The New Geography of Global Income Inequality
Average customer rating: 5 out of 5 stars
  • My review previously published in American Journal of Sociology
  • The Inequality Transition
  • Much of What You Thought You Knew Is Wrong
  • Are the rich getting richer?
  • The New Global Equality
The New Geography of Global Income Inequality
Glenn Firebaugh
Manufacturer: Harvard University Press
ProductGroup: Book
Binding: Paperback

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ASIN: 0674019873

Book Description

The surprising finding of this book is that, contrary to conventional wisdom, global income inequality is decreasing. Critics of globalization and others maintain that the spread of consumer capitalism is dramatically polarizing the worldwide distribution of income. But as the demographer Glenn Firebaugh carefully shows, income inequality for the world peaked in the late twentieth century and is now heading downward because of declining income inequality across nations. Furthermore, as income inequality declines across nations, it is rising within nations (though not as rapidly as it is declining across nations). Firebaugh claims that this historic transition represents a new geography of global income inequality in the twenty-first century.

This book documents the new geography, describes its causes, and explains why other analysts have missed one of the defining features of our era—a transition in inequality that is reducing the importance of where a person is born in determining his or her future well-being.

Customer Reviews:

5 out of 5 stars My review previously published in American Journal of Sociology.......2007-04-11

When I first came to the United States in 1983 as a graduate student at the University of Wisconsin, I was overwhelmed by how much money Americans made. Sure, I also noticed inequality in America, but what struck me the most was that almost all Americans were better off than all Chinese. My parents were medical doctors and had higher salaries than their peers. With a combined income of about $100 a month, however, they earned only a fraction of what a minimum-wage American worker would earn. As a graduate student in the United States, I was considered rich in China and was therefore expected to bring home luxury items (such as color TVs and cameras), which I did in 1984.
Twenty years later, I am now relatively well paid as a University of Michigan professor. China has changed far more dramatically during that time, however. When I visit China now, I often encounter situations in which friends make a concerted effort to let me know that they are financially more successful. Indeed, the rapid pace of economic development in China over the past 25 years has led to sharp increases in both personal income and income inequality, so that many among the Chinese elite now enjoy standards of living that surpass those commonly seen in America and other industrialized nations.
Personal observations are no substitute for systematic studies. If you want to understand how global income equality has evolved in recent decades and why, look no further. Glenn Firebaugh has provided the most complete, thoughtful, and intriguing study on the subject, The New Geography of Global Income Inequality.
Global income inequality can be divided into two components: Income inequality within countries and income inequality between countries. Firebaugh's book centers on the latter -- between-nation inequality. We know that income inequality within many countries (such as U.S. and China) has been increasing in recent decades. However, the vast majority of global income inequality in the past two centuries has been attributable to between-nation rather than within-nation inequality. Firebaugh divides the history of global inequality into two phases. Phase 1, which occurred between the beginning of western industrialization in the late eighteenth century and the middle of the twentieth century, was characterized by rapid growth in between-nation inequality. In phase 2, which immediately followed, Firebaugh observes a reversal of that trend -- a steady decline in between-nation inequality. Hence his "new geography of global income inequality" is one of a decreasing trend in between-nation income inequality accompanied by a modest increase in within-nation inequality. Firebaugh provides persuasive explanations for his new geography, chief among which is the spread of industrialization to poor countries and the reduction of distance barriers due to advances in technology and the culture of globalization.
This is an outstanding book, showcasing what sociology can offer by enhancing our empirical knowledge of the world. While powerfully conceptualized and methodologically sophisticated, Firebaugh's case ultimately rests on the analyses of data from the Penn World Table. It is no small task to draw an empirical generalization from the data. Indeed, much of the book is devoted to discussions of measurement issues that may lead to an alternative conclusion - the continuation of the increase in between-national inequality. Two issues are crucial. First, Firebaugh argues that an international comparison of economic well-being should be based on purchasing power parity rather than exchange rates. Second, because the focus is on individual-level economic well-being, he presents a compelling case that comparisons between nations should be weighted by population size.
As much as I like the book, I encourage readers to appreciate Firebaugh's excellent scholarship as much for the questions it raises as for the concrete conclusions it reaches. I have a few questions of my own. First, as Firebaugh realizes, his conclusions are mainly driven by a single case: China. China is the most populous nation and has recently experienced rapid economic development. Since his measures are weighted by population size, China exerts overwhelming influence on the decreasing trend of between-nation inequality. How to interpret the rise of economic power in China in the post-1978 period is a complicated issue requiring further research, perhaps into the role of social institutions. Second, the national average of personal income, the raw material for the study, contains no information about within-nation variability. Yet, regional (thus geographical) variation and rural-urban difference in income can be very large in some countries (such as China). Would the trend look the same if we disaggregated China geographically? More broadly, should the "new geography" be based merely on discrete, internally homogeneous units called "countries"? If there is good reason for doing so, one would want to include the role of government and economic exclusivity within national boundaries in the discussion. Finally, despite the word "geography" in the book's title, Firebaugh's measures of between-nation inequality are not truly geographic, as distances between countries (within a continent) are not considered.
In the final analysis, these questions and comments do not detract from the important contributions made by this book. Firebaugh's argument is articulate, forceful, and well-presented. All who are concerned with issues of income inequality, scholars and laypersons alike, will find much to learn from this book, as will students seeking to master the art of conducting empirical social science. For these reasons, I highly recommend Firebaugh's latest contribution.

5 out of 5 stars The Inequality Transition.......2003-08-28

Glenn Firebaugh is the first scholar to document an extraordinarily important pattern in modern economic history.

Prior to industrialization, persons in one nation fared about as well as persons in other nations with respect to income and standard of living. Within nations, however,individual deviations from the means of national income were commonly quite large.

One effect of industrialization was to reverse this situation. Today dramatic disparities in income are found between industrial and non-industrial nations, with industrial nations and their citizens being quite well off and non-industrial nations and their citizens being quite poor, on average.

Using highly regarded national income data and bringing to his analysis a set of well-reasoned assumptions, Firebaugh makes an astounding discovery. In the last quarter of the 20th Century income inequality began to increase within nations and
decline across nations. An economic process that has pointed in one direction for over a hundred years has begun to reverse itself.

Firebaugh coins the term "inequality transition" to identify the two stages of an economic process related to the global spread of industrialization. In the first stage, the principal source of global income inequality moves from within-nations to between-nations. In the second stage, the principal source of global income is restored to the historic norm, namely, within-nations. Today we are in the early stages of the second phase of the inequality transition.

Critics of modern, capitalist, industrial expansion have it wrong. Contrary to their pessimistic pronouncements, today, the overwhelming majority of the world's poor are not getting poorer but are getting richer. Spreading industrialization is improving the lot of most of the world's peoples. Indeed, the promise of global economic justice is inherent in the notion "inequality transition."

5 out of 5 stars Much of What You Thought You Knew Is Wrong.......2003-07-27

Much of what you thought you knew is wrong! If you are seriously interested in globabilization and recent trends in world income inequality, you need to read Glenn Firebaugh's The New Geography of Global Income Inequality (Harvard U. Press, 2003). In a straightforward and detailed presentation, Firebaugh explains the arithmetic of inequality -- how it divides into within-nation and between-nation components. He then charts each of these, both over-time and at the present time. You will learn where the U.S. fits in the world, and which countries and continents are at the top and the bottom in terms of income and inequality in income. Most important, you will see that, contrary to much current journalistic and even scholarly writing, world income inequality has actually been decreasing since the 1990s. This books complements and in important ways adds to recent books by Stiglitz, Easterly, Soros, Bhalla, Diamond, and Landes

5 out of 5 stars Are the rich getting richer?.......2003-07-21

Are rich nations getting richer and poor nations getting poorer? Are the rich nations exploiting the poor nations, as critics of globalization in the trade protest movement suggest? The answer to both questions is no, according to Firebaugh, who shows that world inequality is on the decline. This book should become a classic among scholars, but it should also be of interest to the general public. Firebaugh writes well and uses plain talk and common sense along with plenty of supporting evidence.

5 out of 5 stars The New Global Equality.......2003-07-04

This thorough and informative investigation should be rewarding reading for anyone who is interested in understanding the past, assessing the present, and thinking about the future of world income inequality. This book puts conventional wisdom to the test about the course of global income inequality at a time when alarms are being sounded about large-scale economic changes that are occurring throughout the world with increasing globalization. Among the claims of conventional wisdom that this book challenges are: (1) world income inequality is increasing across nations, with the rich getting richer and the poor getting poorer; (2) globalization exacerbates inequality across nations; and (3) international exchange is inherently exploitative. One of the nice things that the author is able to do is point out how inequality within nations and inequality between nations contribute to the overall level of global income inequality. I would recommend this book to readers of all ideological persuasions who are interested in a thoughtful presentation and discussion of evidence about a contentious issue.
The new geography of global income inequality.(Book review): An article from: Comparative Economic Studies
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    The new geography of global income inequality.(Book review): An article from: Comparative Economic Studies
    Kathryn Anderson
    Manufacturer: Thomson Gale
    ProductGroup: Book
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    ASIN: B000S6JD4K
    Release Date: 2007-06-18

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    This digital document is an article from Comparative Economic Studies, published by Thomson Gale on June 1, 2007. The length of the article is 1396 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

    Citation Details
    Title: The new geography of global income inequality.(Book review)
    Author: Kathryn Anderson
    Publication: Comparative Economic Studies (Magazine/Journal)
    Date: June 1, 2007
    Publisher: Thomson Gale
    Volume: 49 Issue: 2 Page: 326(4)

    Article Type: Book review

    Distributed by Thomson Gale

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                    Thankfully, I found this book. Its comprehensive advice is as useful as it is easy to understand, for every aspect of the job search. Knock 'em Dead answered my questions about how to identify the best job opportunities, how to craft my letters of introduction to catch an employer's interest, and most importantly, how to handle any interview situation smoothly and confidently. Within an amazingly short time, I got myself a better job than I would have believed possible for someone with my background, and at a better salary than I had hoped for.

                    Job interviews still make me nervous, but to be honest, it's the anticipation more than the actual process that bothers me now. Once the interview starts, I find myself actually quite comfortable, because I know that I've prepared thoroughly for whatever's coming. Even if you can't necessarily anticipate every last question an interviewer will hit you with, you can certainly come close, and the more prepared you are, the easier it is to deal with the few unknowns.

                    I don't doubt that I would have been tripped up several times in my job interviews had I not read this book first. With it, I was never unsure of myself, never came out of an interview thinking, "If only I had done this differently." I can't recommend it enough.

                    5 out of 5 stars Outstanding Book.......2007-06-08

                    This is a Must Have. If you are in the market for a job or simply checking your marketability, I highly recommend this book. The ideas helped me a great deal and I got a job with the first company I interviewed with.

                    5 out of 5 stars The ultimate job interview guide.......2007-05-09

                    About 16 years ago I quitted the first job after my graduation and needed to find a second one fast. Luckily I came across a copy of Knock em Dead in a public library. It really helped. I even (forgive me) photocopied the chapter on answering tough interview questions, which I had kept for years. Recently a friend of mine asked my opinion on how to handle job interviews. Within 24 hours I bought him this and of course, he found it very useful, too. I am obliged to praise it here and give it five stars, which I should have done it years before. In short, a must for any job seeker.

                    p.s. Below please find some questions with model answers in the book for your consideration.

                    What are the reasons for your success in this profession?
                    Why do you want to work here?
                    What did you like/dislike about your last job?
                    What is the least relevant job you have held?
                    How long would you stay with the company?
                    Describe a difficult problem you've had to dealt with?
                    How do you handle tension?
                    Do you have any questions?..........

                    Books:

                    1. The Nobel Memorial Laureates in Economics: An Introduction to Their Careers And Main Published Works
                    2. The OECD, Globalisation and Education Policy (Issues in Higher Education)
                    3. The Paradox of Plenty: Oil Booms and Petro-States (Studies in International Political Economy , No 26)
                    4. The Poetics of Primitive Accumulation: English Renaissance Culture and the Genealogy of Capital
                    5. The Value of a Dollar: Prices and Incomes in the United States, 1860-2004 (Value of a Dollar)
                    6. The Welfare Economics of Public Policy: A Practical Approach to Project And Policy Evaluation
                    7. The World Trading System - 2nd Edition: Law and Policy of International Economic Relations
                    8. Theories of Corporate Governance: The Theoretical Foundations
                    9. There's No Business That's Not Show Business: Marketing in an Experience Culture
                    10. Thoughts of Chairman Buffett: Thirty Years of Unconventional Wisdom from the Sage of Omaha

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