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Public Culture 12.2 (2000) 375-409

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Lived Effects of the Contemporary Economy:
Globalization, Inequality, and Consumer Society

Michael Storper

It is now commonplace to refer to such diverse phenomena as globalization, increases in economic inequality, the decline of class-based societies, the intensification of consumerism, and global cultural homogenization as though they were all part of the same problematic. Indeed, all these elements seem in various ways to characterize our experience of the current era. Yet their connections remain obscure. There is little consensus about how significant the recent increases in income inequality are, and even less over their relationship to globalization. Beyond this, those who call attention to growing inequality have a difficult time explaining the absence of organized discontent in the political and cultural spheres. Those who associate globalization with a loss of diversity--a deepening massification of Western culture--are at a loss to account for the stunning new variety and rapid change in the outputs of knowledge-based capitalism.

It is difficult to confront these associations in any structured way because the phenomena they refer to remain the preserves of specialized academic fields. Each such field documents a piece of the bigger picture, and as a result we remain unable to account for seemingly contradictory aspects of the contemporary experience. If our standard for the analysis of growing income inequality is limited to the distribution of money income, for example, we will find it difficult to understand why, in the real world, people do not seem very upset about it.

One way to understand the connections between what economists say about the economy and how the rest of us feel and act in relation to it is provided by the [End Page 375] concept of consumption and its corollary in the cultural sphere, consumerism. Many of the political effects of globalization--what is regretted, what is celebrated, what meets with passivity--that seem contradictory when viewed in either exclusively cultural or economic terms can be understood in terms of the relationship between globalization and the evolution of consumer societies. But beyond this, I will argue, the rise of consumerist identities helps explain the economic processes of globalization--most notably, the diffusion of labor-saving technologies--which in turn are responsible for much of the recent rise in inequality. These linkages do not appear in standard analyses.

This essay's reasoning is drawn primarily from economics, with elements from other disciplines brought in as needed. Although I have made every effort to keep technical language to a minimum, I have found it helpful in places to situate my analysis within this well-developed literature in order to identify the mechanisms that can link globalization and inequality.

Income Inequality and Globalization

Increasing Inequality

Income inequality has increased in most of the major industrial countries of Western Europe and North America, as well as in most of the middle-income developing countries, over the last twenty years, a period that has also witnessed unprecedented growth in world trade. The degree of inequality increase has shown some variation: highest in the United States and Britain, lower in most of the economies of continental Europe, still lower in Scandinavia (Crafts 1998; Johnson and Webb 1993). Whether measured by the Gini coefficient or by the ratio of the income of the lowest 20 percent to that of the highest 20 percent, the trend is similar (Krugman 1992; Krugman and Lawrence 1993; Hanson and Harrison 1994; Katz, Loveman, and Blanchflower 1995).

In virtually all the major developed economies, moreover, a major component of growth in income inequality is the extraordinary growth of income at the top. We can summarize the facts roughly as follows. The top 20 percent or so of the population has seen very rapid growth in its real incomes and shares of total income. Within this group, the income share of the top 1 percent of U.S. earners has more than doubled since 1979 (Frank and Cook 1995). In 1979, the ninety-fifth percentile earner received ten times as much as thefifth, but in 1995, the...


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pp. 375-409
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Archived 2004
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