This morning I had a discussion with ChatGPT that converged in this chart comparing GDP per capita growth and income inequality (Gini index) over the past 45 years for eight countries — the US, France, Japan, China, India, and three from Latin America: Brazil, Mexico, and Argentina. I did not check every single data point and sources, but ChatGPT promised it triangulated Gini income inequality numbers, which is the best available data over the time period even though it underestimates inequality at the top of the scale (top 0.1% and more).
Some things I expected. Others surprised me:
1. The magnitude of China and India’s growth dwarfs not only the West but also Latin America. We all know about China’s rise, but seeing it plotted against others really drives home the scale. India’s path is slower, but still exponential relative to peers. One has to wonder — why didn’t Latin America see a similar lift-off?
2. Latin America’s turbulence is real — but Brazil stands out. The region’s boom-bust cycles and “lost decades” (different ones for each country) are clearly visible. Yet Brazil shows a relatively successful arc: real growth and declining inequality from 2000 to 2014. The post-2015 reversal shows up just as clearly.
3. In the developed world, for all the detailed contrasts, the big picture is simple: the US grew a bit more, and inequality rose a bit more. France and Japan appear more stable, both in GDP and Gini. The differences in policy models matter — but at this level, the contrast is more of degree than kind.
These are just the observations from the chart. But here’s my interpretation of what’s behind the scenes:
China and India grew with a strategic mindset — while Latin America trusted the invisible hand.
Both China and India pursued growth strategies that were, in different ways, guided by the state. China built special economic zones, controlled capital, moved labor from farms to factories, and sequenced reforms. India liberalized later but protected key sectors and built out capacity in education and services.
Latin America, in contrast, liberalized early and rapidly under the influence of the Washington Consensus. Old industrial policies were discarded but not replaced by forward-looking alternatives. Faith in the invisible hand was strong — but absent institutional depth and long-term strategy, markets alone couldn’t deliver sustained, inclusive growth. The result: cycles of volatility, commodity dependence, and persistently high inequality.
The US, France, and Japan form a triangle of developed-world models.
The US embraced deregulated, finance-driven growth. France leaned on redistribution and public services. Japan built industrial strength through coordination and later struggled with demographic headwinds. Despite these differences, growth has been tepid across the board since 2000.
The US stands out mainly in how much inequality has risen — though the Gini index underrepresents it. It misses wealth concentration, capital gains, and the widening gulf between top incomes and the median. So, the visible “bit more inequality” in the chart is likely a substantial understatement.
Which brings me to a final question: if high debt-to-GDP ratios and free capital flows once made Latin America vulnerable to shocks, could the same dynamics now haunt France and the US — both increasingly in the spotlight on that front? What paths might they take to resolve the tension between growth, fiscal discipline, and social cohesion? And in the process, will inequality be curbed, tolerated… or quietly entrenched?
Curious to hear how others are reading these patterns — or where you think the next divergence might come from.
Original article can be found here.