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This article was published 2/2/2014 (905 days ago), so information in it may no longer be current.
WASHINGTON — The inscription on Karl Marx’s tombstone in London’s Highgate Cemetery reads, "Workers of all lands, unite." Of course, it hasn’t quite ended up that way. As much buzz as the global Occupy movement managed to produce in a few short months, the silence is deafening now.
Indeed, as global multinational companies have eaten away at labour’s bargaining power, the factory workers of the rich world have become some of the least keen on helping out their fellow wage labourers in poor countries. But a new spectre may soon be haunting the world’s one per cent: middle-class activism.
Karl Marx saw an apocalyptic logic to the class struggle. The battle of the vast mass against a small plutocracy had an inevitable conclusion: Workers 1, Rich Guys 0. Marx argued the revolutionary proletarian impulse was also a fundamentally global one — that working classes would be united across countries and oceans by their shared experience of crushing poverty and the soullessness of factory life.
At the time Marx was writing, the idea that poor people were pretty similar across countries was eminently reasonable. According to World Bank economist Branko Milanovic, when The Communist Manifesto was written in 1848, most income inequality at the global level was driven by class differences within countries. Although some countries were clearly richer than others, what counted as an income to make a man rich or condemn him to poverty in England would have translated pretty neatly to France, the United States, even Argentina.
But as the Industrial Revolution gained steam, that parity changed dramatically. Just a few years after The Communist Manifesto was published, wages for workers in Britain began to climb. The trend followed across the rest of Europe and North America. The world entered a period of what Harvard University economist Lant Pritchett elegantly calls "divergence, big-time." In 1870, the average African person was about one-fifth as rich as his British comrade. Today, he’s worth less than one-tenth.
Although many Americans get worked up about absurdly inflated CEO salaries and hedge-fund bonuses, a hard economic fact has been overlooked: As the West took off into sustained growth, the gap in incomes among countries began to dwarf the income gaps within countries. That means a temp in East London may still struggle to make ends meet, but plop her down in Lagos, and she’ll live like a queen. If you’re feeling bad about your non-existent year-end bonus, consider this: Milanovic estimates the average income of the richest five per cent in India is about the same as that of the poorest five per cent in the United States.
Sorry, Karl: The simple fact that poor people in Europe and America are in the income elite according to the standards of South Asia and Africa is why the workers of all lands have not yet united.
Yet all that might soon be changing. Globalization is still a work in progress. As interconnected global markets get ever more interconnected, average incomes are converging. The last 10 years have seen developing countries grow far more rapidly than high-income countries, closing the gap in average incomes. Economist Arvind Subramanian estimates that China in 2030 will be about as rich as the whole European Union today, clocking in at a GDP per capita of around $31,000. Indonesia, he reckons, will see a GDP per capita of $23,000 — about the same as tech powerhouse South Korea today.
Put simply, this means within the space of a generation, a good chunk of the world will soon be solidly middle class — and inequality within nations will return as the dominant source of global inequality.
This doesn’t mean Marx can say, ‘I told you so.’
The reality is this new middle class will have lives Victorian-era working-class Brits could only dream about. They’ll work in LED-lit shops and offices rather than in dark, hellish mills. And they’ll live nearly 40 years longer than the average person in 1848. As wages increase and level out around the world, the plight of the proletariat — hard work, low pay — today more than ever means easier work and better pay.
But that doesn’t mean the elite should breathe easily. In fact, it is exactly because the rich and poor will look increasingly similar in Lagos and London that it’s more likely the workers of the world in 2030 will unite. As technology and trade level the playing field and bring humanity closer together, the world’s projected 3.5 billion labourers may finally see how much more they have in common with each other than with the über-wealthy elites in their own countries.
They’ll pressure governments to collaborate to ensure their sweat and blood don’t excessively enrich a tiny, global capitalist elite, but are spread more widely. They’ll work to shut down tax havens where the world’s plutocrats hide their earnings. And they’ll push to ensure it isn’t just the world’s richest who benefit from a global lifestyle by striving to open up free movement of labour for all, not just within countries but among them. Sure, it’s not quite a proletarian revolution. But then again, the middle class has never been the most ardent of revolutionaries — only the most effective.
— Foreign Policy