The chart above is taken from Branco Milanovic's book The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality, and shows inequality in individual countries relative to the whole world. (Hat tip to City AM's Philip Salter.) The x-axis plots inequality within a country, and the y-axis plots it internationally. Catherine Rampell explains:
For example, trace the line for Brazil, a country with extreme income inequality.
Brazil’s bottom ventile — that is, the poorest 5 percent of the Brazilian population, shown as the left-most point on the line — is about as poor as anyone in the entire world, registering a percentile in the single digits when compared to the income distribution worldwide. Meanwhile, Brazil also has some of the world’s richest, as you can see by how high up on the chart Brazil’s top ventile reaches. In other words, this one country covers a very broad span of income groups.
The data points are collected in 5% ventiles, so it isn't a perfect measure. The richest 0.1% in India is a lot richer than the poorest 0.1% in the US. But it's a helpful way of putting things in perspective, and underlines a point I made a few weeks ago: support for a welfare state in the UK is wrongheaded even if you believe that a welfare state is a good way of combating poverty. If throwing money at people improves their long-run living standards, the left should oppose a welfare state in Britain and want to direct all social spending to the developing world. Dalibor Rohac's Does Inequality Matter? explores this argument in more detail.
As a libertarian I have no similar problem. I want equal freedom for everybody, including free trade and open borders, both of which would be an awful lot more effective at reducing poverty here and abroad. But international comparisons of inequality give the lie to the leftist claim to egalitarianism – otherwise, why do they spend so much time trying to help people who are so well-off?
