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Haves And The Have-Nots: A Brief And Idiosyncratic History Of Global Inequality (2014)

by Branko Milanović(Favorite Author)

3.51 of 5 Votes: 4

ISBN

1299714560 (ISBN13: 9781299714564)

languge

English

genre

History & Biography

publisher

Basic Books (AZ)

review 1: My reading has been somewhat protracted as I got the silly idea ofworking at work. Anyhoo, I am on page 105 in "The Haves and the HaveNots" by Branko Milanovic and wanted to share my impressions. This isone of those books that are useful but annoying to read. M. isnaturally fond of the subject of inequality but to him inequality isthe major if not the sole source of all his theorizing. This is liketrying figure out why the cars run by listening to the sound of theengine but not caring to look under the hood. Milanovic's theories andexplanations are shallow and naive at best.But let us start with the interesting and useful things first. Naah,what's the fun in that? M. thinks that the reader would not be able tohandle tables and graphs. There are none in the book. It getsann... moreoying. For example, he discusses the Gini coefficient, yet hementions the coefficients of various countries, occasionally multipletimes, across several pages pages without bothering to provide a simpletable. I had to look up the coefficients table on the web.One of the sidebars (he cutely calls them vignettes) is fun. Hecompares the riches of the famously rich people in history. As a basisfor comparison he uses the number of workers (of that country) theperson would be able to afford on the interest of off hisfortune. This is almost Marxian. So, Marcus Crassus (of SpartacusFame) - 32K people; Andrew Carnegie - 48K; Rockefeller - 116K, (poor)Bill Gates - 75,000; Mikhail Khodorkovsky of Russia almost took thecake with 250K people but was upstaged by Mexican Carlos Slim with$440K Mexicans. Milanovic surmises that Khodorkovsky is a lot moredangerous to the powers that be than US moguls and thus he sits injail.Another one of his vignettes talks about inequality of the romanempire compared to the inequality of the US. M. says that the top tobottom was about as unequal yet most people in Rome lived at or justabove the subsistence level so there were no "middle class".The vignette on egalitarianism of the Soviet Union and shadowy incomeand privilege distribution is annoying. He might be even right in hisstatements, but with his hatchet job of approach to history and societyI still want to kick him in the face.There was a vignette of comparison of arrondissement (districts) ofParis and their migration through history. There was no rhyme orreason to it that I can discern.There was an interesting discussion of income redistribution throughtaxation. There was *gasp* a graph: the bottom decile gains slightlyless than 4% of income in the US and over 6% in Germany. It turns outthat the middle class deciles (5th and 6th) actually lose through theredistribution yet consistently vote for it. M. is puzzled by it butsays that the middle class gains some security that way (in case ofinjury or for retirement).Then comes the chapter with one of the major theses of thebook. M. compares the breakups of Yugoslavia, USSR and the currentsituation in China. It turns out in the USSR the gap between the GDPbetween the poorest republic and the richest was 6 to 1 (compared toUS' states 1.5 to 1) and Yugoslavia's was 8 to 1. He claims thisinequality was the major reason for these countries' collapse. He thentalks about China where the per capita GDP difference betweenprovinces is 10 to 1. On the basis of this M. predicts the breakup anddissolution of mainland China. No never mind the differences in ethnicmakeup, historical circumstance and whatever not between his examples.Presently, M. described Pareto's "law" of income distribution (thereis always about the same proportion of rich people, Pareto calls themaristocracies, regardless of the particular political or economicsystem of the society) and Kuznets' curve (primitive societies wereabout equal of the subsistence level then became more unequal andthen, as modern democracies developed, became more equal again). It isamazing as all this (which is essentially glorified listening to thecar's engine without bothering to explain how it works) is takenseriously as science. Naturally, Marx is roundly dismissed in a coupleof sentences.Now M. introduced purchasing power dollars (PPP$) which is often usedand always puzzled me (the money is indexed by the basket of goods andservices they can buy). The Japanese earn more money than theAmericans yet, their goods are more expensive so the Americans comeout ahead in PPP$.Milosevic, I mean Milanovic, improves significantly once he gives uphis meager attempts at trying to provide any kind of serious analysisof the causes of inequality and just starts to slice and dice the datato paint a rather grim picture of this unequal world.And M. is actually decent at it. By using the data he thoroughlydebunks the neoclassical myths that are often stuck in people's heads.The main thesis of what he calls globalization is that the countries'incomes would converge since poor countries' income would grow fasterthan the rich ones. The reasons are:- Poor countries would get most direct foreign investments because they have lower wages and higher return on investments. It turns out the opposite is true. The capital mostly flows from rich countries to other rich countries. China does quite well as far as third world countries go $138 bls in direct foreign investments (DFI) in 2007. Meantime, the US got $240 bls. Actually, China gets about the same as the Netherlands and worse than France and Great Britain. China is, however, an exception. 2007 was a breakout year for India: it attracted $23 bls, half as much as Australia. Before it averaged $4-6 bls. The capitalists of rich countries tend to lend money to each other afraid of the risks associated with investing in the third world. What's worse, for the same reason, the investments are actually flowing upwards from the poor to the rich countries.- Poor countries can have access to technologies already developed in the first world: it is easier to copy than to design anew. Aha, as soon as microsofts and the pharmaceuticals stop charging for licensing everything would be peachy.- The poor countries would "borrow" the ideas as far as governance and economic policies that work. Yeah right, every country would just adopt the american-style bourgeois democracy as soon as they get rid of their dictators.Then, Milanovic kicks Marx again for a chapter. I just ignored him forhe knows not what he does.Thankfully, Milanovic started using graphs. He breaks up thepopulations of different incomes into ventiles (one-twentieths),averages their income and compares those. The results arestriking. The poorest ventile in the US is richer than the richest inIndia. And that is with US being rather unequal (Gini is in mid-40ies)Speaking of Gini-s. Milanovic calculates that world's total Ginicoefficient is between 70 and 80. For comparison, Brazil is a veryunequal country where some of the world's poorest and richest peoplelive. Its Gini is in the 60-ies. M. talks about the dynamics ofinequality. It actually stayed about the same since 1980. However,that masks the fact that most of the third world countries are gettingcomparatively poorer while China and India are getting richer.You'd think if you save and work hard, you'll make it in the world,right? It turns out that statistically, 80% of your income isdetermined by your citizenship and your strata of birth. The other 20%goes to for such factors as gender, race, age, luck and, oh, yeah,work ethics. Naturally, the best way to improve your economic lot isto immigrate to rich country. Hmm, that sounds familiar, I thinksomebody I know has done that. M. talks about the plight of "haraga" -Africans dying to make it to Europe on makeshift boats.M. talks about World's "middle class" - people within 25% of the worldmedian income. In 2005, the median yearly income was PPP $1,225. Also,turns out the world does not have much of a middle class: only 14% arewithin the bracket. For comparison, the figure is about 40% fordeveloped countries.M. compares inequality of Europe and the US. The US is a lot moreunequal to any of the european countries. However, the states withinthe Union are relatively homogeneous. The ratio between per capitaincome in the richest and poorest state is 1.5. The ratio in Europe is7 to 1. The ventiles of the richest (Luxembourg) and the poorest(Romania) countries do not overlap. That is, statistically, allLuxembourgers are richer than all Romanians.Another interesting chapter is on colonies. The idea is that themaximum amount that can be extracted from the country is when all thepopulation is kept at the subsistence level while a tiny(statistically negligible) elite appropriates all thesurplus. Naturally, the larger the GDP per capita in a country, themore can be appropriated. They draw a curve call Inequality PossibilityFrontier for countries with different GDP per capita. Colonies such asIndia, Nuevo Espana (Mexico), Kenya lie neatly near this curve. Thecolonizers sucked these countries dry.
review 2: First off, let me admit that I generally do not finish non-fiction books, even when I am interested in the subject. I really wanted to read and understand this book, but I simply didn't. Although the author touted the book as friendly to the lay person, it was beyond my understanding and attention span. I did finish some of the less-dense essays about his analysis of characters in literature and while they were interesting, they were less than enlightening. Someone more more time to focus and fewer distractions (ie no children demanding dinner) would probably get more out of this book. less

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