UCL Open day- The Economic story of the world in the past four decades

 The Economic story of the world in the past four decades- Dr Ramin Nassehi

"International convergence has overpowered national divergence. Therefore the world has become less unequal"

Have we entered a new world economic (dis)order? Recent Us and China tensions with Trump and his tariffs are unprecedented. This is furthered with the rise of populism within countries. And what the professor named as the rise of: Anti-globalisation, Anti borders, Anti-elite

But How did we get here? Looking at the back 40 years you see that hyper-globalisation has occured due to the free flow of goods and finance(stocks, shares). The growth of world trade about 5 fold over income(gdp), and is attributed to containerisation, easier communication via internet, trade liberalisation. 

Now lets question who are the main beneficiaries of increased income?

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  Figure 1: The growth in divergence of inequality

  
  
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What figure one shows is that, out of 100 pounds u spend, 35 percent goes to rich. In the UK, the top 10% earn about 70k a year with London as themain beneficiary, with roughly 15% going to the top 1%. This class has been pulling away, leading to the rise of populism.

Inequality Between countries inequality gap has decreased. The life expectancy has increased which can be shown through this useful website: Bubbles website. During the 1920s, the average Chinese wage was 20x less than of the US. Now it is only about 3x. This has lead to international convergence, leading to a destabilising effects on the world order. Hence, tension arises. Now Looking at the world as a whole, there has been a shift away from absolute poverty. About a billion people have been lefted from absolute poverty, with the best examples seen in asia.

Figure 3: The reduction in absolute poverty over recent decades

This has been the fastest and largest poverty reduction since the 1900s. Wealth inequality has decreased. The gap has been moving from a bipolar world to a normal distribution. Many Asians enter the global middle class. 

The rich and poor gap in the population amongst countries has increased -> rise of populism

The gap in countries decreasing -> geopolitical tensions

The overall absolute poverty levels decreasing -> rising expectations and potential for instability if unmet

Figure 4: Concluding ideas

Even though this was a basic and introductory lecture, it was still really interesting to see how global inequality has shifted: how the world has become less unequal between countries but more unequal within them. It showed how international convergence has brought progress, but also sparked new tensions, rising populism, and growing divides within nations.