The world’s rich stay rich while the poor struggle to prosper
johnkay.com
johnkay.com
> So what about China and India? Their recent growth performance has been exceptional, but both are still desperately poor countries by the standards set by Switzerland and Norway. The gap will take many generations to eradicate.
Which Bill completely acknowledges? However, he also makes the point that today, China and India are moving up at considerable speed when it comes to income. They have the abject poor still, no one will disagree, but compared to where they were 20 years ago, even the poorest in those countries are much, much better off, and all signs point to it getting better very quickly.
> But you do not have to venture far from the centre of Nairobi or Shanghai, and only round the corner in Mumbai, to see sights unimaginable in Norway or Switzerland.
The appeal to emotions here wasn't needed, nor was it affective. Not to mention, it still misses the same point: Bill isn't saying that things don't suck currently, he's saying that while they're not great, they're considerably better than they were before and that's an ongoing trend.
But if you look at living-hand-to-mouth poor, I can understand John's reasoning. Yes, average incomes (productivity) have gone up but you also see how prices on commodities are rapidly raising in the developed countries to make up for that. [1]
This makes me wonder if the universal basic income is ever going to work. Look at insane costs of healthcare/education in the US - no doubt caused, in part, by "free money" either through government-assisted programs or employer-sponsored insurance.
Perhaps it's an inherent property of capitalism: some things always end up barely within reach of a lower class.
[1] Hence the need for things like http://en.wikipedia.org/wiki/Big_Mac_Index
I wouldn't say that's true, we just need to figure out ways to produce those things cheaply enough (through automation, other technologies) that everyone can enjoy them. Take a look at agriculture in the US...even the poorest people here have access to (not very healthy) food whereas just under 100 years ago many were starving in the Great Depression. This is because agricultural technology has led us to an abundance of cheap food that everyone can afford at some level or another.
But, therein lies a paradox, right? I mean, when you seek to lower the cost of production through automation, technology, etc. you wind up displacing human workers, reducing labor demand, and putting downward pressure on wages. BTW, I'll add that lower wages are another significant way that companies reduce costs/prices.
The net result is that profits increase, which benefits a relative few rich, while the quality of life for many is reduced or stagnant at best.
In other words, this "race-to-the-bottom" walmart-ization of our economy seems to be, in large part, responsible for the income disparity we see today. Perhaps the poorest who would otherwise starve are benefited (even if through entitlements or aid which can now go further), and of course that's a very good thing. But, on balance, the world's wealth is accumulating to a very small number of people at an accelerating pace.
There is hardly a paradox. Automation causes small term problems but great long term benefits. I won't go too far in history. But as early 1980's India saw massive protests and Nation wide bandhs to protest introduction of computers(and other automation) in the country. People just could not get themselves to accept that their jobs will be replaced by machines. But that event came to pass anyway. Many problems to people of that era in India, are even unknown to the youngsters in India now.
>>The net result is that profits increase, which benefits a relative few rich, while the quality of life for many is reduced or stagnant at best.
Again, I completely disagree. If you keep changing the definition of poor frequently then its nearly impossible to eradicate poverty ever. Poverty today is nothing like what it was even a century ago.
>> the world's wealth is accumulating to a very small number of people at an accelerating pace.
The world's wealth will always accumulate at places, professions and people which benefit from economies of scale. It doesn't matter which system of economics those people are in.
It does the poor no good if they can't even afford the cheapest good.
Right. That's pretty much straight Marxist ideology. (I say this as a matter of fact, not as a matter of denigration per se.)
Idea for you.
It's a free country, relatively speaking. So if labor is truly primarily responsible for the value in something, perhaps you and a bunch of laborers should get together and start a business providing value to people, and paying lots of money to the labor. Assuming the labor is the primary thing that generates value, it should be easy - in fact, they can attract the best labor by paying more than they'd get in a regime which does not value their output.
If, however, you find that it is really hard to get started because it takes a lot of money to buy equipment (or to pay salaries of people programming vast troves of computer-code, which is more or less custom-manufactured capital)... if you find that it's hard to get started with labor alone, then you've effectively demonstrated that capital provides a significant part of the value.
Silicon Valley may provide a few interesting case studies for you if you wish not to do the exercise yourself at this time.
I noticed though, that your test's premise started as a means to challenging your parent's assertion that labor provided the primary value (i.e. you implied that capital provided the primary value). But, your test's conclusion was that capital provided only significant value, which no one is arguing. Apparently, you couldn't bring yourself to conclude that capital provided the primary value, perhaps because your test doesn't prove it.
But, I have an exercise for you. Imagine starting a company with very little capital, but plenty of labor (i.e. people willing to work for a share in future profits). Now, imagine starting a company with $1B and no labor.
In any case, regardless of which you deem technically "most" valuable, there is still the question of degree: that is, do the rewards accrue to the parties proportionate to their value?
>...our economy is so screwed up right now is because employees are getting a smaller and smaller share of the pie, not because technology is displacing jobs"
But, the two are related right? When tech displaces jobs, which it of course has, then there is lower demand for labor and the price of labor (wages) goes down. There are other forces as well, but all primarily stem from a drive to keep costs (and hence prices) down, while keeping profits up.
>If more people are out of work because of technology, great! That means we have more people who can go work on things like curing cancer and colonizing space :-)*
I know that was half tongue-in-cheek, but would that it worked that way! Alas, what we value economically versus what would benefit us as humans are too infrequently aligned. There will come a day though, when only a tiny fraction of the population will be "neccessary" to create what the world produces. It will be interesting to see how society realigns itself and evolves when so few people need to do traditional (economic) work.
We are already there, and we seem to be doing just fine. I guess only ~3% of US population today works in farms compared to >70% a century back. The only thing is work keeps changing. People have better things to work on. That has always been the trend since mankind even existed.
If the effort required to produce something goes down, prices too go down significantly.
We're not there yet.
>The only thing is work keeps changing. People have better things to work on.
By definition, as long as we have better things to work on (which are valued by our economy), then we haven't arrived at the point about which I'm speaking.
Technology is moving at an accelerated pace. What automation and tech can do is moving up the skill ladder and replacing more jobs than before. In addition, a globalized workforce/economy means we are reaching a scale that is giving us ever-increasing efficiency and per-worker productivity. This is why we are seeing the beginnings of a very stubborn structural unemployment and stagnant wages over the last couple of decades.
But, we are just starting. And at some point, a much smaller percentage of what we produce will require humans. When that happens, the "better things to work on" won't fit the current economy's definition of value that is worthy of compensation. That is, it won't go to the production of goods or services for which people are willing to pay.
Labor isn't 1-for-1 substitutable. You can't take a 50 y/o manual laborer with a high school education who's been displaced by robots and just turn him into a cancer researcher or rocket scientist.
As new generations came of age. That doesn't solve the problem of all the middle-aged people who are now out of work because they have been obsoleted by computers. These are very real problems, politically, socially, and economically, in the short term.
1.) That no matter how cheap we make things, it does no good if the production of those goods causes some to be so much poorer (even down to zero) that they still cannot afford it.
If that's what you meant, then we are in agreement.
2.) That we need to make things cheaper however we can, so that the poorest can afford it.
If that was your point, then well, that's the paradox. Some are poor (or poorer) because of the measures taken to produce cheap goods.
I think you meant 1.) but wasn't sure.
I wasn't really thinking too deeply on how the cost of labor affects the price of goods, but I tend to have the general attitude that if everyone in a firm (including management and the owners will accept 0 profits) wants to work for free to make their goods the cheapest on the market, then they are free to do so (and there is a reason you don't see this in our society...it doesn't last long). However, I think it's a crime, and a serious problem when shareholders and top management reap billions in profits off the backs of thousands of wage workers who earn $7.25/hr and then rely on government welfare programs to support themselves...that's basically the government subsidizing cheap labor for big corporations.
In the US, about 85% of households are "food secure". Non-capitalist sources -- eg, charities or government assistance -- close the gap for about 9% of households, and in the remaining 6% of households one or more people are missing meals.
I don't really think that's a success.
Meanwhile there are more people than the entire population of the US starving else where. I'd hazard the guess that that's worse than at any other time in history.
Considering that there are more people now than at any other time in history, this almost always a safe and lazy guess to make (that their are more people in situation X than at any other time in history).
[1] Side quibble: 94% is capitalism + socialism; capitalism alone is only giving you 85%, and that's if you don't count minimum wage as non-capitalist.
"Socialism is an economic system characterised by social ownership of the means of production and co-operative management of the economy" - http://en.wikipedia.org/wiki/Socialism
While food banks are important, as nearly as I can tell most people aren't relying on private charity alone. (I wasn't able to find a number online, but the numbers I did find were that a boatload of people are relying on SNAP, and a huge fraction of the people on SNAP are also relying on food banks, and that number is roughly comparable to the number of people who visit food banks each year, so the number of people who visit food banks without relying on SNAP must be quite small.)
[1] This BTW may explain why new middle class in emerging economies tends to consist of real estate people, doctors, lawyers and (true in ex-USSR countries) government bureaucrats: they get to benefit from growing GDP first.
The problem is the cost of land, not the manufacturing of homes, per se.
Interesting grouping, as each is more or less fully depended on government to limit supply and create scarcity. The only really exception looks to be housing.
Education is information, and information is only held limited thanks to copyright.
Health care seem to spend most of its money to pay for patents.
Legal expenses differ strongly between countries and different legal system. Some demand the loosing party to pay for both sides, some demand that both side pay their own costs, and lastly some ask government to provide/pay for legal aid. In system where looser pay (or government), there tend to be limits on how much a lawyer can demand.
I saw just a story yesterday (?) on I think KPIX news of a family bringing in less than $1700 a month (living in San Jose mind you) and they filmed her going to the food bank. Her grocery bags were filled with fresh produce! I thought that was pretty neat.
Maybe staged for the cameras or a lucky break.
Most food banks are barely scraping by on whatever hard-work and good-will the volunteers and their community are able to muster.
I would prefer to see this family (probably working pretty hard right now) to make a living income, with their children seeing the rewards that their parent's hard work and discipline has brought them.
Maybe not spending $75,000 on artisanal strippers in one night, but a fulfilling life of self-agency.
Huh?
Even with the modest ACA reforms implemented to date, the growth of healthcare costs has already slowed down. First time since the 90s.
Medicare, which is most akin to single payer in other countries, is the most efficient guarantor (highest medical loss ratio). Long term cost reduction requires extending Medicare to all and embracing the capitation model. Bonus points for resuming prior levels government funded basic R&D.
Tuition costs are rising as subsidies have been removed and student loans have been privatized. The combination created a bubble. Which happens often enough when deregulation and privatization co-occurs, that my hunch is it's casual.
So while universal basic income may prove to lead to inflation, your two examples do not support that argument.
It's sort of hard to parse what you are saying, but the growth in spending (not costs) went down before the enacting of PPACA. This is likely due to the recession, and something of a counterpoint to those that claim healthcare is subject to inelastic demand.
Having the highest medical loss ratio is not equivalent to being the most efficient, as many services do not warrant claims. Capitation is inferior to market pricing in many ways and not "required" to reduce costs. Another solution is to force providers to charge a single posted price to all consumers, instead of practicing price discrimination. This achieves the purported benefit of single payer, while still allowing for people to choose how much they want to spend on medical services.
Tuition costs rose as subsidies increased. Without subsidies, they couldn't have risen. This created a bubble, which often happens when the government provides price insensitive support to markets.
I am not saying that these are the only answers, but you seem awfully sure of some counterfactuals...
Don't confuse markets with incentives.
"Another solution is to force providers to charge a single posted price to all consumers, instead of practicing price discrimination."
Not mutually exclusive.
"This achieves the purported benefit of single payer, while still allowing for people to choose how much they want to spend on medical services."
Until there's price collusion, an oligarchy, natural monopoly. In other words, the exact situation we had with the "free market". (The healthcare exchanges have introduced competition.)
"Tuition costs rose as subsidies increased."
What subsidies? State funding for higher ed has fallen thru the floor. Given the current trend, most public universities will be 100% tuition funded in a few years.
"you seem awfully sure of some counterfactuals"
You mean reality? I worked in healthcare and now higher ed. I'm reasonably sure I know the score.
>Not mutually exclusive. Didn't say they were, but you used the word "require", implying there is only one way.
>Until there's price collusion, an oligarchy, natural >monopoly. In other words, the exact situation we had with > the "free market"." The health care providers of the US do not consist of a monopoly and never have.
>(The healthcare exchanges have introduced competition.) No, they have reduced competition by declaring that you can only offer one of four products to consumers and by regulating the pricing. In many cases, the exchange features only one product.
>"What subsidies?" Loans and grants. State funding for private universities hasn't fallen through the floor, yet their tuition continues to rise.
The common thread is that subsidies on the consumer side (in higher ed, healthcare, and home ownership) increase demand and thus increase prices.
>>you seem awfully sure of some counterfactuals" >You mean reality? I worked in healthcare and now higher ed. >I'm reasonably sure I know the score." No, I mean counterfactuals, where you suppose how the world would be different if some set of things that didn't happen did happen. (e.g., if state subsidies for higher ed hadn't fallen over the past 10 years, private tuition costs wouldn't have risen faster than inflation for the past 30 years)
I didn't mean to make a personal comment there, I just tend to fixate on little things like when the confidence level seems to be overstated. Surely these things are rather complex, or they wouldn't be such difficult problems to solve.
But it is worth noting that in the long term that is only if there is something preventing the industry from growing (limited resources, barriers to entry). Otherwise, supply will respond to the increased demand and prices will be driven back toward the cost of production.
Medical loss ratio = (med cost + $2) / (admin cost - $1) will go up.
We need to realize that what people think of "prosperity" may not be same everywhere.
At first, this might sound repulsive. The idea of a group of elites discovering and hoarding the fountain of youth for themselves while the masses suffer is dystopian. However, upon closer examination, it becomes clear that the money invested in achieving any significant life extension will have a massive public benefit. This is because combating aging requires curing almost every known disease at its source. Any progress made in this front will have massive benefits to healthcare worldwide.
So the question is, why do billionaires invest so irrationally? Why do they buy yachts and invest in hedge funds and social media companies? From the comment below, 113 billionaires out of 1426 are current members of the The Giving Pledge. What are the rest doing with their money?
P.S. I must be clear that I don't consider members of Bill Gates' Giving Pledge part of the group of "irrational billionaires". The Gates Foundation funds an incredible amount of basic research for a philanthropic organization.
They're not irrational, they just care about things outside themselves.
The simple fact is that we only fear death because our genes want to survive. Once that is accomplished -- or once we pass the age of reproduction -- the alien goddess of biology stops whispering that terror into our hindbrains. Myths of hells and grave-monsters and rotting corpses cease to haunt us so deeply. The desire to just be here becomes less intense.
I would like to extend my life, but not because I fear death. I have children. It doesn't scare me all that much, really, though I would of course be afraid if it were staring me in the face. But I'd like to extend my life so that I could experience a kind of extended late-life in order to pursue intellectual ventures of high value and long-term focus. I'd love it if after kids, after ordinary biological life, I could basically become a monk-academic-entrepreneur and dedicate a century or two to art, science, philosophy, etc.
Edit:
In addition, through Gates' philanthropy, his selfish genes are in fact increasing their fitness. All those people in Africa are walking around with 99.999999% the same genetic material that's inside Bill Gates. He is them from a genetic point of view. So his actions are "genetically rational" from a perspective of selfish-gene self-preservation.
Lots of human behavior makes more sense through this lens. Why, for example, do we exercise moderation in war? Because the enemy carries our genes. The whole point of war is probably evolutionary stimulation from a perspective of selfish-gene logic. My guess is that if we went to war against hostile aliens there would be absolutely no mercy or moderation. It would be all-out war, no holds barred.
I do not disagree with the parent poster though. Such investments would have follow-on benefits and the technology would trickle down to us eventually, so I wish there was more money being put into those areas.
A lot of the reason is that people do philanthropy to gain various types of status and reputation. It's often a social action. Investing in SENS wouldn't impress their friends in the right way, while various other causes optimize for social signaling.
Yachts and social media companies are a bit different. The yachts are for fun in addition to being a social signal that impresses some people. The social media companies are usually either to make money or to hang out in certain circles, but they do also have some signaling possibilities (you can tell your old stodgy rich friends that you're involved in more hip investments than them).
Living longer is great but living better is also very important. Social games waste so much of many people's lives.
"appeasement"? Seeking social status is what primates do. It's not even "human nature", it's lower level than that. It's not cultural, it's primate genetics.
The disconnect in the conversations in this thread? Two groups talking past each other? It's because some people are talking about how homo sapiens behave and some people are talking about how homo economicus [1] behaves.
It's not like you are wrong, it's just two conversations happening at once. One is based in reality and another based in fantasy.
"Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the "rich," Perkins, a founding member of the venture capital firm Kleiner, Perkins, Caulfield and Byers, wrote in a letter to the editor in The Wall Street Journal on Friday.
[0] http://talkingpointsmemo.com/dc/5-things-to-know-about-the-k...
I don't want to debate politics with you because you don't come off as seeking a rational open-minded discussion.
I'm commenting primarily to make it clear that I do not agree with you. I didn't want to leave that ambiguous since both your and my comments about the rich were primarily negative in this thread.
Essentially I would go the more direct route, not with events that allow you to use your toys. Not sure where you getting signals of irrationality or lack of open minded discussion. Is it because the word Yacht brings up images of extreme waste instead of philanthropy, resulting in me linking to the likes of Mr Kristallnacht? How well is that social signalling going if this happens to people?
By claiming that the only rational investment would be life extension, you're making the implicit assumption that your life and experiences are worth something (otherwise, why bother extending your life?). If we agree there, why are hedonistic pursuits that (arguably) increase the quality of your life, any less rational than investments that increase the quanitity of life?
No. You make a false assumption that everyone's main goal in to live as long as possible. Different people have different goals, and Gates clearly cares about making a major impact on other people.
Imagine if the great thinkers and inventors of past times were still alive today.
Imagine if someone like Elon Musk could live forever.
edit: gotta love it when drive-by downvoters just cast their vote without adding anything to the discussion.
I'm in favor of SENS, but the idea of having the established elite be permanently on top worries me.
I get that the typical plan is to have a dynasty via grand kids, great grand kids, etc, but it's dumb to ignore SENS.
"SENS stands for Strategies for Engineered Negligible Senescence, a detailed plan for reversing human aging. It is an engineering approach that seeks to slow and then halt aging processes that are the side effects of our body's metabolic cycles"
source: http://www.wisegeek.com/what-is-sens.htm
Correct?
Maybe because it's because I'm only 30, but I'm not afraid of death. Indeed, I find the idea of life extension horrific. It would destroy the vitality of society to have old generations, with their decades of entrenched perspectives and power, cling on in perpetuity. I don't want to hang around consuming resources and overshadowing my children. I want them to have their own time in the sun.
It starts long before age 30. Just wait till your kids get older, Thomas ....
There might also be some (perhaps cultural) selection bias - people who want yachts try to become billionaires, people who want to improve the world focus on improving the world themselves rather than on becoming rich.
[1] I wrote "realise" first, but I have no way to know if they are right or not.
In the greater scope of the universe, all things must die. The rational outlook is to see our position in this context. Our mortality establishes the constraints in which we look for meaning and purpose, so that we may not be wearied by an incalculable infinite.
And then we may understand it is what we do and express about ourselves that imbues life with meaning, and not in the hope a monument may immortalize an empty phrase. For in all finite existence, the most we can say, and what we must say, is "we are here".
Funding SENS for the sake of your children is not selfish, so it's irrelevant to the question of why are billionaires not investing in SENS to extend their own lives, as the rational selfish choice
Once some steps toward life extension start happening without billionaire's help, and start to become part of popular culture, then billionaires will realize it's a thing.
Also, inertia. You probably strive to live a similar lifestyle as your parents and your friends, rather than (for example) selling your possessions and spending your life backpacking the world, even if the latter might rationally be a better option if it occured to you.
It is certainly not the "only" rational investment. It might be the only rational investment for a person who shares your views on the importance of staying alive and your optimism for SENS research, but there are plenty of people who fail one or both criteria, and they're not all irrational. They're just optimizing for different criteria.
Minimal advances for example may take years and years.
And especially, how do you know that those advances are going to apply to the person who's founding the research?
What if one is at risk of heart attack? Should he still invest in life extension?
The concept of "curing [almost] every known disease" doesn't make any sense.
In this perspective, investing in life extension looks more like gambling to me, because we're dealing with non-deterministic contexts. So much for rationality.
Luxury commodities are an entirely different thing. As people pointed out, they satisfy some different needs.
Perhaps you're overestimating the extent to which billionaires accept that view.
>Therefore, the only rational investment would be in life extension technologies (SENS, advanced prosthesis, etc.).
Or maybe the ultra-rich have done enough research to conclude these sorts of technologies won't be mature in time to help them. So why bother?
No, the only rational investment would be in things that give you utility, or in loose terms, make you happy.
There is no shortage of humanitarian efforts, funds, and foundations started by the wealthy for the sake of the underprivileged. To suggest these are insufficient because their founders remain wealthy is foolhardy.
"The major part of my book... was devoted to descriptions of the economic and social institutions that enable some countries to operate near the technological frontier. The failure to establish such institutions, or to operate them effectively, condemns most of the world to levels of productivity and living standards far below what is possible with existing knowledge and techniques. That subject should interest you"
There's nothing about funds and foundations being insufficient because their founders remain wealthy. He's explicitly saying the opposite: that in many countries with plenty of foreign cash flowing in most people will remain poor and very limited in their opportunities to change that due to inadequate institutions, even if they have access to the mobile telephones and antibiotics their parents didn't and shinier public buildings in the capital city. Gates points to oil-rich Gabon's per capita incomes being "nearly" where the US was in the 1960s, but in 1960 the average American had access to running water and had a life expectancy significantly higher than 55... Gabon might have the income of a "middle-income" country but a large proportion of the population lives in exactly the same way as people in a nearby very poor countries. The problem here is that even though there's enough oil money going into Gabon to ensure the average person has an adequate standard of living, that money is so badly distributed there's a fair chance that Bill will have to chip in for people in Gabon to have malaria nets and HIV tests.
In reality, I think they're talking past each other and would probably end up on agreeing on most points that actually matter: I don't think Gates brought up book titles to ridicule the idea that reforms are necessary for poor countries to prosper, and I doubt Kay objects to Gates' current level of spending on malaria nets.
Except there is this thing called "diminishing returns" that somehow does not apply to being rich. Also, wouldn't "spend" be a more appropriate description than "give away" here?
> There is no shortage of humanitarian efforts, funds, and foundations started by the wealthy for the sake of the underprivileged. To suggest these are insufficient because their founders remain wealthy is foolhardy.
Luckily, the author of this article isn't suggesting that - he is arguing that in its current form these efforts are insufficient because the poor remain poor, and that he has good reasons to believe they will stay poor if we don't change specific problems not addressed in Gates' letter.
> there is this thing called "diminishing returns" that somehow does not apply to being rich
Once you hit a certain amount of money, investments begin to drive your income. Unlike salary which is additive, investments tend to be multiplicative in their wins and losses. So you stand to make (or lose, if you are bad at it) money faster.
> Also, wouldn't "spend" be a more appropriate description than "give away" here?
Semantics. Credit and debits are all i am referring to.
The author is literally arguing that poor places are not getting richer fast enough. Money alone does not make for better living conditions. There are environmental constraints, infrastructure additions, and countless logistical issues. The author provides no solutions that i saw, and instead spends his time ranting about comparison between developed vs developing countries.
Second, John Kay's arguments are not contradicting (or even discussing) the main premise of Bill Gates' letter - which is to convince people aid is effective, but one specific argument made within it regarding wealth and the global economy:
> I was surprised and disappointed that the data you chose to support your case referred not to the distribution of average incomes across states – the subject of your letter – but to the distribution of household incomes across the world. These are very different things.
If I was an economist, I would also point out that mixing up the data like is disingenuous and probably damaging to the overall argument, even if to lay-people like you and me it makes little difference.
Finally, as far as I can see the author of this article and Gates want the same thing: to help the poorest on the planet. The difference is that Gates focuses on what has worked and what his vision is of what happens when things go right. Kay on the other hand focuses on what has gone wrong and is still going wrong and why, and thus is deserving of being paid attention to by people with the power and intent to change things (like Bill Gates for example). This is constructive criticism.
[1]http://forbesindia.com/article/real-issue/direct-cash-transf...
Yes, there are 1,426 billionaires at current count, but that is still a significant number. Many != the majority.
What if? And why discourage him?
It doesn't seem likely to me, but I don't have billions to spend proving my theories. When I think in terms of probably outcomes, it seems more likely that the US will regress towards the global mean, rather than remaining as a permanent statistical outlier.
I also keep in mind that "poverty" has a way of becoming a dynamic definition. In the US, it's becoming that anyone below the 33rd percentile is poor by that definition. So poverty is always with us in that frame of mind.
I think you are conflating the measures of Relative Poverty and the Supplemental Poverty Threshold [0]. Relative poverty is a measure of inequality and is explicitly labelled as such. The supplemental threshold is people whose entire income is less than the 33rd percentile of spending on necessities, and it is not intrinsically true that this group must always exist.
[0] http://www.census.gov/hhes/povmeas/methodology/supplemental/...
I'm not sure what metric you are using to compare the US to other countries that make you think it is a statistical outlier, but unless your key metric is military spending, I have some news for you...
The problem is that these few that have their hands on almost everything just don't know when to stop. They truly have no mercy.
http://www.amazon.com/The-House-Rothschild-Prophets-1798-184...
See the GDP per capita vs median income development on the link below http://lanekenworthy.net/2008/09/03/slow-income-growth-for-m...
I don't know if this is a good or a bad way to measure a country.
Would there not be any poor countries if all countries had about the same wealth distribution? Perhaps all countries would be poor then.
That seems like unambiguous progress to me.
Inequality whining is just getting started, given that we're on track for the problem to just get worse.
Kay says this is wrong, because the countries with intermediate economies aren't on the top yet.
I think the basic misunderstanding is that economic development - if it works - is a stochastic exponential process. Humans tend to underestimate this function badly. On the one hand it is very fast - after the US went from where Turkey is today to its current economy in "only" 50 years, but in every particular year, looking into the future, progress looks like a painstakingly slow crawl.
According to Gates, poor countries are making progress.
According to Kay, there is a ceiling on how much progress a country can make.
So really, the positions are not contradictory since there is a big space between the current state of poor countries (which are making progress) and the ceiling that Kay proposes. Furthermore the ceiling it self can move up overtime. And now I hate for Kay for not writing a clear article.
Gates may be right that most countries will be out of absolute poverty. (In fact, I hope he is right.) But I suspect that Kay is right that most countries still won't be in the "rich" camp, even by 2014 standards.
It's not that you get wealthier because you're more productive. It's that your measured productivity increases as increased labor costs make automation pencil out.
Poor are staying poor by keeping doing things that keeping them poor, like getting further down in debt, not acquiring new skills, not being productive and not expressing their creativity.
And of course rich have their habits as well.
Give money to poor guy, take all the money from rich guy and see where they are in in 5 years. Chances are they'll be back to their original platoes.
[1] http://www.princeton.edu/main/news/archive/S37/75/69M50/inde...
Taking all the money from a coddled, unemployed trust fund child would definitely have no effect on their solvency in the long-term, because money is entirely distributed based on merit.
I mean, thank god, can you imagine if it wasn't?
That's because they don't have the choice, or the chance, to do not do things. At least for the poor people in 3rd world countries. If they don't spend their entire day working for scraps, they (or more likely their children) could die the next day.
http://www.ottawacitizen.com/business/Column+Want+help+poor+...
"In Dauphin, Man., the government gave more than 1,000 families a four-year guaranteed income to help keep them out of poverty. Crime rates and hospital visits dropped. Education enrolment surged. Nobody sat around in sweatpants eating Cheetos. They used the extra resources to make plans. "
Focused on children: http://opinionator.blogs.nytimes.com/2014/01/18/what-happens...
"But just four years after the supplements began, Professor Costello observed marked improvements among those who moved out of poverty. The frequency of behavioral problems declined by 40 percent, nearly reaching the risk of children who had never been poor."
Rural poverty in Kenya: http://www.businessweek.com/articles/2013-10-25/want-to-figh...
"Food consumption increased 20 percent, with a 42 percent reduction in the number of days children go without food. Recipients were also able to increase their ability to earn income. Revenue from raising livestock rose by 48 percent; total revenue from self-employment rose by 38 percent."
Again, for emphasis: total revenue from self-employment rose
And lastly, a large one-time payment to long-term homeless men in London (though an unfortunately small sample size): http://www.washingtonpost.com/opinions/free-money-might-be-t...
"A year later, 11 of the 13 had roofs over their heads. (Some went to hostels; others to shelters.) They enrolled in classes, learned how to cook, got treatment for drug abuse and made plans for the future."
You need to update your model of how people work.
The world's rich get richer while the poor struggle to avoid getting poorer.
Money makes money.
-- This is kind of ridiculous. How can you pick an exceptional rich sample to set standards? Seriously? ????????