Well I see one simple explanation for this. By simple, I mean short, rather than uncomplicated.<p>It&#x27;s easy to move capital, but it&#x27;s hard to move labour. That&#x27;s the world we&#x27;ve built.<p>So what are the main conclusions?<p>1) The very wealthy are much wealthier
2) The somewhat wealthy are no better off
3) The formerly very poor are now much less poor.<p>Why would that be?<p>If you&#x27;re a business, you can move your production to China (of course that gap has moved in a lot over the years). So as the owner you reap the profits of mobile capital.<p>The poor folks in China benefit as well, as they now have better paying jobs utilising the moved capital. They benefit a lot, but actually they would be better off if they could participate in the Western labour market. They can&#x27;t just come here, so they make do with what opportunities they have. By experience a fair few of these people are just as useful as anyone in the West, but that&#x27;s how the world is built.<p>The &quot;somewhat wealthy&quot; are the Western middle class. They don&#x27;t own the capital, the best they can do is hold on to some of the managerial roles if they&#x27;re upper middle, or lose their jobs if they&#x27;re outsourced. Since the firms are more profitable having moved production, the managers can do allright, but they&#x27;re not all buying yachts. The factory workers in the West are a bit buggered. They whole point of moving is to avoid their expense. A lot of people have had to find new things to do.