THE HAVES AND THE HAVE-NOTS:A Brief and Idiosyncratic History of Global Inequality

Thy Neighbor’s Wealth

By CATHERINE RAMPELL

Published: January 28, 2011

Who needs to keep up with the Joneses? What people really care about is keeping up with the Rockefellers. That’s the main theme of “The Haves and the Have-Nots,” an eclectic book on inequality that attempts to document the long history of coveting by the poor, and the grim consequences of that coveting.

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Illustration by Jens Bonnke

THE HAVES AND THE HAVE-NOTS

A Brief and Idiosyncratic History of Global Inequality

By Branko Milanovic

258 pp. Basic Books. $27.95.

Written by the World Bank economist and development specialist Branko Milanovic, this survey of income distribution past and present is constructed as a sort of textbook-almanac hybrid. It revolves around three technical essays summarizing the academic literature on inequality, which are each followed by a series of quick-hit vignettes about quirkier subjects, like how living standards in 19th-century Russia may have influenced Anna Karenina’s doomed romance, or who the richest person in history was.

The first essay is a primer on how economists think about income inequality within a country — in particular, how it is measured, and how it is related to a country’s overall economic health. At a very basic, agrarian level of development, Milanovic explains, people’s incomes are relatively equal; everyone is living at or close to subsistence level. But as more advanced technologies become available and enable workers to differentiate their skills, a gulf between rich and poor becomes possible.

This section also gingerly approaches the contentious debate over whether inequality is good or bad for economic growth, but ultimately quibbles with the question itself. “There is ‘good’ and ‘bad’ inequality,” Milanovic writes, “just as there is good and bad cholesterol.” The possibility of unequal economic outcomes motivates people to work harder, he argues, although at some point it can lead to the preservation of acquired positions, which causes economies to stagnate.

In his second and third essays, Milanovic switches to his obvious passion: inequality around the world. These sections encourage readers to better appreciate their own living standards and to think more skeptically about who is responsible for their success.

As Milanovic notes, an astounding 60 percent of a person’s income is determined merely by where she was born (and an additional 20 percent is dictated by how rich her parents were). He also makes interesting international comparisons. The typical person in the top 5 percent of the Indian population, for example, makes the same as or less than the typical person in the bottom 5 percent of the American population. That’s right: America’s poorest are, on average, richer than India’s richest — extravagant Mumbai mansions notwithstanding.

It is no wonder then, Milanovic says, that so many from the third world risk life and limb to sneak into the first. A recent World Bank survey suggested that “countries that have done economically poorly would, if free migration were allowed, remain perhaps without half or more of their populations.” Mass-migration attempts are met with sealed borders in the developed world, which then results in the deaths of thousands of anonymous indigents journeying to promised lands only to be swallowed up by the Mediterranean or charred in the Arizona desert.

But while Milanovic demonstrates that inequality between countries is unquestionably toxic, he is less persuasive about the effects of inequality within countries. He frequently assumes that this kind of inequality is by its very nature problematic, but provides scant historical evidence about why, particularly if mobility is ­possible.

In general, mobility — and the policies that promote it — are given disappointingly little space. The same goes for how income inequality might affect the functioning of a democracy.

As a result of such blind spots, “The Haves and the Have-Nots” can feel somewhat patchy or disorganized at times. Milanovic’s more colorful vignettes, on the other hand, are almost uniformly delightful. No matter where you are on the income ladder, Milanovic’s examination of whether Bill Gates is richer than Nero makes for great cocktail party ­conversation.

Catherine Rampell is the economics editor at NYTimes.com.