Every few months or years we get told how unequal the world is becoming, and how the wealthy elite are grabbing up everything.



Since 1980, the richest 0.1 percent of the world’s population increased its collective wealth by as much as the poorest 50 percent.

The top one percent, meanwhile, lay claim to 27 percent of global wealth growth — a fortune facilitated by a steep rise in the cohort’s share of global income beginning in the early 1990s (right after the Soviet Union fell).

The global middle class has seen virtually no income growth over the past four decades.



It makes one very pessimistic.

...and yet there is still hope.

There is one part of the world that has bucked this trend.



Latin America offers some useful lessons. Here, income inequality has actually fallen, as shown by a decline in the average Gini index by 13%, from 2000-2012. This bucks the global trend, of growing income inequality.

Gosh, I wonder what could have caused this amazing counter-trend? Oh, right! Socialism.

Income inequality in Latin America partly fell due to labour market shifts. Poor people’s wages rose due to the commodities boom (which fuelled demand for unskilled labour); higher skills (facilitated by government investment in education); and active labour market policies (enforcing labour laws and increasing minimum wages).

This was complemented by the redistribution of wealth. Rising public spending on healthcare, education and social protection improved both coverage and quality for all citizens.

In other words, everything bad in the world that should make everyone poorer, amirite?

Sure they are more equal - in poverty!

I don't even have to check the numbers, but I will anyway.



During the decade or so of high growth in Latin America, the percentage of people living in poverty on the continent fell from 42% to 26%, while the middle class grew from 22% to 34%.

Just like I thought!

Wait, what?

Poverty fell? The middle class doubled?

At the same time the region went socialist?

How is that possible? The neoliberals said that isn't possible. Could the neoliberals be wrong?

In the past year, Argentina, Chile, and Brazil all went with center-right governments, while Venezuela's semi-socialist economy is collapsing. So this trend toward equality and prosperity will likely end.

On the other hand, Mexico may be electing a socialist in July, so who knows?