Tuesday, July 22, 2008

FT: Boom time for the global Bourgeosie

FT.com / Comment & analysis / Comment - Boom time for the global bourgeoisie

In the midst of the current widespread gloom and doom in the west,
it is important not to lose sight of the true structural themes shaping
our era.

Linked to the current mood, commentators often depict
an embattled and shrinking middle class, with sharply rising financial
inequality. However, globally, this is simply not true. One of the most
startlingly positive phenomena for many generations continues to unfold
around the world. We are in the middle of an explosion of the world’s
middle class.

As two of my colleagues, Dominic Wilson and Raluca
Dragusanu, showed in a paper Goldman Sachs published last week (The
Expanding Middle: The Exploding World Middle Class and Falling Global
Inequality), about 70m people a year globally are entering this wealth
group, as defined by those on incomes of between $6,000 and $30,000
(€3,800-€19,000, £3,900-£15,000), in purchasing power parity terms.

phenomenon may continue for the next 20 years, with this global middle
accelerating to 90m a year by 2030. If this happens, an astonishing 2bn
people will have joined the ranks of the middle class. This
demonstrates that, contrary to widespread opinion, global inequality is
declining significantly, not increasing.

This is good news and overlooked in election year rhetoric.

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