Opponents of economic globalization often point to the ways it has widened inequality within nations in recent decades. In the United States, for instance, wages have remained fairly stagnant since 1980 while the wealthiest Americans have taken home an ever greater share of income. But globalization has had another important effect: it has reduced overall global inequality. Hundreds of millions of people have been lifted out of poverty in recent decades. The world became more equal between the end of the Cold War and the 2008 global financial crisis—a period often referred to as “high globalization.”
The economist Christoph Lakner and I distilled this trend in a diagram released in 2013. The diagram showed per capita income growth rates between 1988 and 2008 across the global distribution of income. (The horizontal axis has the poorest people on the left and the richest on the right.) The graph attracted a lot of attention because it summarized the basic features of recent decades of globalization, and it earned the moniker “the elephant graph” because its shape looked like that of an elephant with a raised trunk.
