y ago

It's well known that folks in the lower 70% of global income have seen significant growth. There's even a name for the plot - "the elephant chart." https://avc.com/2016/08/elephant-chart/ https://avc.com/2016/08/elephant-chart/ The chart, as I understand it (in limited reading), tracks three phenomenon: 1. Increasing wealth formation by more disadvantaged groups in non-first world countries (the "body" of the elephant). 2. Wealth stagnation for middle classes in first-world countries (the "dip" in the elephant's trunk). 3. Increasing returns to capital held by upper classes in first-world countries (the "trunk" of the elephant).

mikk14 8y ago
I think that the elephant chart can be misleading. A 100% growth of very little is still very little. I found this version [1] showing that, in absolute terms, the gaps are actually increasing. [1] https://patternsofmeaning.files.wordpress.com/2018/05/elephant-graph-from-skitch.jpg?w=863 https://patternsofmeaning.files.wordpress.com/2018/05/elepha...
- aoeusnth1 8y ago
  Is a that very useful way of understanding growth? Without any change in the income distribution, everyone getting 1% richer would increase the absolute gap by 1%.
  - xg15 8y ago
    That seems about right. "Getting 1% richer" would imply something completely different for a billionaire than for a worker, so I don't see why it would be a useful measure.
    - aoeusnth1 8y ago
      Because economies growing or shrinking generally affects people proportional to their wealth (including human capital). To me, Gini curves seem far more effective for understanding the dynamics of inequality than looking at absolute differences, which largely change due to economic growth.
      - xg15 8y ago
        Yes, that's true when talking about causes of a wealth gap, but this thread was about effects. A growing absolute wealth gap can still lead to reduced quality of life for lower-wealth groups - e.g. because prices rise faster than their incomes and so they effectively lose access to certain goods. It will also increase inequality and makes other economic measures (that rely on the mean) less reliable. Just because an effect is always present, doesn't mean you can ignore it, especially if doing so would flip the conclusion. Posting the elephant graph as an argument that all is going well would do exactly that.
  - mikk14 8y ago
    I'm not sure I understand this rebuttal, do you want to expand a bit? Everyone getting 1% richer would not affect the Gini nor the absolute gap, or at least not as much as you imply. So I must be missing something. In any case, you are not necessarily addressing my rebuttal of the elephant graph. What I'm saying is that the elephant graph is an interesting conversation starter, but, by itself, it does not convey enough information to make a conclusion about fairness. To make an extreme example, if I have literally $0 last year and I have $1 now, my growth rate in the elephant graph is infinitely higher than the richer 1%. I'm still going to starve to death, though. Absolutes matter.
    - aoeusnth1 8y ago
      But it would affect the absolute gap - everyone is proportionally richer, so the absolute gap is proportionally larger. My point is that knowing only the fact that "absolute inequality has increased" doesn't tell you anything about whether that's good or bad for the world. I agree that absolutes matter to the individual - but I personally think percentages are a better way of understanding and interpreting growth over time for most populations, because growth has historically been very consistently exponential.
- yk 8y ago
  If I understand the graph correctly, the gap in absolute terms reduces, when the derivative of the (original) Elephant graph is negative, that is the gap between the lower half of the income distribution and the P50-60 (6th decile, something like $2k - $4k [0]) increases. And the gap between P80-90 ($8k-$14k, that's the lower third of the US population) and the top increases, while the gap between P50-60 and P80-90 decreases. [0] https://ourworldindata.org/global-economic-inequality https://ourworldindata.org/global-economic-inequality specifically from eyeballing https://ourworldindata.org/wp-content/uploads/2013/11/Global-Inc-Distribution-2003-and-2013-1.png https://ourworldindata.org/wp-content/uploads/2013/11/Global...

RyanZAG 8y ago

In terms of poverty, is there a difference between getting more wealth vs everything becoming cheaper? I don't think there is - your life has improved just the same either way. Fixating on silly numbers that ultimately mean nothing doesn't seem like a good way to make the world better. We should look at concrete things - and how often you can eat an orange is the kind of concrete thing that really matters.

BrainInAJar 8y ago
> In terms of poverty, is there a difference between getting more wealth vs everything becoming cheaper? Yes. The delta between the richest and poorest indicates a lot of things about a society.
- RyanZAG 8y ago
  What does it indicate? You can go to a place like Mauritius where the delta is enormous, but everyone is pretty happy and the rich and poor mingle freely. Or you can have a place like France where the delta is far smaller, but the rich and poor detest each other and very rarely mingle.
  - adamsea 8y ago
    In 2014 The Gini coefficient for Mauritas was 30 and for France it was 40. The top 1% in France has about 20% of the total income as of 2014. For Mauritas no suitable data was found for wealth inequality or dispersion of earnings. The lack of good data for Mauritas makes a comparison between the two questionable. Plus even after looking at the numbers for these countries I would want to check out money laundering - if I recall, based on the Panama papers, a nontrivial amount of the 1% (probably more like the 0.1%s) wealth is laundered/hidden/dark. I don’t know if the studies here attempt to account for that or not. I would imagine money laundering is prevalent in France (or any major economy for that matter), possibly in Mauritas https://www.chartbookofeconomicinequality.com/inequality-by-country/mauritius/ https://www.chartbookofeconomicinequality.com/inequality-by-... https://www.chartbookofeconomicinequality.com/inequality-by-country/france/ https://www.chartbookofeconomicinequality.com/inequality-by-... Information on data sources here - https://www.chartbookofeconomicinequality.com/about/ https://www.chartbookofeconomicinequality.com/about/ As of 2018 the population of Mauritas is 1.26 million (via google search). The 2018 population of France is 65.23 million (via google search). The 2014 population probably was not radically different. I wonder if the size of the society in question matters here - is comparing a country to one 65 times larger than it useful? I did not look for data to validate the hypothesis that everyone is pretty happy in Mauritas as opposed to France.