Just four decades ago, the emerging world was characterized by poverty and widespread illiteracy. Today, a significant portion of the global middle class resides in what were once considered poor countries. World income inequality has declined to levels not seen since 1870, and absolute poverty has been substantially reduced. What has led to this rapid development and catch-up? According to distinguished economist Surjit S. Bhalla in his book “The New Wealth of Nations,” the answer lies in the spread of education.
The tremendous increase in college graduates in non-Western countries, along with the remarkable educational advancements of women and the transformative shift in gender roles, play a crucial role in understanding the current mega-trends. This unprecedented development not only fosters global competition and lowers employment costs but also contributes to the sustained low inflation observed over the past two decades.
Bhalla’s book is groundbreaking in its approach. It not only exposes the fallacies in anti-globalization rhetoric often championed by supporters of Brexit and Trump but also identifies a significant gap in current wealth inequality measurements. Through a compelling presentation of arguments, anecdotes, studies, calculations, tables, and charts, Bhalla emphasizes that education is the new wealth, surpassing financial wealth in magnitude and being more evenly distributed.
While acknowledging the remarkable progress made by the developing world, “The New Wealth of Nations” also examines the downsides of the educational and technological explosion. Bhalla suggests that both rich and emerging countries must consider options like basic income and negative income tax to shape a new welfare order suitable for the rapidly changing 21st century. This forward-looking approach aims to address the challenges and opportunities brought about by the transformative power of education and technology.
