Homi Kharas, senior fellow at Brookings Institution, discusses the changing character of the world's middle class and its impact on shaping the world. He also explores the implications of becoming middle class, the role of the middle class in climate change, and the potential effects of AI on this socio-economic group.
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Quick takeaways
The expansion of the middle class globally is driven by technology, politics, and globalization, with technology creating a demand for a healthy and educated population and politics supporting and benefiting the middle class.
The middle class shapes our world not only through politics but also through its influence on the business sector, media, and government, pushing for corporate sustainability, elevating issues through viral trends, and driving collective action on global challenges.
Deep dives
The Growth of the Global Middle Class: A Result of Technology and Politics
The expansion of the middle class globally has been driven by technology and politics. Technological advancements, such as those seen during the Industrial Revolution, created a demand for a healthy and educated population, resulting in a rise in wages and the emergence of the middle class. Politics, including democratization and labor unions, have also played a role in supporting and benefiting the middle class. Additionally, globalization has accelerated the speed of middle class expansion, with large countries in East Asia and South Asia driving the growth.
The Changing Nature of the Global Middle Class
The emergence of China's middle class has revealed a split in the global middle class. While the middle class in the West has experienced increased anxiety, the growth of China's middle class has been substantial. However, this shift in global middle class dynamics has led to uncertainties and concerns among middle class populations. The multi-polar world and increased rivalry and contestation contribute to this change, but also provide an opportunity for global collective action.
The Influence and Impact of the Middle Class
The middle class shapes our world not only through politics but also through its influence on the business sector, media, and government. The middle class pushes for corporate sustainability, influencing businesses and capital markets to prioritize sustainability. They also impact media by elevating issues through viral trends. The middle class's influence is vital in driving collective action on global challenges, as they have a stake in addressing existential issues that affect them and their communities.
The Middle Class and the Need for Sustainability
The global middle class plays a significant role in shaping our environmental impact. Their consumption patterns, such as demanding cheap goods and travel, contribute to carbon emissions and waste. The middle class's appetite for consumption poses a danger to itself, as it is responsible for much of the man-made impact on the environment. To address this, a shift towards sustainable choices, such as renewable energy and reduced waste, coupled with government regulations and incentives, is necessary to mitigate the environmental impact of the middle class.
Co-host Janet Bush talks with Homi Kharas. Kharas is a senior fellow in the Center for Sustainable Development at the Brookings Institution and also cofounder of World Data Lab. He studies policies and trends influencing developing countries, the emergence of the world's middle class, and global governance. He's collaborated with the McKinsey Global Institute on research into consumers in emerging markets and economic empowerment, and his latest book is The Rise of the Global Middle Class: How the Search for the Good Life Can Change The World.
In this podcast, he covers topics including the following:
How the character of the world’s middle classes is changing