Poverty is on the decline, worldwide

[Gordon B]

Here's a link to the article in the Quarterly Journal of Economicshttp://www.mitpressjournals.org/doi/...2006.121.2.351

The number of poor people in the world declined by somewhere between 250 million and 500 million between 1970 and 2000, according to the study by Xavier Sala-I-Martin. Inequality within many countries, including the US, China, and Russia increased but inequality across countries declined. I expect the worldwide income convergence to continue as formerly poor Chinese and Indian people rise out of poverty.

The ranks of the poor declined the most in Asia but actually rose in Africa over the 30 year period.

[Adam Hill]

http://www.globalissues.org/TradeRelated/Facts.asp

[walto]

Originally Posted by Adam Hill

http://www.globalissues.org/TradeRelated/Facts.asp

1. 51 percent of the world’s 100 hundred wealthiest bodies are corporations. source 5

That's an odd factoid. Would it be better if a higher pct were individual human beings?

[walto]

And is Jennifer Anniston one of the 49% of those wealthiest bodies now?

[Gordon B]

Adam, the site you posted from selectively came up with statistics designed to get people angry about inequality of wealth. Don't you agree?

The piece I linked to was an academic research paper by an economist. Have you had a chance to peruse it?

My question for egalitarians reading this thread,

What is more important to you, world-wide income disparities and global poverty or income disparities and poverty in the U.S.?

I think every once in a while, there should be political threads celebrating good news. This is my attempt to do so.

[Gordon B]

Originally Posted by walto

And is Jennifer Anniston one of the 49% of those wealthiest bodies now?

and most in-shape bodies.

Caryn James slammed her in today's NYT. http://www.nytimes.com/2006/06/05/mo...=1&oref=slogin

[walto]

Ah, bodies means states v. corps. Got it. Thanks, Adam. But do we want the economic activity (whatever that is, exactly) to be concentrated in our states rather than our businesses? Or is it the concentration among so few businesses that we're supposed to be worried about? Also:

The world's top 200 corporations account for over a quarter of economic activity on the globe while employing less than one percent of its workforce.

That's from the piece cited as the source of the cherry I picked. But what correlation would be best here? If the bigger corps employed a higher pct of the world's workforce while the smaller corps employed a smaller pct.--would the world be a better place? I know factoids like that are supposed to make us mad, but I don't really know what to make of them....

[Uli]

Originally Posted by Gordon B

Have you had a chance to peruse it?

My question for egalitarians reading this thread,

What is more important to you, world-wide income disparities and global poverty or income disparities and poverty in the U..

Egalitarian is such an ugly word. From an economic politics perspective I believe both may be equally important.

[Adam Hill]

Originally Posted by Gordon B

Adam, the site you posted from selectively came up with statistics designed to get people angry about inequality of wealth. Don't you agree?

Yes, I would agree, but that doesn't mean those stats aren't accurate. Nor does it mean they aren't incredibly maddening and saddening.

You also know, I'm sure, that there is a fair amount of disagreement over how poverty is calculated.

Sorry, I don't share in your 'good news.' All the cheerleaders of neoliberal economic policies have been telling us for decades now how much better the world is getting for the poor.

Have you worked with poverty issues?

[Adam Hill]

Walt, you coy minx, you know what to conclude from those factoids--about the concentration of wealth and power and the actions of certain corporations in less developed countries. Not all of those stats have to make you mad. In fact, none of them have to.

Poverty is on the decline, worldwide

I thought it was getting a little lonely down here.

[Gordon B]

Originally Posted by Adam Hill

Sorry, I don't share in your 'good news.' All the cheerleaders of neoliberal economic policies have been telling us for decades now how much better the world is getting for the poor.

Either you think that a reduction of the world's poor by > 200 million people is not good news or you've found a flaw in the methodology of the article linked by me. Which is it?

[walto]

Originally Posted by Adam Hill

Walt, you coy minx, you know what to conclude from those factoids--about the concentration of wealth and power and the actions of certain corporations in less developed countries. Not all of those stats have to make you mad. In fact, none of them have to.

I don't mean to be coy, and I entirely agree that there's plenty to be mad about. I suppose that the poor can't get any poorer than starvation, but the rich are certainly getting richer. And to the extent that this incredible wealth is simply a function of the accumulation gains in the value of privately held natural resources while the owner sleeps (as it has always been) it will always piss me off. It's so simple (if not so easy) to fix, but we're no closer today--at least in America--than we were in the 19th Century.

Gordon, it's my view that everybody in the world today could be pretty well off with a couple simple fiscal reforms, so how much should I be celebrating the fact (if it is one) that the rising tide of the rich has lifted a dozen more boats?

[Adam Hill]

Originally Posted by Gordon B

Either you think that a reduction of the world's poor by > 200 million people is not good news or you've found a flaw in the methodology of the article linked by me. Which is it?

I'll download and read it later, but I'm not a methodology expert, Gordon. I can, of course, point you to many other articles that will speak to you about the actual state of poverty in the world. Too, if you google, you'll see there's much debate on how poverty figures are calculated. Do you really congratulate yourself over supporting neoliberal economic policies by citing one paper? Again, have you ever worked on poverty issues?

[Adam Hill]

Originally Posted by walto

I don't mean to be coy, and I entirely agree that there's plenty to be mad about. I suppose that the poor can't get any poorer than starvation, but the rich are certainly getting richer. And to the extent that this incredible wealth is simply a function of the accumulation gains in the value of privately held natural resources while the owner sleeps (as it has always been) it will always piss me off. It's so simple (if not so easy) to fix, but we're no closer today--at least in America--than we were in the 19th Century.

I agree with you, well, maybe not about the simple to fix part.

[Gordon B]

Originally Posted by walto

Gordon, it's my view that everybody in the world today could be pretty well off with a couple simple fiscal reforms, so how much should I be celebrating the fact (if it is one) that the rising tide of the rich has lifted a dozen more boats?[/FONT]

Walt, I can't say that I agree with you that the decline in poverty in China, Korea, Thailand, India, etc. if you accept it, is due to "the rising tide of the rich", nor do I think that 200M to 500M is small potatoes.

I didn't ask Adam or you to celebrate. I only questioned why he doesn't think that declining world poverty is good news.

I'm also very skeptical that

Originally Posted by Walto

everybody in the world today could be pretty well off with a couple simple fiscal reforms

. We can debate this further over Afghan food.

[walto]

Walt, I can't say that I agree with you that the decline in poverty in China, Korea, Thailand, India, etc. if you accept it, is due to "the rising tide of the rich",

I guess it's kind of a chicken/egg thing. The more low-paid Indian programmers that get used, the more zillionaires there are at corporate headquarters. The board makes the decision to outsource, so there's a kind of symbiosis. But when these fatcats invest their millions in real estate, making it more expensive for those programmers to live, that symbiosis ends and parasitism takes over.

Afghan food is quite conducive to talk about land value taxes, I understand....

[Gordon B]

Originally Posted by Adam Hill

Do you really congratulate yourself over supporting neoliberal economic policies by citing one paper? Again, have you ever worked on poverty issues?

Where have I even spoken on neoliberal economic policies? I can't even define what they are? I've read a lot on poverty in the last year but only books by economists --not any by left or right polemicists. I have recommended a couple of them. No, I have not personally worked on poverty issues. I haven't worked in baseball or jazz either.

Adam, I recommend you at least read the abstract and the conclusion. I have not yet read the entire thing myself. The article is not about economic policies. There's no political slant. Yes, it's about measuring poverty so it's something you'll find interesting. I found it interesting that to answer the question "Is inequality increasing or decreasing" the answer could be either increasing or decreasing depending on whether the question was meant to be world wide or country by country.

[Douglas]

fwiw here's a review of a earlier version of the Sala-i-Martin paper and a couple of others from a few years ago.

[Gordon B]

Originally Posted by Douglas

fwiw here's a review of a earlier version of the Sala-i-Martin paper and a couple of others from a few years ago.

I enjoyed that. Thanks, Douglas.

[Adam Hill]

Yes, thanks, Douglas.

Gordon, what do you make of that article's criticism of Sala-i-Martin's methodology?

[Dr Dave]

I wish you motherfuckers would stop pointing me to 47-page documents written by academics! You're cutting into valuable online time that I need to read esoteric wine shit, play games, and look at pornography!

[Gordon B]

Originally Posted by Adam Hill

Yes, thanks, Douglas.

Gordon, what do you make of that article's criticism of Sala-i-Martin's methodology?

Where did the author say that household estimates were superior to National Account estimates, Adam?

[John L]

A couple comments:

In most developing countries, you cannot measure poverty with national accounts data. There is little or no data on distribution in the national accounts. Household survey data are almost always used for this purpose, although they can be used in different ways.

Income data from household surveys often underestimate actual living standards due to the fact that, in developing countries, much income comes from informal sources, and the population can feel intimidated about revealing this. As developing countries grow, the share of income coming from formal sources typically grows, which can lead to overestimates of income growth and poverty reduction, if these estimates as based on income data from household surveys.

Data on expenditures, including savings, are typically more reliable. Households feel less intimidated about revealing expenditures. For this reason, reported expenditures typically exceed reported incomes in household surveys in developing countries.

Consumption measures are similar to expenditure measures, but exclude savings. In fact, poor Chinese tend to increase savings at the same rate as consumption, implying that consumption measures of poverty tend to understimate poverty reduction in China.

Finally, information based on any given single poverty line is very incomplete. Understanding changes in poverty imples understanding changes in the entire distribution of poverty. A single poverty line does not pick up increases or decreases in income (consumption) below that line, and can give too optimistic (pessimistic) a picture of poverty reduction (increases) in the case that incomes are clustered around the line. Changing where to draw the line can change drastically estimates of poverty and poverty reduction.

1998 is a strange year to choose for comparison with
1987. The inflation associated with the global financial crisis of 1998 temporarily increased poverty in a number of emerging market economies that have otherwise made good progress toward poverty reduction. Consumption measures of poverty reduction are much more optimistic if extended to 2003 or 2004.

The balance of evidence does suggest that (especially) China and India have made significant progress in poverty reduction in recent years. 25% of the world's population, and an even greater share of the world's poor population, live in those countries. So the overall conclusion about substantial poverty reduction on aggregate would appear to be correct. Yet the poorest regions of the world (Sub-Saharan Africa) have not shared much in this good fortune.

[Gordon B]

Originally Posted by John L

Yet the poorest regions of the world (Sub-Saharan Africa) have not shared much in this good fortune.

That was pointed out in the study that used national accounts data. Sub-Saharan Africa has gotten poorer, by the measures used in that study.

John, thank you for your comments. You've added a lot of depth to the discussion. I'd love to see you copy & paste what you wrote in the comments section of the Mankiw blog.
http://gregmankiw.blogspot.com/2006/...won.html#links

[letchhausen]

Originally Posted by Dr Dave

I wish you motherfuckers would stop pointing me to 47-page documents written by academics! You're cutting into valuable online time that I need to read esoteric wine shit, play games, and look at pornography!

Or point us to the stats on how many women are turning 18 every day across the globe. From various sites I've been surfing that promise new original content every week, it seem a tremendous amount. I'll guess in the interest of academic necessity I will have surf every site and take a count myself. Dr Dave, yr welcome to help out on this project in the name of truth......

[Dennis Gonzalez]

I expect the worldwide income convergence to continue as formerly poor Chinese and Indian people rise out of poverty.

Poverty is on the decline, worldwide.

Funny man. Great fantasy.

Originally Posted by Dennis Gonzalez

I expect the worldwide income convergence to continue as formerly poor Chinese and Indian people rise out of poverty.

Poverty is on the decline, worldwide.

Funny man. Great fantasy.

Maybe if everybody practiced birth control poverty would decline.

[Hudson Boy]

Originally Posted by jazzbluescat

Maybe if everybody practiced birth control poverty would decline.

The countries with the highest standards of living usually have small families, on the average, in their societies.

[Gary Sisco]

It's rather the other way around. People have small families *because* they live in societies of greater affluence.

Thing with statistics is this: no human being is an "average" or "median" or anything else.

Pay a CEO 200 million american bucks as salary and a coffee picker one dollar american a day. (I'm making a guess with inflation; when I lived in Central America in the 80s, a coffee picker made about 75 cents american/day, for working dark to dark.) Whatever. Make it a buck and a quarter today. What the fuck. Everyone's getting richer, after all, across the board.

What's the "average" income? ($100,000,182.5 US)

Who enjoys it?

The truth is, for all the playing with statistics, there has never been a time in history when the divide between the wealthy and the not has been greater, globally or within US society itself, where it is just as mindboggling.

It took me years to get the city of Burlington's "median" income out of various governmental sources. They always insisted on using the county's median, which included several towns where there are more multimillionaires and several billionaires than in most places in the world. More per square inch than most, actually.

The county median income at the time was something in the order of $36,000 US/year.

The city's median at the same time was about $19,000/year.

Rather a different picture. And all that tells us is that half of the people made more than and half less than $19k. Tells us nothing about how much more or less. Same with the county figure.

In short, they tell us nothing about the actual lived life of human beings as they are lived, not imagined in aggregate.