I agree with James Galbraith that the charts in The Economists article on 21 August 2003, Catching up, do not say everything that needs to be said on the subject of globalisation and inequality. The right question to ask, though, is not whether Stanley Fischers graphs simplify a complicated issue that is what concise accounts of complex subjects are supposed to do but whether they are useful and revealing.
I think that most fair-minded people would agree that these charts tell an important and encouraging story: most of the poor people in the world are living in countries where per capita incomes are growing very rapidly. That is not everything you need to know on the subject, but it is surely one of the first things you need to know. Strangely, it is a fact that appears to embarrass and annoy Prof Galbraith.
While it is true, as he emphasises, that inequality within countries is increasing in many cases, the fact that growth is so rapid in China and India means that it is at least possible that global inequality ignoring national boundaries, and measuring across the entirety of the worlds people is falling. In his comments, Prof Galbraith cannot bring himself even to acknowledge this possibility. Given that he professes to be interested in global inequality, I find that odd.
China and India are not liberal market economies which is a pity, in my view. But wide-ranging reforms undertaken in both countries have been designed to attract inward investment and exploit international trade. If Prof Galbraith believes that these reforms have nothing to do with the recent success of those economies, he is in a very small minority of his profession.
To say, as The Economist has, that Africas problem is too little globalisation, not too much is another useful simplification. Africas failure to establish broad and deep economic linkages with the rest of the world is holding back growth in the region. That is the view not just of pro-market papers like The Economist but of a wide array of economic researchers, regardless of their ideological leanings. Where views differ, and where constructive debate ought to be possible, is on what needs to be done to develop those linkages that is, on what must be done to extend the benefits of globalisation. Prof Galbraith prefers merely to reassure those who regard anti-globalist slogans as an adequate summary of the arguments.
Finally, Prof Galbraith impugns The Economists good faith. He leads the readers of openDemocracy to think that our account of Stanley Fischers paper is a distortion. Let me assure you, that is not Mr Fischers view. But at least Prof Galbraith and I agree that the best thing would be for anybody interested in these issues to read Mr Fischers article in the American Economic Review. Then they can decide for themselves whether The Economist or Prof Galbraith is guilty of attempting to mislead.
