The Rapid and Massive Decline of Global Poverty

While too many people still struggle with deprivation and abject poverty worldwide, it is crucial to acknowledge just how far humanity has come in this regard. Over  at OurWorldInData.org, Esteban Ortiz-Ospina and Max Roser have put together an extensive, data-rich report on world poverty, and the results are outstanding to behold: in less than 200 years, our species has halved the rate of overall poverty while reducing the most extreme forms of it to a fourth of what it once was.

world-poverty-since-1820-750x535

Poverty has declined not only proportionally, but in absolute numbers: in 1820, the world’s population was just under 1.1 billion, of which more than 1 billion lived in extreme poverty — defined by the World Bank as living on less than $1.90 a day.

As of 2015, there were more than 7.3 billion people on Earth, of which 705 million live in extreme poverty. In other words, despite a seven-fold growth in population, there are fewer poor people now than two centuries ago, when the world was much smaller.world-population-in-extreme-poverty-absolute

The rate of decline in poverty began to accelerate as we approached the 21st century. From 1990 onward, the number of people living in extreme poverty declined by 47 million annually — or 130,000 a day. It is sobering to imagine that as of my writing of this post, tens of thousands of people have climbed out of poverty since the previous morning. (I know it is not evenly distributed day to day, but you get the idea.)

share-in-extreme-poverty-by-world-region

Granted, progress in poverty reduction remains highly uneven: while Asia is no longer home to the most abjectly poor people, Africa has taken its place with the largest number and percentage of people in extreme poverty, at 383 million (although this is far fewer than the over 1.4 billion people living in extreme poverty in Asia and the Pacific in 1990). And the Asia-Pacific region is still close behind with 327 million people struggling with dire poverty.

Here’s the breakdown along national lines:

tree-map-of-extreme-poverty-distribution-750x525

Nevertheless, most of the countries still struggling with high rates of poverty have still seen some progress over the years, even if it has been slow and at times sporadic. The gains may be tenuous, but they’re still there, and there are more than enough encouraging examples of previously poor nations making incredible strides over the last several decades (South Korea, Singapore, Ghana, etc.).

Indeed, if we assume that the current rate of poverty decline continues, the number of extremely poor people will decline by more than half by 2030.

 

What a time to be alive, no?

If you’re interested in learning more about the above data, including methodology, data quality, and the definition of terms, click here.

The Perils Facing Modern Scientists

At a time when human flourishing — if not survival — hinges on scientific progress, the pursuit of academic research has never been more challenging. British physicist Peter Higgs, the Nobel Prize winner best known as the namesake of the Higgs boson subatomic particle, wrote a piece in The Guardian some years back observing that in today’s academic climate, breakthrough work like his own couldn’t happen “because of the expectations on academics to collaborate and keep churning out papers”. Continue reading

The Problem With Lotteries

Like most Americans, I never gave much thought to lotteries. They were just an amusing, unlikely way to get rich at the cost of a only few bucks and some minutes filling out tickets.

But as The Atlantic’s Derek Thompson points out, lotteries are big business in the U.S., and can very well be considered an industry in their own right. Consider the following chart based on data from the North American Association of State and Provincial Lotteries (they’ve got an organization for everything these days). As of 2014, Americans nationwide spent more on lotteries than on all other forms of entertainment combined. Continue reading

Why a Basic Income Won’t Lead to Mass Idleness — And Why Less Work Might Not Be Such a Bad Thing Anyway

Work has historically been seen as having a stabilizing effect on both individual’s life and society as a whole. Too much idleness means lots of important things aren’t getting done; widespread boredom and laziness will settle in, causing people becoming self-indulgent, hedonistic, or even immoral. It is little wonder that most people cannot conceive of any other order to our society or economy — what would a world with less work look like? Won’t giving everyone money only guarantee mass departure from the workforce?

Joel Dodge of Quartz takes to task this common counterargument to the universal basic income (UBI), pointing to research showing no ill effects on work ethic and societal productivity: Continue reading

Distrust of Big Business at All-Time High

The post recession world has, understandably, been a deeply cynical place, and a major indicator of this is the historically high level of distrust of corporations, if not the U.S. economy in general. As The Economist reported:

The share of Americans who hold “very” or “mostly” favourable opinions of corporations has fallen from 73% in 1999 to 40% today, according to the Pew Research Centre. Surveys by Gallup of views on big business show less extreme swings, but point in the same direction (see chart). Over 70% of America’s population believes that the economy is rigged in favour of vested interests.

Such growing hostility to business is in evidence across the rich world. Britain’s decision in June to leave the European Union was driven in part by popular discontent with big business, which had lobbied heavily to remain. Many continental Europeans are becoming ever more vocal in expressing their long-standing doubts about “Anglo-Saxon capitalism”.

This backlash against big business is already having an impact on policymakers. The antitrust division of America’s Department of Justice says that under President Obama it has won 39 victories in merger cases—deals blocked by courts or abandoned in the face of government opposition—compared with 16 under George W. Bush. Those victories included a string of blockbuster deals such as Comcast’s proposed bid for Time Warner Cable and Halliburton’s planned takeover of Baker Hughes. The European Union has launched a succession of tough measures against Silicon Valley’s tech giants, such as asking Apple to stump up billions of euros in allegedly underpaid taxes in Europe, and allowing European news publishers to charge international platforms such as Google that show snippets of their stories. Britain’s new prime minister, Theresa May, has said that she may cap CEO pay and put workers on boards. Governments worldwide have started co-operating to curb the use of tax havens.

Continue reading

A Dutch City Will Soon Experiment With Guaranteed Basic Income

This coming January, the guaranteed basic income will go on trial in the Dutch city of Utrecht, where 250 citizens will receive a flat sum of €960 per month (about $1,100) for two years. The experiment is a collaborative effort between the local government and the Utrecht University School of Economics, and is partly motivated by a desire to find an alternative to the Netherlands’ present welfare system, which many believe it both wasteful and of little benefit to its recipients.

As The Atlantic reports:

The Utrecht proposal—called “Weten Wat Werkt,” or “Know What Works”—includes six test groups, the members of which will receive slightly different stipends under slightly different conditions. In addition to the group that will receive €960 per month without any work obligations, there is a group that will be given that, plus an additional €150 at the end of the month if they provide volunteer services, such as doing maintenance work on schoolyards. And there is another that will have the same option to volunteer, but will get the money at the beginning of the month and have to return it if they don’t volunteer. “Human behavior is always unpredictable,” Groot says. “We want to know what motivates people, what people respond to.”

There are three other test groups. One is made up of welfare recipients who will keep receiving their benefits, but without their usual work obligations. Another is made up of welfare recipients who expressed interest in receiving the €960 stipend but will continue to receive only standard benefits. And then, lastly, there is a control group of welfare recipients who wanted to keep receiving their usual benefits.

Many believe, myself included, that this is an idea whose time has come. Philosophers and economists across the political spectrum have been exploring variations of this concept for centuries, from Enlightenment thinkers like Thomas Paine, to libertarians such as Milton Friedman and Friedrich Hayek — even Nixon proposed a similar idea. Continue reading

The Least Miserable Countries in the World

The Globalization of Plutocracy

According to a 2015 paper by American political scientist Larry Bartels of Vanderbilt University, the gap between the rich and poor — and the subsequent unresponsiveness of government to the needs of the majority — is not just a feature of United States, as a multitude of studies have revealed. The struggle between the haves and have nots seems inextricably tied to our species, varying only be degree.

For example, in almost every nation Bartels studied, the wealthy were generally and categorically opposed to social spending, even during bad economic times. Continue reading

Who, or What, is to Blame for Inequality?

Over at the Washington Post, columnist Matt O’Brian reveals how inequality has less to do with a small class of super wealthy elites, and more to do with the structure and culture of many big U.S. companies

The easiest way to think about this is to think about the different types of inequality. There isn’t just inequality between everyone, but also between everyone at a single company. Why does this matter? Well, if CEOs really are gobbling up a bigger and bigger slice of the profit pie, then inequality within society at large should have increased because inequality within companies increased. But that’s not what happened. The research team of Jae Song of the Social Security Administration, Fatih Guvenen of the University of Minnesota, and David Price and Nicholas Bloom of Stanford were able to look at what had previously between private earnings data for every company between 1978 and 2012—the best data we have so far—and found that the pay gap between executives and their own workers had barely changed during this time. What had changed, though, was the pay gap between every worker at the highest-paid firms and everyone else. In other words, inequality exploded because the top 1 percent of companies were making more and paying all their employees more. This was true across the country and across industries.

It is not entirely clear why this is the case, but one hypothesis is that technological innovation has made every industry “winner-take-all”, meaning it is easier than ever for the most ruthless and resourceful companies to dominate a particular market. This explains the rise of global behemoths like Google, Amazon, Apple, and Facebook, all of which lack any true competitors in their respective industries.  Continue reading