Posts Tagged ‘social justice’

Do you believe poverty is worsening?

November 28, 2015

UnknownThe global population living in extreme poverty has risen in the last 20 years – indeed has almost doubled – say two-thirds of Americans in a recent survey. Nearly all the rest guessed poverty has merely stayed the same.

“Rising poverty” is a pessimist idee fixe, so ubiquitous that most folks unthinkingly consider it an obvious truism, to be sanctimoniously deplored. I have actually seen people’s eyes sparkle when talking of “rising poverty;” puffing up one’s moral vanity feels good.

Unknown-1Well, sorry to be a killjoy, but global poverty has in fact plummeted in recent decades. If world poverty were a stock, you’d have lost your shirt on it. The 95% of Americans who believe otherwise are misinformed.

This little known secret was revealed by Nicholas Kristof in a recent New York Times op-ed, citing World Bank figures: since 1993, the proportion of world population living in extreme poverty (defined as earning less than $1.00-$1.25 daily) fell by more than half, from 35% to 14%. Adding insult to injury, Kristof also noted the child death rate, before age five, dropped by more than half since 1990.* And whereas in the ‘80s only half of girls in developing countries completed elementary school, now 80% do. Literacy is rising and disease rates are falling. And so on. (Bill and Melinda Gates similarly argued in the Wall Street Journal in 2014 that pessimists are wrong and global conditions are improving markedly.)

imagesYet still there’s rising inequality, we’ve still got that for moralizing lamentation, no? Well – Kristof’s data refute that “the rich get richer and the poor get poorer.” The rich are getting richer, yes, but so are the poor, though not as fast, which does increase wealth gaps. However, globally, inequality between poor countries and rich ones is indisputably lessening, simply because the former have higher economic growth. (Even with today’s big slowdown, the Asian Development Bank projects 5.8% 2015 growth for the region, minus Japan. For advanced countries, 3% is considered sizzling.)

images-1The left, wedded to a mantra of rising poverty and inequality, is all about wealth and income redistribution to fix it. But part of why developing economies are growing faster than advanced ones, reducing the gap between them, is because wealth is in fact being redistributed from the latter to the former. This is what Trump yaps about with his China bashing. And, ironically, the left hates it too – all the whining about “shipping jobs overseas.” That redistributes wealth from richer to poorer people. Shouldn’t the left love it?

Unknown-2But of course poorer countries aren’t simply sucking our wealth away. To the contrary, a more integrated global economy with fewer artificial barriers enables goods and services to be produced where it is cheapest and most efficient, and this makes the whole world richer – including us. Cheaper production in China or India or Vietnam reduces prices for U.S. consumers (to the tune of trillions of dollars in fact), enabling more spending on other things, which stimulates job creation, making up for jobs lost. Everybody wins.

Further illuminating what is happening and why, author Ronald Bailey provided a commentary (on Reason.comon Kristof’s piece. What has enabled many developing countries to improve by taking advantage of global trade opportunities is better economic policies – in a nutshell, more economic freedom for their people to do so – phasing out dysfunctional old socialist nostrums (this is the “neoliberalism” lefties condemn). Bailey cites a 2015 Fraser Institute report giving countries economic freedom ratings, based on various measures. The 102 countries continuously rated averaged 5.31 in 1980, rising to 5.77 in 1990, 6.74 in 2000, and 6.86 in 2013.

Bailey notes that such economic freedom, and its handmaid, rule of law, tend to flourish in politically and economically stable countries. And it should be no surprise that all those conditions combine to unleash human ingenuity and enterprise, creating wealth and reducing poverty. Bailey also cited data showing that such nations tend to have markedly reduced fertility rates (thus controlling population growth), better environmental stewardship, and higher life expectancies than in more repressive and misgoverned lands.

Bailey concludes by saying that it is in “democratic capitalist countries that the air and water are becoming cleaner, forests are expanding, food is abundant, education is universal, and women’s rights respected.”

images-2Free market capitalism admittedly produces uneven results – as will any economic system – but is far better than any alternative for giving the greatest number of people the best opportunities and quality of life. The gigantic poverty reduction and welfare improvement of recent decades was not the product of socialism, but of getting away from such economic folly. And a market economy is also ethically superior because it works by increasing freedom rather than restricting it. That’s what I call social justice.

(All of this was already covered in my own very excellent 2009 book, The Case for Rational Optimism. I thank Scott Perlman for pointing me to the cited articles.)

*Meantime, Bernie Sanders saying America has the world’s highest child poverty rate is ridiculous. We measure it in relation to average U.S. incomes – which top worldwide scales. Of course child poverty is much worse in many countries that still are much poorer.


The Inequality Obsession

February 3, 2014

imagesContinuing my discussion of George Kennan’s book (see previous post), he also addressed inequality.  So have I (here, here, and here; maybe thus my own obsession). And we recently viewed ex-Labor Secretary Robert Reich’s film, Inequality For All. See how open-minded I am? It’s actually a good film and I’m in sympathy with much of it. I’ll discuss it in a separate post.

George Kennan said nothing has been more “totally disproved by actual experience than the assumption that if a few people could be prevented from living well everyone would live better.” This derived from his observing (as a diplomat) communist countries, where eliminating the rich was accompanied by impoverishing the rest. Yet that poverty was, for most people, made endurable by its being widely shared. And, after communism’s collapse, anyone’s effort to better their situation through enterprise was widely resented and opposed, as illegitimate.

UnknownI was reminded of the old Russian tale of the peasant granted one wish – with the proviso that whatever he got, his neighbor would get double. After long thought, the peasant says: “Take out one eye!” That psychology is relevant to the inequality obsession.

Is it unjust for one person to have more than another? Some seem to think so, or at least talk that way. But if the concept of justice means anything, it means outcomes earned and deserved, rather than meted out arbitrarily – and pure egalitarianism would entail the latter rather than the former. I recognize that there’s inevitably some element of luck in outcomes; but egalitarian obsessives seem unwilling to recognize an element of deservingness; that a person who works harder and/or smarter and lives more prudently should be richer.

images-1In fact, there’s a widespread idea (here’s an example) that wealth and deservingness are inversely correlated – that not only don’t the rich deserve what they have, it’s actually the fruit of evil. All the more reason to see redistribution as social justice.

However, while of course a few people are thieves, most rich folks get their money through making a societal contribution of one sort or another. Unknown-1When you buy a yogurt at the grocery, you’re not ripped off; you’re getting something worth more to you than the price paid (or else you wouldn’t buy it). The grocer, and the yogurt maker (and everyone else involved, e.g., in transporting it), who give you this boon, profit justly. That’s the reality of most economic transactions and relations.

images-3We recently saw a TV documentary showing all that goes into manufacturing a certain monster truck. So many people working with such skill and attention to detail, to make sure that truck will do its job safely and well. It was really impressive. If they earn good pay, and their company earns good profits, they deserve it. This is the true face of business. It’s why all the rantings about the “evils of capitalism,” and the idea that wealth is obtained at the expense of the poor or society, miss the mark. The businesses you get yogurt from don’t profit at your expense, but by satisfying your needs and wants. Same for the truck manufacturer.

Inequality is rising not because more people are becoming poor, but because more are becoming rich; in particular, more very rich. That’s not a problem as long as everyone has a decent living standard. This we can achieve without exterminating great wealth. Indeed, the wealthy pay a disproportionate share of taxes that fund the social safety net.

Yet the obsession over inequality is not mainly a concern for the welfare of the poor. It is instead all about the rich. Lefties cannot stand it that they, with all their social consciousness and moral virtue, have less wealth, and consequently less power and influence, than benighted toads who (they think) are ethically inferior and get rich through grubby commerce. images-4To quote Kennan: “one cannot evade the occasional suspicion that it is not such much sympathy for the underdog that inspires much of this critical enthusiasm as a desire to tear down those who preempt the pinnacles of status to which they themselves aspire.”

(To be continued)