Adam Smith Institute

A few days ago I was sent an excellent paper from the Investment Bank Goldman Sachs, entitled The Expanding Middle: The Exploding World Middle Class and Falling Global Inequality. It argues that we are in the middle of an unprecedented explosion in the growth of the middle class, and that this trend is gaining pace. By 2030, it predicts that two billion new people will join the world middle class. An argument backed up by other studies (for example, click here and here).

All this comes under the rubric of globalization and has been encouraged by the nascent opening up of the BRIC (Brazil, Russia, India, and China) economies, through the acceptance of capitalism. As such, this is of course highly encouraging, and shows the extreme failure of the command economies that preceded (partial) liberalization.

Of course, as history attests, things may upset this prediction. If these countries revert to the nationalistic protectionism of the past, stark global inequalities could continue to feature. But as things stand, they are heading in the right direction. But let it not be forgotten: The road to poverty is paved with good intentions.

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