Don't mention the Elephant (Curve): Globalisation and its Discontents

The recent imposition (and partial deimposition) of US tariffs on goods from the rest of the world, and retaliatory tariffs in response, possibly marks the end of over half a century of consensus about the benefits of international free trade and Globalisation, in which supply chains become over longer and the economies of different countries become ever more connected and interdependent.

One of the clearest effects of globalisation over the generation and a half is evidenced in what's become referred to as The Elephant Curve. Describing and understanding this graph is a bit complicated, but doing so reveals many of the benefits, challenges and paradoxes that decades of Globalisation have brought the world's population.

This graph is produced by splitting the world's population into 100 equal sized subpopulations, from those who were in the poorest 1% of the world's population in a given year (say 1988), to the world's richest 1%. The world's population is then laid out from poorest to richest on the horizontal axis, from left to right. And on the vertical axis is plotted how much income changed as a percentage of income in the reference year.

The graph is known as The Elephant Curve because it curves a bit like the silhouette of an elephant: the elephant's tail, representing the world's poorest, on the left of the graph, show little growth. The elephant's back, representing the low to mid range of the world's population, show a higher and more steady group. And then towards the right: the elephant's trunk, which first arcs down - representing the working and middle class of the rich world, whose relative incomes have increased only modestly - then towards its tip sharply upwards again, representing the richest few percent of the world, whose wealth has increased exceptionally quickly.

Properly understood, the Elephant Curve helps explain both Globalisation as a means of rapidly improving the economic prospects of most of the world - bringing the world closer together in economic terms, as well as likely cultural terms - but also as bringing increasing inequality and opportunity for discontent within high income nations. The arcing trunk of the elephant is in effect the experience of Globalisation experienced by populations of high income nations: from this perspective it has been one in which working and middle class living standards have stagnated, whereas the wealth of the super-rich has increased at ever faster rates. Could this felt experience within the rich world help explain more radical political offerings - whether from the far left, or from the far right?

Let’s discuss!

RSVPs: As the popularity of topics I've suggested is always difficult to predict, I tend not to book the location beforehand. If over three people RSVP by the Thursday before the meetup, I will attempt to book Jeremiah's Taproom, and if they can't accommodate us book somewhere nearby instead.