(OPE-L) Re: tendencies for equalization

From: Gerald A. Levy (Gerald_A_Levy@MSN.COM)
Date: Mon Oct 18 2004 - 10:50:46 EDT

Ian W,

In our prior discussion you wrote (on 10/4):  "the exponential
distribution is a reasonable fit for 90-95% for the income of
all groups in industrialised countries over a period of several

Can you make a reasonable fit for the above claim with those
of Arrighi, Firebaugh, Galbraith and Goesling (see, especially, #3
below)?  It seems to me that we are looking at two very different
sets of 'stylized facts' for the same phenomena.  In any event, wouldn't
you agree that the meaning of the data is not as clear you asserted?

In solidarity, Jerry

> Giovanni Arrighi <snip, JL>
> As for
> relative deprivation, the data are more abundant and reliable but the
> picture that emerges is far from univocal, with inequality rising in
> some directions and declining in others, and above all being
> characterized by extreme spatial unevenness.>
> Focusing first on different measures of inequality, the overall
> trends since 1980 can be summed up as follows.
> 1) Between-country income inequality measured at market exchange
> rates has increased more or less significantly depending on the
> particular indicator we use. Measurement at market exchange rates is
> particularly suitable to capture differences in wealth. In terms of
> wealth, therefore, relative deprivation has at best remained the same
> and at worst increased significantly (Wade 2004; Korzeniewicz and
> Moran 1997; 2000).
> 2) Between-country income inequality measured at purchasing power
> parity (PPP) has increased if we use equal country weights (China =
> Haiti) but it has been constant or falling if we weigh countries by
> population. Measurement at PPP captures differences in material
> well-being or welfare better than measurement at market exchange
> rates. In terms of welfare, therefore, relative deprivation has
> increased for the citizens of a large number of comparatively less
> populous poor countries but has probably decreased for the world
> population as a whole (Wade 2004; Firebaugh 1999; 2001).
> 3) Income inequality within countries has increased markedly,
> probably more than between-country inequality however measured
> (Firebaugh 2001; Goesling 2001; Galbraith 2002). We should
> nonetheless bear in mind that, in all likelihood, increasing income
> inequality within countries has been partly counterbalanced by
> increases in the upward/downward mobility of households and
> individuals. In the case of between-country inequality, in contrast,
> any such counterbalancing is likely to have been much less
> significant, because of the very limited upward/downward mobility of
> countries in the global hierarchy of wealth (Arrighi and Drangel
> 1986; Babones 2002; Arrighi, Silver and Brewer 2003). Indeed, such a
> mobility has been so low as to make the interstate hierarchy of
> wealth resemble a caste rather than a class system.
> All the above observations refer to aggregate trends. Instructive as
> they are in cautioning us against attributing to the world as a whole
> tendencies inferred from local, national and world-regional
> experiences, they all miss what is probably the most important
> tendency of the global political economy over the past 25 years: the
> extreme spatial unevenness of the overall trends. <snip, JL>
> References (snipped, JL)
> Firebaugh, Glen. 1999. "Empirics of World Income Inequality."
> American Journal of Sociology 104 (6): 1597-1630.>
> Firebaugh, Glen. 2001. "The Trend in Between-Nation Income
> Inequality." Annual Review of Sociology 26: 323-339.
> Galbraith, James K. 2002. "A Perfect Crime: Global Inequality."
> Daedalus Winter: 11-25.
> Goesling, Brian. 2001. "Changing Income Inequalities within and
> between Nations: New Evidence." American Sociological Review 66 (5):
> 745-761.

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