It’s an undeniable fact: the wealthiest individuals seem to have a gravitational pull on wealth, akin to black holes sucking in every stray dollar within their vicinity. As they amass more riches, the rest of us are left with nothing but a graph to illustrate the ever-widening gap.

Enter the elephant graph, a quirky depiction of global income growth spanning from 1988 to 2008. Dubbed as such due to its resemblance to an elephant (if you squint hard enough and have a vivid imagination), this graph showcases the percentage change in real income across different percentiles of the global income distribution.

Economists Christoph Lakner and Branko Milanovic brought this graph to the forefront in 2013, utilizing World Bank data to unveil the stark realities of globalization’s impact on income distribution. While inequality wasn’t a novel concept, the elephant graph laid bare the starkly uneven distribution of globalization’s benefits.

Picture this: the x-axis portrays the global income distribution, from the poorest to the wealthiest, while the y-axis denotes the extent of real income growth experienced by each segment of the population. Visualize an elephant lifting its trunk: the base signifies the world’s poorest, the hump symbolizes the burgeoning global middle class, predominantly in emerging economies, and the raised trunk? That’s the global top one percent.

Why does this matter? Because it underscores the mixed outcomes of globalization. While segments like the burgeoning middle classes in China and India experienced substantial income growth, those hovering around the 80th to 90th percentile—encompassing many poorer individuals in wealthy countries—saw minimal improvements. And as for the top one percent? Their incomes soared to unimaginable heights, propelling them into a stratosphere of opulence characterized by private jets, mega-yachts, and other extravagances that define their distinct economic reality.

Critics of the elephant graph argue that it overlooks crucial factors like changes in household size or the benefits of cheaper consumer goods brought about by globalization. Moreover, the data only extends to 2008, failing to capture the seismic shifts in the global landscape since then, including the financial crisis, the rise of populist movements, and the COVID-19 pandemic.

Yet, amidst the economic discourse and societal analysis, there are those who simply see a whimsically shaped elephant—a reminder that even in the realm of economic analysis, a touch of humor and imagination can’t be overlooked.

TOPICS: elephant elephant graph