CAPITALISM'S ACHILLES HEEL Dirty Money and How to

The Global Divide 211
arranged into global quintiles to offer a picture of all the world’s six-billionplus
inhabitants.
The work of several economists has produced a fascinating picture of
global income disparities beginning in 1820 and extending to 1980. Figure 5.1
illustrates the stark two-centuries-long rise in inequality. From a gap of 12 to
1 between top and bottom quintiles in 1820, the gap rose to 35 to 1 by
1980. As one of these writers, Angus Maddison, reported, total output of
the advanced capitalist countries increased 70-fold, population increased 5fold,
per capita output increased 14-fold, average hours worked dropped by
half, and life expectancy doubled. In other words, rich countries soared
while poor countries lagged. 2
In 1994, a United Nations ranking showed that the ratio between the
top and bottom income quintiles of the world’s population was 60 to 1, a
figure that was repeated often in the press. Unfortunately, the tally was far
from accurate. It was made by ranking countries from richest to poorest
based on their average income, then dividing the countries into five roughly
equal population groups, or quintiles. This meant that all citizens of a country
were put into a single global quintile regardless of their actual income,
which may have been much lower or higher than the average. Coming up
with an average income for a whole society is virtually meaningless. Thus, in
FIGURE 5.1 WORLD INEQUALITY 1820–1980
Source: Bourguignon and Morrison, 2002.