Ok — I know this isn’t a link blog, but this Monday column from 3quarksdaily is just way too interesting:

Economic growth alone does not eliminate poverty. Many economists forecast that it will take China, even at its remarkable rate of economic growth, almost 30 years to eliminate dire poverty, leaving a massive job of lifting another up to half a billion people out of three to four dollar a day poverty. Perhaps cognizant of this, the Chinese state is taking dramatic steps to redistribute income to the rural peasantry, eliminating land taxes, providing free public education, and rebuilding a rural health system. Yet, even as Chinese poverty will prove a difficult problem to solve, a middle class will be living at the level of the today’s Korean middle class, and the great wave of capitalist development will have created a massive new generation of the truly, world-level wealthy. Inequality will get worse, and one can only wish good luck to the Chinese peasants.

The first lesson here is that economic growth creates the wealthy first, and brings along the masses later – far later than the time necessary to earn their way to equality through labor or enterprise. It happens inside countries like our own. It happens across countries. Consider evidence accumulated by World Bank economist Branko Milanovic that the ratio of inequality, rich country to poor country, has grown from 19 to 1 in 1960 to 37 to 1 in 2000. This is true despite the spread of industrialization, thought to be the holy grail of development, and rising income levels in Asia.

More here.

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