For several years now, economists have remarked on the simple yet striking representation of world income growth in a chart by Branko Milanovic. The chart plots relative gain in household per capita income between 1988 and 2008 at different points of the global income distribution, showing that the gains from globalization are very unevenly distributed. Known as the “elephant chart” because it resembles an elephant with a raised trunk, the chart indicates that the lower middle classes of the rich world made the weakest relative gains during the most intense phase of globalization to date. So while those of modest means in wealthy countries may still have more to their names than even well-to-do citizens of developing nations, it’s those lower income Americans, Japanese, and Western Europeans who’ve seen their global standing degrade—this while watching their wealthiest countrymen make gains commensurate with those in economically emerging parts of the world.
In early 2015, Paul Krugman forecast that the trend depicted in Milanovic’s chart would be a “crucial factor in developments over the next few years.”
Cue xenophobia. Cue Donald Trump. Cue nationalism. Cue Brexit.