'Extreme poverty' to fall below 10% of world population for first time
theguardian.com
theguardian.com
http://www.nytimes.com/2015/10/01/opinion/nicholas-kristof-t...
"One survey found that two-thirds of Americans believed that the proportion of the world population living in extreme poverty has almost doubled over the last 20 years. Another 29 percent believed that the proportion had remained roughly the same.
"That’s 95 percent of Americans — who are utterly wrong. In fact, the proportion of the world’s population living in extreme poverty hasn’t doubled or remained the same. It has fallen by more than half..."
We are seeing global inequality fall to unprecedented lows. If you're in the top 5% (which the American middle class definitely is), then less inequality feels bad to you.
Global wages growth is quite high, it's just happening in places that need it way more than rich westerners do, as much as that sucks for rich westerners.
This won't last forever, because as those places get richer their wages go up, and "low wages" is their primary competitive advantage.
In my opinion this is a clearly a good thing as their are many more low skilled people in poor countries and they are much much poorer. So a few hundred million forego raises to lift more than a billion out of abject poverty. Seems like good deal.
Is that wage stagnation not adjusted for inflation?
I'm also not sure that I fully believe the inflation numbers. It's not necessarily that I think they're fraudulent, but I don't think the methodology for calculating inflation has caught up with reality. The models I've seen assume inflation to be consistent across the economy, which may have been largely true in the 20th century but is true no longer.
The problem is that inflation since the early 2000s has been extremely uneven. We've had massive deflation in some areas, like manufactured goods. But necessities -- especially real estate, health care, and college tuition -- have almost hyper-inflated.
You can go without gadgets and toys but not without food and a place to live. We've had near-hyperinflation in necessities but it doesn't show in the stats because the stats average those numbers in with the deflationary numbers you get if you look at TV sets, appliances, and computers.
Real estate is utterly insane. I cannot even comprehend how it can possibly be so high. How can you have a market for real estate at these prices? Who's buying it and what parallel universe of limitless wealth do they come from?
I'm not talking about areas like the Bay Area, which has peculiar circumstances at work, or always-hot areas like Manhattan. There will always be "bubbles" of high prices vs. the rest of the market. If you look across the average of the market, real estate is crazy when compared to wages. I suppose it may be a function of historically cheap money causing larger home loans and jacking up prices, but it's essentially locked anyone out who isn't rich or willing to sign up for a crazy mortgage.
There is no way around this. If everyone wants to live as close to (say) Times Square as possible, that land will be expensive.
But you don't have to enter that zero-sum rat race. There are lots of places to live that aren't the only places the very rich want to live. They still enjoy decent schools and low crime.
Some college education is positional, too. If you want "Ivy League Education" for your kid, well, there are just about as many slots as there were 30 years, but a lot more rich people, so the price will get bid up to infinity. Here the real shame is that the non-gold-star educational system is still getting more and more expensive, for many many reasons.
Real estate and colleges are often positional goods - you can spend as much money as you can afford to live in a nicer house than your neighbor, or go to a better school than other job applicants.
Health care and college tuition are victim to increasing efficiency in making things like manufactured goods. If you're ambivalent between apple farming and practicing medicine, then the price of 2 hour doctor's visit is going to be approximately buyable with two hours of apple farming. And since apples per farmer is going up faster than apples per dollar, the cost of health care is going to increase over time relative to other goods.
College loans and mortgages are the debt society has decided it has to pay in order to fund retirement. There really isn't another way to save on a long enough timeframe for enough people (unless you're Norway, and you can just decide to sit on oil reserves). If you make things, they fall apart, become outdated, or require ongoing maintenance - either way, when society stops making them, they stop having them. They can trade these things for promises to make them later, which basically works.
From what I've read, the wealthy across the globe, especially from corrupt or unstable countries, are parking their money in stable Western real-estate. Some of it they proceed to rent out.
Anglo countries are particularly vulnerable since their real-estate taxation regimes hit buildings and improvements so heavily compared to raw land-value.
Is it? I've been looking at places that aren't the coast recently and was shocked to find how much house you can still get for $300K in most places.
What do middle-class people do with the rest of their money when they can buy a house with $300K?
The job hunt is a little harder(going through it now), but not that much harder.
https://en.wikipedia.org/wiki/List_of_Metropolitan_Statistic...
There's lots of nice places in the top 50 of there that aren't crazy expensive.
Energy, food, and housing costs have increased. Electronics, especially on a capabilities-based scale, have become profoundly less expensive, though when factored into the end-use impacts (communications, information, entertainment), the cost reductions are far less substantial.
Healthcare is another area in which exceptional inflation has lead to only modest improvements in overall outcomes, particularly life expectancy for those already receiving good results: white females and males. Much of the improvement in health outcomes in the US since 1970 has been focused on bringing minority populations' standard of care and health closer to that of privileged majority populations. Not that this isn't a good thing, but it's different from saying that the _overall_ improvements in delivery have been evenly distributed.
How to lie with statistics and all that.
The liberal rhetoric that paints a picture of a world full of poor people being sacrificed so that the rich can buy more private jets also contributes.
I don't have numbers on it, but would love to know if any studies have been done. My hunch is that, at the lowest levels of income across the planet, actually "needing money" to survive probably hurts their livelihood more than it helps.
Of course, you can't really justify such a thing if you're trying to make a rational argument.
Lying is one of the most insidious form of harm one can inflict on another human being - poisoning their ability to reason about the world. Lies add up, and also deal recursive damage - people spread them believing they've been told the truth, and spread inferences based on them.
Lies should never be treated lightly and excused with trivialities.
A baseball bat to the head is far more harmful than most lying.
And I mean lies from both sides - from those who will sell you the sugar pill and from those who represent the medical world and by lying and bullshitting made it hard to trust it.
Lies are toxic and accumulates in society. In an increasingly complex world that depends on mutual trust between people and organizations, this is an existential threat. I think that what's most likely to end our civilization is not war or disease, but this bullshit 'the world runs on' spilling over and drowning us all.
I mean, look at the current state of science. At this point I think it's safe to assume that most (like 90%+ most) of recent soft science results is bullshit, and probably most of medical research is wrong too. And it all starts with some scientists fudging results, and then other believing them and building on wrong research. Pretty scary thing - it seems like we have so much, but in fact we have very little reliable results, and it's getting harder to tell the right from the wrong apart.
Only in the short term. In the long term, lies undermine your confidence, destroy your relationships, ruin your reputation, and can make you completely cynical about the world around you.
There's certainly a set of lies that each culture has deemed acceptable, but acceptable is not the same as harmless.
Well... yes, there is? In a situation where the facts are reasonably clear, such as this one, the "high ground" would be the one that's most in alignment with those facts.
Global poverty is both complicated, and isn't as bad as it used to be. There's no need to pick one or the other.
My response to this is not to lie myself, or to myself... too often. b^) My response is to assume that everything I hear from everyone is bullshit, unless the source has obvious interests in telling the truth, and until I can confirm the story through other means. What choice do I have? I'm from Missouri.
Also it seems that many fans of "truth" have a hard time dealing with any truth that happens to be somewhat subtle.
See also "The Iron Law Of Bureaucracy."
The point of the survey is that 95% of Americans thought things were getting worse or staying the same.
Regardless of what metric you are using, they are dead wrong. Things are getting much, much better. You are arguing about the specific definitions and qualifications of the terms. You are ignoring what the results of the survey are actually saying about the perception of Americans.
(I'll give you a hint: more than half the world's present population lives on less than $5 PPP per day, few of them by choice, and it's not the richer countries where the rapid population growth is happening)
If you think people earning as little as the equivalent $5 of US-equivalent purchasing power per day are extremely poor[1], that's more[2] people in extreme poverty than there were in the 1990s, despite all the incremental improvements to poor people's average incomes across the developing world and stark improvements in a few rapidly-industrialising regions.
Where you draw the line matters. And the survey, notably, didn't draw a line. I'm the last person to defend Americans' knowledge of world affairs, but their belief that poverty is actually getting worse in terms of absolute numbers of people subject to it is not unreasonable.
[1]which isn't exactly an unreasonable point of view for anyone used to earning more than that per hour even whilst on minimum wage, even if there's a lot of people in developing countries on that level of PPP-adjusted income that think they're doing pretty well compared with their neighbours. [2]edit: having had a play with the World Bank's model, it suggests that you end up with more people in poverty in 2012 than the early nineties if you set your threshold for extreme poverty somewhere between $5 and $6 per day of US purchasing power. The number of people below that threshold in sub-Saharan Africa - where much of the poverty relief narrative has focused - has almost doubled.
Now it's a fair point, we can argue about the definitions of income all day and change definitions and have different answers that may not be very meaningful, I agree with you there. But just look at one indicator of poverty which has much less ambiguity as a statistic: child mortality under five. Kids who die, there's not a lot of room to juggle with definitions or semantics here. It's caused by societies with deeply entrenched poverty, societies that due to their poverty struggle to provide adequate healthcare, food, clean drinking water, education to parents, safe living environments etc etc. And if we look at child mortality, it more than halved since 1990, despite a much bigger population. It's now around 16 thousand per day, an astonishing number, but think about what it means, it means compared to 1990, about 6 million people (a holocaust-scale parallel is easily made) do not die every single year, year after year, that did die in 1990. That's an insane achievement and it's contrary to our public sentiment that looks at Ebola and ISIS and thinks the world is on fire and on the decline, when it's never been better. There are many more of such statistics we can look at, and they're not all expressed in some definition of poverty that changes to suit our desires. We also measure poverty in things like literacy rates, in things like the proportion of the population that has access to a toilet, or electricity, or a loan. Across the board the improvements are substantial, obviously never good enough and perpetually unable to meet our desire to solve every problem yesterday, but in the context of enormous challenges the progress we're seeing on tons of development indicators is truly inspiring and optimistic.
When around half the world's population's weekly purchasing power is, according to official World Bank approved statistics, equivalent to the purchasing power an American obtains after a five hours work on federal minimum wage[1] I don't think that Americans are unjustified in not knowing the "correct" conclusion that numbers or proportions of people in extreme poverty have "nearly halved" in recent years. If you think the unspecified extreme poverty bracket ought to include the ~50% of the population still stuck at $5 per day, it would have been literally impossible for the proportion of people in that bracket to have already halved in recent years.
I'd have accepted that it might appear a bit ridiculous for them to think that extreme poverty had doubled - especially given that it is so pervasive - except... they could have been inferring it from a doubling of "extreme poverty" reported in some studies focusing on their own country[2]. I assume results of papers like this get more mainstream coverage in US media: http://npc.umich.edu/publications/policy_briefs/brief28/poli... So perhaps some Americans don't think the world extends beyond the boundaries of their country; perhaps as you suggest they guessed on a multiple choice question based on having seen lots of reports on epidemics and war in the news. As I said, I'm the last person to defend the wisdom of Americans or any other type of crowd. But frankly, it's no less ignorant to insist that everybody should know "extreme poverty has halved" when the basis for that "fact" is predicated on the assumption that people earning $1.30 a day no longer qualify as extremely poor, even if other factors like working conditions have got worse. They're certainly right not to take that stat at face value.
We know medicine and access to it is getting better and that's having effects in lives saved. We know some of the GDP per capita increases are trickling down, even though our methodology for estimating how that affects the base of the pyramid is necessarily imperfect. But I don't think we're anywhere near the level of confidence of sustained global reduction in absolute poverty - as opposed to amelioration of its most acute symptoms - to be in a position to start celebrating how few people are really poor, never mind criticising the public for not being aware of it.
Not when - I really can't stress this enough - most of the world's population still have to survive for a week on the notionally equivalent purchasing power of an American working less than a full day's shift at Walmart.[3] That proportion certainly hasn't "nearly halved" and it's really not stupid or ignorant to think that the label "extreme poverty" could still apply to all those people
[1]if you believe PPP calculations, which are inadequate for this sort of thing since the weighting basket tends to include luxuries and so doesn't account for how cheap food and living has to be in most of the developing world. But again I don't think the inadequacy of measurement detracts from my point about poverty statistics being very much open for debate. [2]using a different World Bank definition of extreme poverty. [3]It's not that there's no validity to arguments that these people aren't extremely poor; I just don't see any reason why the argument that some of them are not should form the basis for widely accepted "facts". I've met people on that level of income in developing countries I wouldn't consider extremely poor of course. Then again, I've also met people literally killing themselves to earn $10 a day who I wouldn't consider anything other than extremely poor, even after accounting for it being considered a good income locally. Adjusted income-based measures of poverty don't really have anything going for them other than relative convenience.
In short, the claim that poverty is getting worse is utter bullshit. It requires either climate-change-denialist levels of willful ignorance, or a xenophobic definition of "poverty" that only counts people living in your own much-richer-than-global-average country.
In which case you are no longer measuring poverty. You are measuring inequality.
If you define poverty as never knowing if you will have enough for the next meal then the $2 cutoff is again probably fairly irrelevant.
If i remember correctly, a 1981 $1 is now worth $2.50 if you factor in inflation so the fact they've chose to lower the bar at $1.90 reeks of politics.
However, according to your own analysis of the poster's source, the absolute number of people in poverty has increased a lot.
>In short, the claim that poverty is getting worse is utter bullshit.
371 million more people in poverty is not "getting worse"?
You're implying that your baseline scenario is a constant absolute number of poor people in the world.
But that scenario is not really constant. If things are getting neither better nor worse, the children of the poor are as poor as their parents, and the absolute number of poor people keeps climbing.
If nothing got better, the number of additional poor people would have been at least 611 million, and that is an under-estimate because poorer people have higher fertility rates.
So yes, "only" 371 million more people in poverty necessarily means things are getting better, when sheer demographics without economic growth would have pushed the number 2x higher.
One example is that the US Census Bureau's reporting of poverty statistics based on income has changed to NOT include the income of many benefits including food stamps and the Earned Income Tax Credit. If you include these benefits prior to counting the poor, the poverty rate falls to nearly zero.
This is why the director of the Census Bureau's report now answers to the White House instead of the Director of Commerce. Bending the numbers is essential to maintaining and expanding institutions.
The switch was made when Obama nominated Rebuplican senator Judd Gregg as Commerce Secretary. Given that Gregg had previously voted to abolish the Commerce department, it is likely that his influence would have brought the numbers in line with the facts. But, had Gregg accepted the nomination, it would have opened up a senate seat that would have been filled by the Democratric governor of his state. So to have his cake and eat it too, Obama took control of the number reporting. Gregg did not accept the nomination.
Talk about accounting tricks.
Another example is the disparity between counting income vs. consumption. Again in the US, when the money spent by poorer classes that are studied is counted it is far greater than what is calculated as their income (which is what policy is based on) This indicates that in-kind gifts and other non-reported income is substantial, but not counted.
The lowest version you can get from that table is 11.8% - if you remove medical out of pocket expenses from the income subtractions before calculating the rate (in other words: if you assume people are perfectly healthy, directly contradicted by evidence, you get a more favourable number of how many people can afford to put food on the table).
I'm curious what elements you'd add/remove to the SPM to get to "nearly zero".
[1] http://www.census.gov/content/dam/Census/library/publication...
The 33rd percentile of expenditures on food, clothing, shelter, and utilities (FCSU) of consumer units with exactly two children multiplied by 1.2
http://www.census.gov/hhes/povmeas/methodology/supplemental/...
So if you were to reduce the income of everyone from the 34th percentile downward to exactly $1.24/day you'd actually reduce supplemental poverty.
In fact, it specifically says that the definition has not changed.
It does claim as you do that the rate should be near zero, but it does not address the Supplemental Poverty Measure, that does provide a number of scenarios accounting for benefits in kind, and does not end up with numbers near zero when that is taken into account.
A good example is in medications. Lots of people go off medication because they feel better. But they feel better because of the medication. So they no longer feel better after they go off it.
Similarly, if all poverty reports in the US included benefits, many conservatives would say: see, we have no more poverty. We can get rid of these programs. But these programs were why we had no-one under the poverty line. We now have poverty again.
But I don't think the census should be a political tool. If a person did not, in fact, spend a decade living in poverty thanks to the resources she had (either earned or given to her), why should the census report show that she lived in poverty?
In the end a lot of 'government assistance' really lines other peoples pockets and only indirectly assists the poor.
But you are right. Poverty is an accounting trick for everyone depending on how it suites those who are calculating it. In reality it is a hard thing to measure. But even the back of the envelope calculations would show that Poverty is substantially lower in India, China and many other countries which are known to be very poor.
I.e. if a worker gets $5 in salary and $5 in welfare subsidies, it is somewhat dishonest to argue that because his income is only $5, the welfare subsidies are insufficient.
It's the net income after taxes and transfers that should be looked at when considering poverty, not pre-tax pre-transfer income (which quite astonishingly seems to be used fairly often).
http://www.aljazeera.com/indepth/opinion/2014/08/exposing-gr...
So just a bit playing with the data seems to imply that the claim of a strong reduction in global extreme poverty seems to be warranted. (This is certainly not a sciency study...)
The numbers then does show increasing absolute numbers of poor until 1999, and then a decline getting to slightly below 1981 levels in 2011. As percentage of the worlds population it looks a bit better.
[1] This version uses 205 PPP: http://iresearch.worldbank.org/PovcalNetPPP2005/index.htm?0
Why not use some stuff like infant mortality or literacy or deaths from starvation or deaths from communicable disease? You know, stuff that actually indicates whether someone is impoverished or not.
No, because the poverty lines are all expressed in inflation-adjusted dollars.
Why not use some stuff like infant mortality or literacy or deaths from starvation or deaths from communicable disease? You know, stuff that actually indicates whether someone is impoverished or not.
Those measures are all improving dramatically too.
I don't understand this, and they don't explain. What is PPP, if not "real terms"? Plus I hate it when somebody makes a claim like this without actually showing the numbers, or creating a graph - it makes the claim less plausible than what they are complaining about.
Otherwise the article has valid points, mostly about watering down goals, and the lack of real progress in poverty reduction.
Note also that the OP is about the poverty rate, not about poverty being in decline, which is in fact increasing all too quickly.
Clicking the first two inflation calculators I found on Google and assuming their numbers are right (they both gave the same result), it does seem that if they had inflation adjusted the number using US rates, the original USD 1.02 should have been USD 1.37 by 1993.
EDIT: It's of course important to keep in mind that inflation rates are different across the world, and presumably the world bank at least will insist that they accounted for real term price changes for the relevant goods, so I still don't know how relevant this point in the article actually is.
So I'm not sure how this constitutes a "trick". You'd have to move those people directly out of extreme poverty over the $5.00 a day in your article in order to drop the number of people in poverty.
It's still frankly an improvement to move such a large number of people up the poverty scale. I'm sure i'd rather be living on $4 a day rather than $2.
There is no possible way I could think of how poverty could have increased. If we just look at China an India which is home to 33% of world population extreme poverty is down by 50% in whatever way you measure it.
Without such objective analysis of basic sustenance, fudging numbers is trivial.
http://blogs.worldbank.org/developmenttalk/international-pov...
I guess there is lots of room to quibble over how objective it is, but it is at least starting from the idea of doing an objective quantative analysis of the issue.
- percent of people who can afford 2,500 calories of food and 60 grams of animal protein a day (where afford has some standard definition, such as can pay for the consumption using less than half of their income).
- percent of people who have access to clean water
- percent of people with indoor plumbing
- percent of people with access to electricity in the home.
- percent of people who can access and afford 500MB of internet data a month
It is impossible to know what "$2 a day" actually means. The number gets adjusted for purchasing power, but there is an infinite amount of room in that calculation for governments to fudge the data. Many people in the third world can afford a cell phone, but not afford enough protein in their diet, does that mean they are richer or poorer than someone one hundred years ago without a cell phone but who can afford meat? There is no objective way to answer that question. Since I do not know all the subjective decisions made in doing the purchasing power adjustment, the ultimate number tells me nothing.
This number is actually measured, because it is target 7.C of MDG(Millennium Development Goals). Lots of data at http://mdgs.un.org/.
Summary is that we are doing very well on this number. In 1990 it was 76%, now it is 91%. In the absolute number, 2.6 billion people gained access to clean water in the period.
(I'm not a vegetarian or anything like that, it's a serious question)
I don't think I'd include Internet access in any definition of 'extreme poverty'.
I'd love to hear the counterpoints, but I just can't imagine a farmer needing internet access to live a comfortable lifestyle, as opposed to clean water and electricity, which is necessary.
In general, a lot of extremely poor people in urban areas suffer more from the lack of predictable time slots than lack of money. When doing multiple temporary jobs with flexible hours, adjusted at a moment's notice, you can't really plan anything ahead. You barely have enough time to do groceries, let alone pick a shop that has a given item cheaper, and forget about any service that requires an appointment. Internet access solves a lot of these issues by allowing you to do things a) at random hours, and b) without having to physicly go somewhere.
Also on-line ordering usually gives you cheaper everything; hell, even groceries may be worth getting delivered if it frees up a time slot during the day that could be better spent taking care of something else, or even playing with one's kid.
Then there are things like Craigslist and other benefits of instant, pretty much free long-distance communication. One could list on and on. But the main point is - in all but the few least developed countries, Internet access can give huge quality of life improvements to the poor.
But I certainly agree that it doesn't play any part in the definition of 'extreme poverty'.
Why should giant corporations buying the farmers products have access to nearly limitless amounts of information, while the farmer is relegated to maybe an industry periodical and the local cafe gossip. That worked before the 1900's, but these days information moves too quickly.
So yes, I think Internet is probably not quite yet essentially a basic need to participate in the economy and society - but it's pretty damn close. And it's only going to continue to get more important as "old world" services are turned off in favor of those on-line. In my lifetime I will see the DMV close it's last in-person renewal desk. And the private world is already there in requiring online-only transactions to do certain forms of business.
Of course you're none the wiser from my comment. It was a question (admittedly not bluntly phrased as such): what objectively constitutes "poor"?
Many in this thread decry the fudging of numbers in the discussion; I'd like something objective which can't really be fudged.
ETA: following another posters' suggested link, seems the WB admittedly arrived at that $1.90/day number by averaging the declared poverty lines of low-GDP/capita countries. That's not the quantitative objective analysis I'm looking for.
For all the antiglobalization sentiment, I can't imagine this happening without globalization. If the workers of the developed world had put an economic moat around themselves and preserved their trend in rising purchasing power and had wages increase undeterred by labor competition from both shipping jobs overseas and allowing mass immigration of unskilled labor, we'd not have seen these improvements and those places, given the pop growth they experience over the last sixty years, would have been severely more impoverished.
I think you're being a bit pedantic, though. The absolute number of those living in poverty can change with the stroke of a pen according to an arbitrary definition, sure. My interpretation is that the point of the article, and the thing that should be celebrated, is that life is on average getting better for the world community (even if only according to one metric).
I'm sure the data scientist in all of us wants to see "well-being" broken down by vertical. For one, I'm sure the data you're looking for exists, is likely accessible, and it would be intellectually satisfying to our curiosity (who wants to do the legwork? :)). Two, I'd be skeptical of the assumption that they'd show anything but a trend in the same direction (though maybe not all at the same rate).
[1] "sustainable" as in one can live indefinitely unto a normal lifespan, assorted diseases & incidents aside; don't confuse with "green" energy & resources.
'Poverty' is a rather broader definition, including issues like housing affordability, decent food variety, access to secondary/higher education, perhaps life stability (for example, no access to permanent employment).
https://en.wikipedia.org/wiki/Extreme_poverty
(of course, they are redefining it, but there is lots of information available about how the number is set)
One could conceivably figure out a reasonably not-out-of-thin-air number for each country by cross referencing the items in an arbitrary basic basket package and supermarket food prices in each country.
The biggest problem is measuring it, so one standard income-based extreme poverty line makes sense in order to compare across countries.
Also, like I said in another comment, this measure of poverty is power purchase parity adjusted, so currency changes should not affect.
The problem with per-capita measurement of income for very poor people is that what you really care about is per-family income because of the economies of scale involved in so many of the goods they consume -- cooking fuel, etc.
In places where poverty like this exists, a family of 8 living on $8/day ($1 per capita) is often better-off than a family of 4 living on $5/day ($1.25 per capita).
Regardless of whatever methodological flaws exist in various metrics, this is a positive trend that is (hopefully) only going to get better as technology increases the efficiency of various systems of distributing goods and services.
Shameless plug: GiveWell [0] and Giving What We Can [1] are non-profits that evaluate the effectiveness of development and global poverty charities. Some are hundreds or thousands of times as effective as others when it comes to saving and extending lives.
Those groups help you decide where your money should go to maximise your impact.
After watching the documentary called 'Life and Debt', I found the idea of "free trade" in poorer countries to be very different than i would have first thought. It seems free trade in the case of Jamaica resulted in a large import of goods, to the point where local Jamaica could not compete with the huge multinational corps from other countries.
http://www.e-ir.info/2011/06/23/britain-free-trade-and-the-i...
As in the 1800s, it's a good deal for rich countries and a bad deal for developing countries since their infant industries can't compete and so never get off the ground.
China was wise not to follow this path. As was Japan, Taiwan, South Korea, Singapore and Hong Kong.
It was causing food to be exported to Britain while the Irish starved.
And due to comparative advantage, even competing against imports with free open trade is better than being closed off.
That may be the case, and one would hope the local businesses are able to adjust or that new jobs follow. But it is certainly not automatically the case that having your local market flooded with cheaper goods is better for consumers.
If you can't find such a good or service, then free trade has helped consumers.
I also said nothing about whether or not free trade in general is beneficial. What I addressed was the unsupported blanket assumption that free trade will automatically benefit consumers without any kind of qualifications.
As I said: It very well may do, but for that to be true in any specific case, then a number of other factors needs to line up as well.
Maybe. Sometimes. Under certain circumstances.
For instance, the more successful economies Japan, Germany, China, Korea didn't follow the same model of free trade that has been "suggested" to the South American countries. In fact, in the eighties everybody complained how difficult was to access to the Japanese markets.
The other thing is that is very different free trade of commodities vs. free movement of capitals but normally it's sold like it's the same. If you are in Peru is probably a bad idea get a lease denominated in U.S. dollars, no matter how good the deal looks now.
I read this in many places, granted, they all may have some bias (You can make a search with "reasons declining extreme poverty"). But, I personally do believe it is the main reason.
A few days ago I ordered & received a cheap scarf via mail. US$0.95 - delivered! from China! obviously whoever was involved didn't make much off the transaction, yet they WERE able to make & sell & deliver something to an idiot on the other side of the planet. Where there was no market before, Amazon & USPS & other businesses have pursued "globalization" to the point that a manufacturer & buyer a world apart could engage in profitable transactions.
The way out of poverty is capitalism, sellers & buyers making mutually profitable agreements, and globalization eliminating barriers of distance & borders.
The world's poorest are really getting less poor.
This article claims they just changed the baseline poverty rate. I think they changed other numbers, but can't prove it.
Two days ago, I went to the world bank calculator and the poverty calculations were based on $1.25. I and other HN'ers noticed the calculator didn't seem to account for inflation.
Two days ago I played around with the calculator and used $1.90 and $2.00 as a "the input for the poverty line". I was getting final poverty levels that were doubling. With my numbers the poverty level was not below 10%.
I did the same experiment today, and someone updated all the numbers, or just changed them? Or, I my memory is wrong. (I have not confirmed this on The wayback machine.)
My point is two days ago at $1.90 the poverty rate was close to 20%? Today, my calculations are not close to what they were two days ago?
So, the question is how realistic is the extreme poverty line. And this doesn't help it much:
The World Bank first introduced a global poverty line in 1990,
setting it at $1 a day.
It was adjusted last in 2008, when the group raised it to $1.25 a day.
An interesting graph will be to plot the extreme poverty threshold against inflation _in_emerging_countries_.
With the falling emerging market currencies and extreme inflation (hyper-inflation perhaps), I don't think that $1.90 a day cuts it.
Having said that, in most developing countries, being on the poverty line would mean that you have just enough for clothing and feeding yourself.
Nevertheless, it's exciting to see millions graduating out of it in just a decade. Specially for me, because I'm Indian.
http://data.worldbank.org/indicator/SI.POV.DDAY
Population below $1.25 a day is the percentage
of the population living on less than $1.25 a
day at 2005 international prices
Moreover, the choice between $1.00 a day and $1.25
a day (or even higher lines) makes no difference to
the Bank’s claim that measures of absolute poverty
have fallen in the developing world over 1981-2005.I find it's generally safe to assume that most of the well-respected development organizations are made up of smart people that know what they are doing and will not overlook something so fundamental as inflation, even if they do use statistics to advance their agendas from time to time.
well-respected development organizations are made up of smart people
that know what they are doing
The unemployment numbers in the US are reported as such (ie: only reporting the number of people looking for jobs vs people employed) because they've been consistently reported like that since the late 1800s.
The "real" unemployment numbers are still taken from the Bureau of Labor and Statistics.
Every statistic you want is there.
The reality is, poverty can be cultural. In the west a saying like "they can pay me little but I'll work even less" would be considered absurd. In certain countries - its a folk tradition.
Another problem is a self-inflicted brain drain. Smart people with potential don't want to live in festering shitholes where property rights are not respected, rule of law unexistant and hence economic opportunity absent.
"Extreme poverty has long been defined as living on or below $1.25 a day, but the World Bank’s adjustment now sets the poverty line at $1.90 a day."
And then, at the end:
"The World Bank first introduced a global poverty line in 1990, setting it at $1 a day. It was adjusted last in 2008, when the group raised it to $1.25 a day."
Got a bit confused.
Their measure of poverty has nothing to do with the access to quality water, quality food, land, quality of life, freedom, personal autonomy, health, safety, etc.
Many indigenous people lived on $0.00/day yet had a higher quality of life; before outside influences (i.e. civilization, imperial, western) disrupted their ecosystems & way of life.
> There are many other indications (such as infant death ratio) supporting this.
This is one of the many metrics that matter; much more than the percentage of people making > $1.90/day.
Edit: "quantitive" is replaced with "some kind of metrics"
Understand that information is lost in its translation to numbers. It's also interpreted to have meaning.
Also understand that values of those assigning the scores plays a large role. For example, an indigenous persob rating quality of life as a score is probably nonsensical to him/her.
Also they probably had lots more women die giving birth.
"Extreme poverty" is caused when capitalism invades an area, appropriates all assets, and then the people basically either have to sell themselves into extremely-low-paid labor or starve.
I take it you haven't read any pre-industrial-revolution history books lately?
At what point in the past was the average person better off than they are now?
In all seriousness, I'm interpreting poverty as lacking the basic capacity to participate in society. In that sense, the average score of something like the human development index is not relevant to whether or not systemic exclusion of classes of people in society is prevalent. The organization of resource-controlling groups in industry and government are generally what determines the social and economic mobility of a population. Before some point in civilized history, these constructs did not exist to create such vast disparity in human dignity and wealth. In other words, neither the cause nor the existence of poverty is measurable by the average standard of living.
http://www.hanshoppe.com/2015/03/a-short-history-of-man-prog...
in other words, you create an environment where entrepreneurs can successfully operate as people tend to strive more when they see their efforts pay off and those pay offs are not subject to the whims of others
> how are you going to even think about getting education? You start with an education on how to survive better. You don't need to start with an advanced education.
Many people are already dependant in "the fish", whether or not you give it to them.
Free trade and free markets are truly amazing, aren't they?
(unless you were going for sarcasm there)
nothing you give them will mean anything when someone else can simply take it because of their position of power. we see this everyday, aid goes to the powerful except for a few select media staged events.
all comes back to the rule of law, not the rule of man.
The other half is making sure that people can bargain from a position of power rather than getting stuck in a spiral of exploitative transactions.
A 'position of power' in this case means not bargaining to avoid death or pain. ALL people should be in such a position; no need to pick and choose.
That is also how you decide -- just ask 'Will lack of this cause someone physical pain or death?' If the answer is 'yes' society should do its best to provide it to those who are not in a position to get it for themselves.
The goal is to make sure when people engage in a transaction that everyone walks away with more value than they brought to the table. That's the magic of the market. But when people either need to strike a bargain or pay a dreadful price -- well, that's why muggings don't lead to market efficiency, isn't it?
That isn't from a 'position of power'. That's avoiding transactions where the other party has a position of power. Two countries wishing to operate from a position of power may engage in a cold war or the like.
Not to say a social safety net to ensure life never hangs in the balance wouldn't prevent some unfair transactions from occurring...
[1] http://www.amazon.com/Cry-Havoc-Simon-Mann/dp/1743142307
http://longnow.org/seminars/02008/may/21/technology-empowers...
1. Universal education (free for anyone interested) 2. Universal healthcare (also free) 3. Improved housing 4. Reliable, clean utilities
Sure, this stuff might be expensive, but the long term benefit of having more healthy, educated people around significantly outweighs the cost.
But your definition of "solution" will still be crazy if you do that.
E.g. how much investment and in what would it take before the network effects and increased trade will ensure there are enough jobs to lift those who can work out of poverty, and provide enough tax revenues for governments in question to care for those who can't work.
I believe they are happier than most of the population. Gov might not like them too much as their contribution to gdp/Tax might be less than the "normal" folks. On the other hand, their demand on "gov service" should be a lot less too.
I think the GP's point is that, from the perspective of the survey, the Amish's income and/or expenditures might look the same as someone in poverty, even though their quality of life is much better.
Or maybe the world bank is simply wrong.
"The number of people in extreme powerty could be greatly underestimated": http://www.theguardian.com/global-development/datablog/2015/...
Nope. It's because poor people are getting access to better infrastructure, better healthcare, better education, and better job opportunities.
The more economically advanced nations need to reach income and worker/environmental protection parity with less economically advanced nations.
I'd prefer that be done by raising the level of the less advanced nations rather than lowering the level of the more advanced nations but that's a different discussion.
I think that NAFTA (and the soon to pass travesty that is the TPP) are globalization tools that negatively affect the American worker, and largely this is due to the undermining of the idea of national sovereignty and the dismissal of protectionism that I think is premature. I think protectionism should be a duty of a nation-state to it's citizens, because until I can call myself a citizen of the world, I think my own government has a duty to protect it's and my self-interests, one of those being economic stability and growth.
In this case this is my primary issue with the supranational oligarchy. They operate on a global scale, without regard to borders, and while they formerly exploited the third world, now that the third world has been ravaged so much, they are turning inward to their own populaces, and have begun eating us from the inside out, extracting wealth.
Corporations have a charter from the government, and corporations that undermine national sovereignty and interests should have their charters revoked (as Max Keiser would say,executed). If we don't curtail these powers now we are going to wake up with a global government of oligarchy unaccountable to the people. (who are sure to say "but look at how much better off everyone is now! it was all for the greater good!")
The key element to remember is is that class warfare is real, and the rich are winning. Globally. It's not just about money either, it's about freedoms and liberties.
We won't know until we read it in a month, but it sounds like corporations were over-represented in the negotiations and a lot of that leverage has been lost. If true, that makes the agreement very dangerous.
People will argue that the third and second world are better off now than they were but that is a low bar, IMHO. We need to catapult them to our modern standards. Workers must be represented more in these negotiations. We must rethink the 'exploitation is ok as long as it is profitable and legal' idea that underlies a lot of our policy both at home and between nations.
It is not a 'free trade or nothing' discussion as so many free trade advocates would like to paint it.
In short, I think I agree with you but there is a lot of changing of minds that will have to happen to foster support of these ideas.
"One of my jobs as an economic hit man was to identify countries that had resources like oil and arrange huge loans for those countries from the World Bank and sister organizations. But the money would never go to the actual country; instead it would go to our own corporations to build infrastructure projects in that country like power plants and industrial parks; things that would benefit a few very wealthy families. So then the people of the country would be left holding this huge debt that they couldn't repay. We would come back and say, "well, since you can't repay your debt, you have to restructure your loan." That's when the IMF comes in. So the World Bank makes the original loan and IMF shows up and says, "We'll help you restructure your loan, but in order to do that you have to meet certain conditionalities. You have to sell your oil or whatever the coveted resource is at a cheap price, to the oil companies without restrictions." Or they would suggest the country sell electric utilities, water and sewage, maybe even your schools and jails to private multi-national corporations. Or maybe allow military bases to be built; these sorts of things."
The main problem of American middle class, and even more so the problem of American poor, is actually obesity. Think about that.
That is intentionally misleading.
How about "extreme poverty" = "still suffering malnutrition" + "still lacking even basic education" + "still lacking any access to healthcare"
The $1.90 tells nothing and it is also dependant on purchasing power. If somebody was making $200/month in the US that would also be extreme poverty.
You are right that somebody making $200/month in the US would be classified as extreme poor (and someone in India would not be considered extreme poor if he earns $200/month). I don't see the problem with this.
The world literacy rate and trend is supposedly pretty good. However, there are large differences in how literacy is measured and huge uncertainties in the numbers.
In some countries you're considered to be literate if you can sign your name, in others they just report 99-100% without doing any measurements.
UNESCO have plans for a better test to be applied globally, but I'm not sure any test that would lower the numbers would ever be welcomed.
It's not misleading. Malnutrition is going down, lack of education is going down, lack of access to healthcare is going down. The more you read the Guardian, the more you have misconceptions about how bad the world is developing.
The author of that article is kind of clueless, though - US-style "poverty" is not remotely like Zimbabwe poverty.
Are you asserting that Baltimore has less than 99% flush toilet usage or 99% clean water access?
http://www.urbangateway.org/news/more-million-people-without...
If you get a chart of how many people live with less than $2 per month you'll probably see a continuous steady decline. Why? Inflation.
You're two random people on the Internet.
I'm siding with the World Bank, not with the internet commenter who demands another internet commenter defend experts.
You're the one making the extraordinary claim here.
http://www.usinflationcalculator.com/
http://www.westegg.com/inflation/infl.cgi
Of course, if you live in Venezuela, things are different, but World Bank uses US$.
edit: only now noticed that this was mentioned already in an earlier comment by oblio.
It's possible that they are failing to adjust for inflation sufficiently, but that claim needs support. How much inflation was there between 1990 and 2015? Why does it differ from their calculation?