Global Turning Points The Challenges for Business and Society in the 21st Century

The global economic, social, and political landscape is being transformed by the growth of social categories such as the middle class and the millionaires. In Europe and the United States these two groups took off during the 1920s, and resumed their growth during the 1950s and 1960s, at a time when Japan joined the trend. Nowadays most of the growth, however, comes from the emerging economies, while the tendency towards greater inequality is resulting in a shrinkage of the middle class in the US and an expansion of the class of millionaires and billionaires. These trends are transforming the global economy and society, creating numerous business opportunities, and also posing serious economic, political, social, and environmental challenges.

The growth of the middle class is one of the most important trends of the last 150 years. However, until very recently, the middle class was the largest social stratum only in relatively rich countries. Over the last 30 years, hundreds of millions of people have been lifted out of poverty in many parts of the world, including Brazil, China, India, Indonesia, Mexico, and Thailand, to name but a few countries. As a result of these changes, the size of the global middle class will soon become larger than the number of people living under the poverty line for the first time in history. Given the values, preferences, and yearnings of the middle class, its rise to global prominence will have major implications for society, politics, and the global economy.

The middle class has been defined in various ways. At the time of the French Revolution, the middle class referred to the bourgeoisie, i.e., the new ascending urban traders, artisans, and professionals, vastly outnumbered by the peasantry and seeking to become politically influential at the expense of the landed aristocracy. In the nineteenth century, Karl Marx referred to the middle class as the petit bourgeoisie, namely, a class between the proletariat (i.e., the working class) and the ruling capitalist class. The sociologist Max Weber echoed this distinction in his extensive studies of social stratification. Hard work, security, and frugality are values commonly associated with the middle class.