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Getting the balance right

Branko Milanovic is the lead economist at the World Bank’s research department, a professor at the University of Maryland and a grand fromage at the Carnegie Endowment for International Peace too.

26 February 2011

12:00 AM

26 February 2011

12:00 AM

The Haves and the Have-Nots Branko Milanovic

Basic/Perseus Books, pp.272, 16.99

Branko Milanovic is the lead economist at the World Bank’s research department, a professor at the University of Maryland and a grand fromage at the Carnegie Endowment for International Peace too.

Branko Milanovic is the lead economist at the World Bank’s research department, a professor at the University of Maryland and a grand fromage at the Carnegie Endowment for International Peace too. He is not, it turns out, a very light-hearted man and that’s a particular misfortune because The Haves and the Have-Nots was clearly designed to be the easy-reading version of his far more weighty tome on global inequality, Worlds Apart.

The structure of this latest work is idiosyncratic — taking a short but dense history of inequality and interspersing it with some exercises in virtuosic statistical research which are self-consciously flippant: in which 13th-century Parisian arrondissement would it be preferable to live? Who was the richest man in the history of the world? How wealthy was Jane Austen’s Mr Darcy?

Some of these vignettes, offered almost as politenesses before the serious discussion gets going, are ponderous, condescending and ultimately pointless. The section on Darcy begins infuriatingly: ‘It is a truth universally acknowledged that Pride and Prejudice is a novel about love. It is less universally acknowledged that it is a novel about money, too.’ Nonsense! Everyone knows that the book is all about spondulicks; even the well-worn quotation Milanovic pastiches revolves around the ‘possession of a good fortune’. Would you believe it, I ploughed through his cost-benefit analysis of Lizzie Bennet’s love-life, only to discover that the author’s conclusion is even more asinine: ‘One would really have to hate Mr Darcy to reject the deal he is tacitly offering.’ Good grief.


Happily for readers, these vignettes — there are about two dozen in all — are clearly labelled and mercifully short, so you can readily skip the most unpromising. Of course, to skip them at all, one would first have to be in possession of the book. If you have the slightest interest in politics and macro-economics, you should be. When Milanovic gets serious, he becomes indispensable.

Amongst the junk, the author makes a compelling case for inequality as a driving force of world history. That is a particularly important argument in Britain and the US, where thanks to a trenchant campaign by the Right, ‘equality’ has become a dirty word. Milanovic is not an ideological crusader; rather he very calmly explains why the least successful states are likely to display very high levels of inequality or else almost total equality. He also offers convincing proof that in the last 30 years, it is the western middle classes who have gained the least from domestic policies of deregulation and welfarism.

If you have the sense that modern politics often resembles a series of con-tricks perpetrated at your expense, you’ll find plenty of evidence here. What caused the global financial crisis? Never mind ‘derivatives’ and the fat-cat bankers who traded them, Milanovic addresses the more profound issue of why so much cheap debt was offered in the first place. His answer is that cheap debt improved the living standards of the middle classes and disguised decades of relatively stagnant income growth. Our politicians failed long before the banks did.

Some of those flippant vignettes turn out to be rather insightful, too. Marx’s call for global proletarian revolution came to nothing, argues the author, because it was made at the very moment when wages in the west began to outstrip all others. Any worldwide notion of solidarity was, therefore, doomed from the start. Amazingly, Milanovic actually has the hard data to show this.

All his most interesting observations take in the broad sweep of history and focus down onto often obscure economic fine detail to reveal something new. Milanovic argues, for example, that the greatest threat to Chinese unity stems not from nutty generals or democracy campaigners but from internal geographical inequality. While vast regions of the world’s most populous nation are economically stagnant and relatively impoverished, a belt of 11 maritime states is wealthy and growing rapidly. As a result, trouble is brewing.

Skip the small talk then, for the substance. The Haves and the Have-Nots is a fascinating book and Branko Milanovic surely richly deserves his many titles. He may even be the life and soul of the World Bank Christmas party, but somehow I doubt it.


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