Wolff then goes to address what has caused the reduction of the proportion of those in poverty:Īs a matter of fact, almost all that reduction of poverty has been in one country, China, not in countries where American styled capitalism was exported I wonder what happened over this 4 decades, could it be that the world population increased by 3.4 billion people? Nearly all of it concentrated in Asia and Africa? States that suffer from weak institutions, corruption and conflict? Using this more realistic number, the number of people in poverty has increased over the last 4 decades Here's where things get pretty stupid and dishonest on GI and Wolff's part: What we can find is two things: there are materially different conditions between income groups and that the "$1.90" baseline is insufficient, yet even a Liberian family living on $116 a month has considerably better conditions than a Malawian family living on $39/m Thanks to the late Hans Rolsing and his family, we can actually do this via Gapminder and dollarstreet. To better understand poverty is to look less at the income statistics and look at that the material wealth between peoples at those different income tiers, especially in very poor nations. If we employ Wolff's $7.40 we still find that the proportion of people increasing their wealth has still risen and those making below have declined. The world bank has recently adopted these new baselines in their measurements, they can be found at PovcalNet and if we set it to $5.50/d as the baseline, we'll see a less incredible, but still impressive decline of 66% to 43% since 1981 to 2017. So many WB economists have looked to adjust the poverty line relative to nation's income bracket from low income nations at $1.90/d to high income nations at $21.70/d. Unsurprisingly, its actually hard to get 190 nations to agree on what constitutes extreme poverty. Its not necessarily useful for the poverty in middle or high income nations, but rather the global challenges and commitments agreed upon by countries. No serious institution or academic is claiming that people above $1.90/d is "ok", in fact, the world bank sites in their overview of poverty that there are different baselines that can be used and that its derived from the PPP of the 15 poorest nations. This is a very disingenuous straw-manning of the WB's position. I want to look at Wolff's objections to the global poverty rate and what he believes reduced it, something that even with all the goal posts placed in the video is recognized.Īccording to the world bank, anyone making under $1.90 is considered poor, anyone else is considered ok. Markets can be relegated or deregulated through an almost endless series of choices in order, in theory at least, to create a prosperous society or in the case of dictatorships and monarchies, at least support them and their cronies. What’s so greatly misunderstood by the Gravel institute and other free market fundamentalists is that capitalism isn’t an ends onto itself but a tool wielded by policy makers and governments in how they use the wealth acquired from commercial activity. There is no purely free market society as there is no society truly devoid of free markets as people seek to trade and accumulate wealth. Rather capitalism should be better seen as a net of various functions and policies that can support markets and the degree to which they operate. From merchant traders in ancient Phonecia to financial traders in the London stock exchange, each accrued and reinvested the wealth generated from their activities, whether speculating on commodities or shipping luxury goods through the Mediterranean. By claiming that Capitalism and reducing poverty are diametrically opposed is both highly reductive and misunderstands economic development and the role of markets. The Gravel Institute's video and the channel more broadly, is meant to be a response to the arguments provided by PragerU, Libertarians and free market fundamentalists. I want to make a video in response, but considering the amount of sources and subjects, it'd be valuable to get some feedback and corrections from people more astute on the subjects than my layman's understanding. I also personally felt that u/Parasat16 response was lacking in areas Many of the Gravel Institutes claims derive from ignoring the policies of countries like China that reduced their poverty rate and real reasons why absolute poverty has risen and why proportional poverty is difficult to measure and reduce. Countries that have adopted "American style Capitalism" have been unable to reduce poverty. Where poverty has reduced, like China, this is a result of socialist policies, not capitalism. RI: The Gravel Institute and Richard Wolff argue that Capitalism hasn't reduced global poverty, but instead has exacerbated it or at most not helped mitigate poverty.
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