The pandemic is said to be exacerbating global income inequalities, penalizing poor countries further. This, which sounds reasonable and has been written by economists like Joseph Stiglitz, academics like Ian Goldin and Robert Muggah -funded by the powerful World Economic Forum-, or institutions like the United Nations Development Program (UNDP), is false. The person in charge of verifying this has been the veteran ‘Nobel’ Prize for Economics Angus Deaton which last week published its initial findings.
Deaton’s inquiry has nothing to do with the suffering caused by the pandemic, or with the internal inequality of the countries. The author assumes that global poverty has almost certainly increased, but that does not imply anything about global inequality. Per capita income losses were generally higher for countries that were richer in 2019 because, proportionally, they have suffered more deaths. This has brought the countries closer together, not alienated them.
The calculation can be done in two ways: considering countries as individuals or weighting by their income and population. “Contrary to pre-existing trends, the pandemic reduced unweighted global inequality and increased weighted global inequality,” Deaton writes.
The slight increase in the second case is due to the effect that Chinese wealth has not decreased, but increased, and also had few deaths (as we saw last week when analyzing the McKibbin scenarios). “China has managed this year to put 1.4 billion Chinese ahead of 1.4 billion Indians.” The paradox is that weighted inequality has grown not because the rich are richer and the poor are poorer, but because the poor have gotten richer.
In fact, Deaton believes that China can no longer be considered poor. Today, of the 7,800 million inhabitants of the planet, 4,400 million live in countries whose per capita income is lower than that of China, while only 2 billion live in countries whose income is higher.
The study deserves attention on several points. First, it reconciles the analysis of the current pandemic with the historical evidence accredited by scholars such as Walter Scheidel (The great leveler, Critica, 2018) or the same Thomas piketty. Scheidel argues that throughout history growth has always brought inequality and that the great levelers are the “four horsemen of equality”: war, revolution, collapse of the state and epidemics.
On the other hand, it invites reflection, because it is no longer that there is no incompatibility between health and the economy, it is that wealth does not mean health. If the index elaborated by Johns Hopkins, the Nuclear Threat Initiative and The Economist Intelligence Unit in 2019, the countries that did better in the Global Health Security ranking had more deaths than those that did worse. johnmuller.es@gmail.com
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