My new essay on this topic has been posted on FOREIGNAFFAIRS.COM at
Here is a summary of the conclusions:
Emerging nations are suspended between being rich enough to have a stake in global leadership, and still often being treated as if they do not. The result is an increasingly aggressive stance by countries from China to Saudi Arabia and Turkey. The people of the developing world are on the move, yet their movements are resented and seen as dangerous, so that instead of being helped they are fenced out. The people of the rich world are themselves increasing resentful and frightful, and voting for extremists and populists who thrive on such sentiments.
Sadly, it would be unrealistic to present simple or easy solutions to these threats. The rich will not easily give up their wealth, nor the will the people of Europe and America, the Middle East and Asia, suddenly find fellowship and understanding. It may take a generation of conflict before leaders and elites recognize that growing inequality is doing more harm than good, and undertake a global cooperative effort to unwind the economic imbalances and nationalist resentments that have now built up for an entire generation.
But nations can start at home. Adopting legislation to provide more opportunities and essential services, as well as affordable basic health, housing and retirement security to diminish the scope and sting of inequality within their own societies, will start to reduce the festering anger within. Such measures are essential to restore the cooperation within nations that will enable them to respond rationally to new challenges.
The combination of diminishing inequality among nations and increased inequality within them has produced anger and aggression, and raised threats around the world. Diminishing inequality among nations will not be reversed. Accepting that fact calls for a wholesale revision of global governance institutions (including better institutions to cope with the inevitably swelling flows of migrants and refugees). The rise in inequality within nations, however, is something that can and should be addressed. Responding more thoughtfully to rising inequality and its consequences, both internally and globally, is essential. Otherwise, the world’s internal politics and international relations will become ever more extremist and more dangerous.