Afternoon Must-Read: Ryan Avent: Falling Inequality Across Countries Is No Reason to Ignore Within-North Atlantic and Within-Emerging Markets Inequality Growth

Ryan Avent: Inequality: On important but irrelevant facts: “WRITING on Thomas Piketty’s new book, Nicolas Goetzmann notes: ‘I think that Piketty missed something which might be important: Capital is mobile, workers are not, and at the end we have this: Gini is reducing on a worldwide basis since 2005.’ Scott Sumner adds: ‘I also like Goetzmann’s comment about global Gini coefficients. Liberals should care about global welfare. Are they closet nationalists?’

These sorts of remarks are common responses to those pointing out that inequality is soaring across the rich world, and they strike me as very problematic…. It implies, without ever making an actual argument, that efforts to reduce income inequality within rich economies must necessarily slow reductions in global inequality. Why bring up the global statistic unless you are worried that expressions of concern about national inequality are likely to undermine the global trend?…. I’m not sure why someone would want to stake out the position that subsidised pre-school for disadvantaged children is unnecessary, for example, because global inequality is falling…. [Moreover,] inequality is growing within emerging markets…. One of the most important points in Mr Piketty’s book is that the conventional wisdom that development naturally increases and then reduces inequalities is wrong…. So yes, global inequality has been falling. That is no reason for people of any ideological persuasion to ignore very worrying trends in national distributions of income and wealth.”