The Elephant in the Room: Global Inequality and Web3's Potential
The elephant curve reveals a blunt reality: inequality is stark reality in the global economy. I couldn't help but wonder if Web3 could help bridge the gap between the wealthy and the struggling. Here's what I discovered. The Elephant Curve chart, created by economist Branko Milanovic, tracks global income growth from 1988 to 2008. It shows two peaks: one for the growing middle class in emerging economies like China and India, and one for the ultra-rich. The dip, or "trunk," shows the struggles of the working and middle classes in developed countries.
In the late 20th century, globalization took off with trade liberalization, new technology, and companies moved parts of their production or services to countries with lower labor costs. This reshaped the global supply chain. Developing nations thrived, creating jobs and lifting millions out of poverty. But in the U.S. and much of Europe, the middle and working classes struggled as manufacturing jobs disappeared, wages stayed flat, and economic security declined. It appears that Sweden's experience with the elephant curve reflects increased income inequality driven by capital gains at the top.
Why care? In short, economic imbalance in society has led to the political and social unrest we see today. Populist movements are increasing, and we are now aware that globalization may not be fair. We need to be vigilant to create a better world.
I thought we had learned something, but the updated elephant curve data, extending to 2016, shows otherwise. After 2008, income growth in emerging economies slowed, and inequality at the top only worsened. The ultra-wealthy aren’t just taking bigger slices of the pie—they’re baking entirely new pies. Between 1980 and 2016, the top 1% captured over 27% of global income growth, while the poorest half of the world barely saw 12%. It’s clear that progress hasn’t been shared equally.
Regionally, the global middle class saw mixed fortunes. In East Asia, rapid industrialization fueled rising incomes, while regions like Sub-Saharan Africa and Latin America saw stagnating growth. In advanced economies, the middle class continued to hollow out, with wages often failing to keep up with inflation. Looking ahead to 2050, researchers warn that inequality could either deepen or lessen, depending on the policies we choose today.
I wonder, will economic divides widen, creating a world of prosperity for a few, surrounded by growing discontent? What to do?
Here’s where I see Web3’s true potential. I won’t dive into the usual buzzwords like decentralization, transparency, or community ownership—you know the drill. Web3, the decentralized internet built on blockchain, offers a chance to rethink our economic systems. Unlike today’s internet, controlled by a few powerful corporations, Web3 promises a fairer, more equitable future. Beyond cryptocurrency, Web3 includes DeFi, DAOs, NFTs, and new ways of managing digital ownership, all aiming to break the control of banks, governments, and big tech. Oops, I guess I slipped into the basics after all. I have a distinct feeling that I need to mention memecoins.
I think Trumpcoin and Fartcoin are both a way to gamble but also an urge to try to beat inflation and rising costs. Remember, we live in an era when traditional investments feel inaccessible for many, memecoins invite newcomers into the fight for financial opportunity. At their core, memecoins embody Web3's inclusive values: anyone with internet access can participate. However, the reality is often harsher. The general sentiment is that 70-80% of memecoin investors lose money due to high volatility, scams, or poor timing. For every success story, there are many more of financial losses, often felt most by those who can least afford it.
Anyway, Web3's promise of inclusion raises another crucial question: Could it unintentionally create a technocracy? This is a world where those with early access, technical expertise, or control over blockchain infrastructure hold disproportionate power. The National Bureau of Economic Research shows that the richest 1% of Bitcoin holders control more than 27% of the total supply. This is mirroring traditional financial inequalities. We want to move away from that right!? Similarly, DAOs, while promising on paper, often see decision-making concentrated among a small group of highly engaged or wealthy participants. So, what world are we creating here? The same?
Decentralized finance (DeFi) could open up access to capital, especially in areas with limited banking services. DAOs enable communities to make decisions together, bypassing centralized authorities. Meanwhile, NFT technology has the potential to revolutionize intellectual property rights, giving artists and creators unprecedented control over their work. This is just the beginning of what Web3 could unlock.
But as we build this new system, we must ask: Who benefits? To me, it seems that we are merely replicating the power dynamics of the old system in a shiny new technological wrapper.
To make sure Web3 benefits everyone, we need intentional action. Policymakers must create regulations to protect newcomers from exploitation, developers need to prioritize equity in their designs, and communities must hold power accountable to stop wealth from concentrating. Only then can we unlock Web3’s true potential for all.
We must ask: How can innovations like Web3 help create a fairer economy? Yes, it can—if we ask the right questions while building it. We need to have that conversation.
That’s why I created the Proof of Good Pledge. By signing it, you can join the movement, get rewards, and be part of the solution. Because to me, the elephant curve—where the gap between the haves and the have-nots keeps widening—feels less like a warning and more like a prediction already coming true.
If you're ready to make a difference, sign the pledge and let’s start shaping a fairer future together. Join the conversation here.
