Three Myths on the World's Poor | Hacker News Reader

Three Myths on the World's Poor

online.wsj.com

108 pointstokenadult37 comments

> Here's our prediction: By 2035, there will be almost no poor countries left in the world. Yes, a few unhappy countries will be held back by war, political realities (such as North Korea) or geography (such as landlocked states in central Africa). But every country in South America, Asia and Central America (except perhaps Haiti) and most in coastal Africa will have become middle-income nations. More than 70% of countries will have a higher per-person income than China does today.

Woah - I would love to see some data visualization of this. If that's true - that's really, really something.

I would love to see some data visualization of this.

Hans Rosling, who runs the Gapminder website, produces some great visualizations of world economic trends.

"The River of Myths" (a famous visualization, short)

http://www.gapminder.org/videos/the-river-of-myths/

"DON’T PANIC — The Facts About Population" (an hour-long documentary, including interesting visualizations)

http://www.gapminder.org/videos/dont-panic-the-facts-about-p...

I know correlation is not causation, but one has to put side by side the NAFTA treaty and Mexico City's transformation since the 1980s. And on a more anecdotal note, and also as a +1 for international free trade and a freer job market, there's the story of my brother who was raised by my paternal grand-parents in a mountainous village in the Carpathians.

He actually lived on raising cows and selling home-made palinka until a couple of years ago, he had never been abroad. But then he managed to get a job as a lorry driver and got to see half of Europe as a bonus, and he actually made decent money. He used part of that money to buy an American-branded car manufactured in Germany (his first ever car) and a Taiwanese-branded laptop manufactured God-knows-where (his first ever computer, and he's 35). But then I got to read a letter sent to the Financial Times a couple of weeks ago where some Swedish lorry-drivers' representative was complaining of an "unfair" jobs market in his field of work (meaning East-European transport companies like the one my brother is working for) which got me to worry that my brother's prospects will not be so bright anymore.

What seems unfair to me is that the companies are free to produce the products I buy with cheap labour in, say, India. But I'm not able to buy the cheaper versions of their products that they sell in India (individuals are allowed to buy and personally import such products, but if you do it on a commercial scale then that's illegal). If trade is free then it should be free for everyone, not just when it benefits the big companies.

If we were able to buy at their local price, we would have effectively merged two formerly separate markets. And the now one market price would likely be much higher.

To my layman's knowledge, it would be analogous to building a canal between a low-lying lake and the ocean.

"Today, Mexico City is mind-blowingly different, boasting high-rise buildings, cleaner air, new roads and modern bridges. You still find pockets of poverty, but when we visit now, we think, "Wow—most people here are middle-class. What a miracle."

-- Bill and Melinda Gates

They should visit the other 99%

Do you have any links to the fact that 99% of Mexico City is poor? Most information I can find on the subject say households have a comparable level of expenses to the average household in Germany or Japan which would seem to be pretty middle class to me.

I found some other statistics that said that the average salary in Mexico City is 32K/year which seems like it could easily be middle class there.

I meant the other 99% of Mexico. From Wikipedia:

From the late 1990s onwards, the majority of the population has been part of the growing middle class.[156] But from 2004 to 2008 the portion of the population who received less than half of the median income has risen from 17% to 21% and the absolute levels of poverty have risen considerably from 2006 to 2010, with a rise in persons living in extreme or moderate poverty rising from 35 to 46% (52 million persons).[95][157] This is also reflected by the fact that infant mortality in Mexico is three times higher than the average among OECD nations, and the literacy levels are in the median range of OECD nations. According to Goldman Sachs, by 2050 Mexico will have the 5th largest economy in the world.

"The 99%" is an ultimately meaningless statistic that doesn't describe a real problem or imply a real solution...even in your follow up you acknowledge that "the 99% of Mexico" is actually the 21% (except not really because < half of median income is not definitionally poverty). So what does "99%" have to do with anything except slacktivism?

I don't think you're quite reading those numbers right.

> But from 2004 to 2008 the portion of the population who received less than half of the median income has risen from 17% to 21% and the absolute levels of poverty have risen considerably from 2006 to 2010, with a rise in persons living in extreme or moderate poverty rising from 35 to 46% (52 million persons).

21% receive less than half the median income. That means that 29% receive between half the median and the median, because the median is defined as the level where half the population makes more than and the other half makes less.

This is a really ugly distribution. Yet the percentage of people living in extreme or moderate poverty is 46%. Since poverty is defined by income, what that means is that the median income level is somewhere around the moderate poverty level. This also implies that there's a 'light poverty' level whose income level is somewhere north of the median.

These two figures add up to a lot of poor people.

What is the definition of poverty in this context? It seems most likely to me that a large part of the population did not profit from the recent development as much but are still better off than before.

But then you're comparing apples with oranges when discussing average household income. Median income seems like a better metric, since Latin American countries have a much broader income disparity than the two countries you mention.

Parent was exaggerating of course when he mentioned 99% (and certainly doing a wink to the Occupy movement). Still, unless Mexico City massively changed since I last went there (2009), I can only agree with his assessment: you find a lot of run down areas when you leave downtown.

What about foreign aid putting local producers out of business? Have that been solved already? If so, how? The article is quite vague on that point: "We also hear critics complain that aid keeps countries dependent on outsiders' generosity. But this argument focuses only on the most difficult remaining cases still struggling to be self-sufficient."

You can avoid a lot of that by using the money where there are no local producers - schools where there are no schools, hospitals where there are none, water purification where no one is bothering and the like.

The fact that wealthier countries and people have fewer children is truly one of the great paradoxes of the human condition, from a biology point of view. I've occasionally wondered if it isn't a partial solution to the Fermi paradox. Rich humans have fewer children for many reasons, the most interesting one to my comment here being that on the "numerous vs. expensive offspring" spectrum, primates & humans have basically gone all the way to the "expensive" side, hard, and we continue to make children ever more de facto expensive in various ways.

Every other biological sample we have says increased resources leads to increased reproduction; suppose humans really do have a very bizarre, very unusual biological niche here and indeed most species really do fall into an uncontrollable Malthusian trap because they don't go all the way to the "expensive" side, and end up getting crowded out by the "numerous". I mean, it is not as if this is some sort of conscious choice we have made to contain our population, it just happened, which in some sense is why it works. If it were anything less than nearly universal, it wouldn't be able to save us. Nor, abstractly, is the Malthusian argument that bad... its only flaw is that it is observationally wrong (for population), and reality trumps theory, no matter how pretty the theory.

I don't understand why you think it is a paradox. If a family is poor, without good health care for example, then more children will die or fail and it will hurt the family harder. Their employment is also more likely to be manual labor based where children quickly supplement their capabilities (e.g. farming, retail). It's simple economics.

"More resources -> less reproduction" has, to the best of my knowledge, one example in the entire animal kingdom: Us.

You're looking at the reasons, which are also interesting, but the next layer of abstraction down from the point I'm making. (Though I'm not sure you're not explaining why poor people have fewer (surviving) children, which is the opposite of the data....)

I think that you and jerf are talking different languages. You're saying that, economically, this makes perfect sense. And you're right.

But jerf is saying that, in Darwinist terms, this makes no sense at all. And he's also right.

A useful term here is "r/K selection". You can look at species on a continuum from "r selection" (quick reproduction and growth at the expense of competitive advantage) to "K selection" (slow/expensive reproduction, but better at competing for resources).

Whales and elephants, as well as humans, are good examples of K-selected organisms.

It turns out that if you want a species to completely take over the world (ie: build civilizations), extreme K-selection works better, because civilized beings can avoid increasingly large subsets of the normal disasters that wipe out r-selected creatures. Consider what happens to rabbits, say, in famine conditions: the population is decimated. Now consider what happens to humans nowadays: we ship in food from somewhere else.

For an alternative view, consider that the most important invention we ever came up with for beating Malthus was probably birth control. The genes keep doing their thing, but you don't end up getting babies out of it, which exerts an even further pressure towards K-selection: parents decide when to birth children according preparedness for the K-strategy lifestyle they themselves live.

Of course, that does leave you with the problem of how to have a heavily K-strategizing civilized society deal with deliberately r-strategizing sub-populations. But this is a very rare problem that tends to sort itself out via economic recession long before it reaches Malthusian crisis proportions.

> In the course of just two decades, Thai women went from having six children on average to having just two. Today, child mortality in Thailand is almost as low as it is in the U.S., and Thai women have an average of 1.6 children. This pattern of falling death rates followed by falling birthrates applies for the vast majority the world.

I'm left wondering if stats like this lead to the "foreign aid workers will sterilize our women" propaganda that groups like the Taliban spread.

While Thailand's family planning initiatives may have been inspired by similar programs in other countries, the people who spearheaded the movement were Thai. I don't normally like TED talks, but this one[1] does a great job of explaining the program. Although not all developing nations can accomplish something like this, it's good to see that it can be done.

[1] http://www.youtube.com/watch?v=EL9TBKSdHXU

Probably. It's not substantively different from "the NWO is sterilizing our children via the water supply" here in the USA.

"A new class of middle-income nations that barely existed 50 years ago now includes more than half the world's population."

I found this sentence confusing as:

- I read 'middle-income' to mean 'median income'

- I read 'middle-income nations' to mean 'nations whose mean per capita income is at or close to the world-wide median per capita income'

Can anyone provide an alternative (less confusing but still specific) reading?

Here is a link to the World Bank classifications of countries by income:

http://data.worldbank.org/about/country-classifications

OK, so:

- they use mean within countries (GNI per capita is GNI divided by population)

- middle-income is GNI per capita from 1036USD to 12615USD

By those definitions, the sentence isn't a very strong one because: (i) 1036USD is pretty low in most places, and (ii) (I'm guessing) the median incomes in those countries are lower than the mean incomes used to classify the countries, the means will be dragged up significantly by outliers like Carlos Slim.

What a unique and fascinating perspective. Realizing that I have no idea how the rest of the world lives makes me want to travel more. The vast cultural differences between parts of the US are mind-boggling on their own. Really makes you wonder how our actions are so predicated off of what we understand about the world.

Can you imagine Bill's current day to day involves helping the worlds poor thrive and create societies. And he's retired. What am I doing with my life, haha.

I'm skeptic about myth #2

Foreign aid is a fragile process. If the country you're aiding is having political problems or poverty problems, aiding a country won't mean a lot. It will have an overall positive effect, but on the long run, I have my doubts.

Political instability, poverty, illiteracy: relieving the pain of those problems can't be done without a minimum of politics, and when I mean that, I'm talking of both the country you aid and the country the help comes from.

I agree with most of what they say about foreign aid, that we should not stop, but that doesn't mean I should blindly trust charities. Democracy and free markets doesn't bode well with generosity. Our governments don't have any interests in getting into the politics of charities.

I really think it makes a difference when billionaires comes at those countries's help, rather than common citizens, but I wish there would be lobbies that work in the interests of charities. I wish there would be a true political debate about how governments could care about charities.

It's hilarious, watching the WSJ pretend to have a social conscience.

Are you for real? It's a piece adapted from Bill Gates foundation.

It's still a bit ironic to see it in the WSJ.

"cleaner air"...so if one city has cleaner air, and we think(?) on average that the air is getting dirtier...who's getting/creating the super dirty air?

Beijing, last I checked ;)

Of_Prometheus, you've been hell-banned for over 500 days, apparently. Here's the text of your comment because it seems informative, although I don't think all of it is to the point.

============================

The Gateses don't account for inflation in their prediction. Income may be higher in the future, but so will be living costs. The standard of poverty will simply be shifted. Furthermore, I think it's hard to reasonably expect a world in which almost no people are poor without considering the changes in consumption that will have to occur first. Present consumption levels won't be sustainable with more countries consuming at the level of the US, for example, unless new food/energy production innovations are able to mitigate it. (To that end, I admit to wishing the level of consumption of many western countries would be reduced.)

An anecdotal piece about income levels:

Currently, I'm in southeast Asia, and have seen first-hand income disparity. The city in which I'm living has seen a drastic increase in hotels over the past decade (someone reported 32 were approved in 2013, but they did not provide evidence), and many large roads have a hotel (or two) under development somewhere along them. These hotels are pristine and obnoxious. Beyond these main roads, within the bowels of the city blocks with narrower, labyrinthine, and occasionally unpaved streets, houses are barely adequate. With the chickens and other animals running between these houses, you feel like you're in a rural village. This is not specific to the entire city, but that you see it in a not-very-poor neighbourhood reminds you that poverty exists just behind the walls of rich hotels.

Food is incredibly cheap, $1 if you want something affordable; the most expensive meal I've had was $3, although I'm sure you can find more expensive food. Cooking isn't very efficient and cheap here, so most of your lunch and dinner comes from stalls or restaurants. Clothing is uneven; a branded T-shirt is $4, good shirt $30, and discounted shorts $10. Housing is cheap unless you want western amenities; I have a comfortable apartment in a quiet alley, with all the furnishings, a balcony, free drinking water, free laundry service, and free cleaning service for $230 a month. Tech doesn't appear to be very different; Laptops are 50% cheaper, as was an OTG cable, and when it was first released the S3 was $500.

The designation of all this as "cheap", however, depends on perspective. When comparing it with a country where good meals cost $20, especially ones that are relatively bland in comparison with the food here, one may view living comfortably here as an easy thing to do, but that's only if you earn a western-level amount. Instead, a good income here will barely cover my rent, which, seen from a local perspective, is actually quite obscene. And the longer I've lived here, the more I've found paying $3 for ribs harder to stomach. Earnings are commensurate with living costs, so when I think about whether I want to live here permanently and earn money here instead of in Europe, I have to consider that what would be a good income here would make it hard for me to return to the west with much pocket change. (For that reason, a friend works in the UAE and visits his wife here only every few months.)

If income levels increase here, so will restaurant bills, electricity, and the price of a laptop. The cost of everything will be higher, and everyone will be left with the same (in relative terms) amount of money to spend. The people who beg for 10 cents today will start begging for $1. Everywhere I've gone, it's been the same story: there's a balance between what you earn and what you pay; the only difference is the bracket surrounding those two numbers. To me, the issue here isn't of income, but of prosperity. For many people, earning 10% of what they would in the west for often harder work is not a problem, because it's enough to support their families. What breaks my heart is that I can't drink tap water, am weary about my health, the rivers and air are heavily polluted, education depends on the interest levels of jaded teachers, and earning that 10% carries with it a significant cost to the environment. I desperately want the people here to be able to view the price of lunch for their family as flippantly as I did, but what I think they want more is to be able to assure that their children will be able to recover from sickness at a reasonable cost (for free in a perfect world), get a good education and hopefully make it to university (which is expensive but more prestigious here than in the west), have clean water and enough food, fewer power outages, and after that, enough money to afford the trinkets every modern human wants to show off to their friends. I believe they will take all that before higher income in 20 years to afford the same amount of what they get now.

I don't know whether any of this adds any value to the discussion or has too many fallacies (I think there is some appeal to emotion), but hopefully it was worth reading. Full disclosure: many of the people with whom I've worked here are in conservation and political science; I likely have an environmental bias, as well as bias relating to corruption and gender/class equality.

This is of course true; money is a means to an end. What we care about is that people have access to good food, sanitary living conditions, and so on. But I think progress on those fronts is real; if you compare the living conditions of people in Brazil, Thailand or Shanghai to what they were 40 years ago, they really are that much better off.

@Of_Prometheus

You're hellbanned. Wouldn't normally bother to say anything, but you've gone to a lot of effort there, and most won't see it.

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