Globalization

It is my view that globalization is not the major cause of income inequality around the world. On the contrary, it is lifting standards of living almost everywhere. The emerging markets really started to emerge after the end of the Cold War. They benefitted from the integration of national economies through the proliferation of more trade. Most impressive is that while the value of the exports of the G7 industrial economies has increased 120% over the past 10 years, the value of exports of the rest of the world is up 275%. The share of G7 exports in total world trade is down from 50% during 1996 to 33% as of September 2011, while the share of the rest of the world has risen from 50% to 67% over this same period.

The main source of income inequality around the world is corruption. There are too many kleptocrats in too many countries who are gaming the system to swipe the gains from globalization. Many of the protestors around the world are specifically demonstrating against the corruption they see in their countries. If that leads to less corruption, that should mean that more people will continue to benefit from globalization and support it. (More for subscribers.)