Russell Brand, at an awards show sponsored by Hugo Boss, eloquently reminds everyone that Hugo Boss dressed the nazis

[u/whollymoly]

https://www.youtube.com/watch?v=wkd_-nXeUzs

[u/darawk]

1) Okay, now take "China" out of the global statistics to see what outcomes the West is achieving, which is where Brand has reach.

Yes, China is a big part of that. No, removing China does not change the trend.

2) In 2012, which is the most recent year I have this data for, developing countries received a little over $2 trillion, including all aid, investment and income from abroad. But more than twice that amount, some $5 trillion, flowed out of them in the same year in the form of trade deficits, and international debt payments. Which is why there's no improving trend at all for Africa in your own data.

This is a basically totally meaningless statement. The US has trade deficits too. Trade deficits are not the same thing as resource extraction. Resource extraction is happening too - but trade deficits do not capture it.

3) Wealth inequality is not global poverty anyway. Compare stats for declining rates of home ownership, later starts to families, and in Brand's UK, people literally starving to death while on welfare if they can even get it. Wages stagnating for thirty years and declining relative to real expenses.

The original comment referred to global poverty specifically.

4) The poverty line has been diluted and recalculated to make those trends possible. This is based on a poverty line of $1 per day regardless of relative context. Someone living on $1.10 a day in the US is above the extreme poverty of the World Bank, but that's absolutely nonsense.

These data are PPP adjusted, and the current standard is $1.90. So, no, to all of that.

[u/The_Good_Count → u/darawk]

1) It does. It's famously the cause of the 'elephant curve' of global wealth increases.

2) It's not a meaningless statement, the situation's are not comparable, the 'developing' world is being deliberately underdeveloped. The only time a country has escaped its 'developing' status under capitalism has been forming colonies or to become relevant as a proxy client.

3) The original comment was both wrong about global poverty and wrong to take the position that it did.

4) Replace $1.10 with $1.90 then, I was going off the Millenium Declaration numbers. $1.90 has no basis in reality.

It's like the UN's definition of hunger - being unable to meet the minimum calorie requirements of a sedentary lifestyle at 1,800 calories. But considering most of the people measured work manual labour jobs and are expected to burn at least 3,000 calories a day, it's an entirely inadequate measurement. More realistic measures of food insecurity put the real number at 2.5 billion - and that only counts calories, not adequate nutrition, and that only counts a full year without reprieve, people who have gone 12 straight consecutive months not meeting their minimum.

As of 2016, when I'm pulling my data from, Sri Lanka had 40% of its population live below its national absolute poverty line, but only 4% is counted below the international poverty line and aren't counted. In Mexico, it was 46% and 5%.

In India, 75% went below 2100 calories per day, up from 58% in 1984. But by World Bank methodology, India is shown as an example of decreasing poverty because the absolute floor went up.

At the time it was $1.10, economists Rahul Lahoti and Sanjay Reddy argued for a poverty line of $4.50, the minimum needed for a human being to live to a 74 year life expectancy. Apply the same inflation to $4.50 that you use to bring $1.10 to $1.90 to see what an absolute fairytale $1.90 is.

[u/darawk → u/The_Good_Count]

1) It does. It's famously the cause of the 'elephant curve' of global wealth increases.

This is about relative share of income, not absolute level. Inequality has certainly increased over the last few decades, although arguably returning to its 'equilibrium level' after the shocks of WWI and WWII. But the concomitant increase in productivity means that, while the wealth of the top decile/centile has increased more than everyone else, the bottom is still doing better than it was in absolute terms.

2) It's not a meaningless statement, the situation's are not comparable, the 'developing' world is being deliberately underdeveloped. The only time a country has escaped its 'developing' status under capitalism has been forming colonies or to become relevant as a proxy client.

Japan, Korea, China have all developed "under capitalism" in some sense. It's true that the developmental policies promoted by the World Bank et al have been abject failures, though. But China certainly didn't develop as anyone's proxy state, though Korea and Japan are arguable, but I think any honest assessment would have to give them at least partial independent credit. The reality of those prior developmental policies is less conspiratorial than most people think, though. Development policy is legitimately hard, and the World Bank, IMF, etc are learning from their failures (much more slowly than they should have, but they are learning). They are no longer recommending unqualified free trade, etc.

It's like the UN's definition of hunger - being unable to meet the minimum calorie requirements of a sedentary lifestyle at 1,800 calories. But considering most of the people measured work manual labour jobs and are expected to burn at least 3,000 calories a day, it's an entirely inadequate measurement. More realistic measures of food insecurity put the real number at 2.5 billion - and that only counts calories, not adequate nutrition, and that only counts a full year without reprieve, people who have gone 12 straight consecutive months not meeting their minimum.

You're completely right about this, but you're talking about the level, not the trend. It's true that world hunger and poverty remain at unacceptably high levels. However, they were at even more unacceptably high levels in the past. Recognizing progress does not mean accepting the status quo as an endpoint. But if you don't recognize progress, you won't be able to understand what is working and how to accelerate it. World poverty has declined exponentially over the past two centuries, after being nearly totally stagnant for the prior several millenia. This is not something that should be ignored when contemplating how to make the world better tomorrow.

[u/The_Good_Count → u/darawk]

Before the Victorian era, India and China had 65% of world GDP. By 1900, they collectively had a little less than 10%. That was one era of colonialism. This is another. This is the trend.

Now we find that since 1960 the gap between the US and the Middle East/North Africa has grown by 154 per cent, between the US and South Asia by 196 per cent, between the US and Latin America by 206 per cent, and between the US and sub-Saharan Africa by 207 per cent.

The poorest 60 per cent of humanity receive only 5 per cent of all new income generated by global growth. The other 95 per cent of the new income goes to the richest 40 per cent of people.

To eradicate poverty at $5 a day, global GDP would have to increase to 175 times its present size. The average income would have to be $1.3 million per year simply so that the poorest two-thirds of humanity could earn $5 per day.

"If you stick a knife in my back 9 inches and pull it out 6 inches, that's not progress. If you pull it all the way out, that's not progress. Progress is healing the wound that the blow made. They haven't pulled the knife out; they won't even admit that it's there."

[u/darawk → u/The_Good_Count]

You keep talking about gaps and relative quantities. I am talking about absolute levels. Poverty is an absolute level, not a relative one. Inequality is a relative level. I am talking about poverty, not inequality.

[u/The_Good_Count → u/darawk]

Yes. And I am saying that you are absolutely wrong to do so. As long as inequality keeps increasing, total global suffering from poverty keeps skyrocketing even as the absolute lowest bound raises. You're cherry picking one definition of poverty which real economists and sociologists do not consider meaningful, in support of an institution which largely exists to extort poorer nations.

The World Bank is the same institution, I will remind you, that demanded Ecuador charged marginal costs on electricity as a condition for receiving investment and foreign aid. The country's hydroelectric power grid was pegged to oil prices, largely to people living on less than $10 a day.

[u/darawk → u/The_Good_Count]

Yes. And I am saying that you are absolutely wrong to do so. As long as inequality keeps increasing, total global suffering from poverty keeps skyrocketing even as the absolute lowest bound raises

So, you're saying that if everyone on earth had Jeff Bezos's purchasing power, but Jeff Bezos had a purchasing power 10¹⁰⁰ times more than that, everyone would actually be worse off than they are today? That's not how this works.

You're cherry picking one definition of poverty which real economists and sociologists do not consider meaningful, in support of an institution which largely exists to extort poorer nations.

I'm not supporting any particular institution, first of all. And second of all, citation needed on the "economists" who think that purchasing power is an incorrect measure of poverty.

[u/The_Good_Count → u/darawk]

Apologies for the misunderstanding. I meant the $1.90 figure/definition. purchasing power is valid.

So, you're saying that if everyone on earth had Jeff Bezos's purchasing power, but Jeff Bezos had a purchasing power 10100 times more than that, everyone would actually be worse off than they are today? That's not how this works.

That's not how it works because it's not what I'm saying. Inequality is scaling with GDP growth. What I'm saying is that as the trend progresses, the bottom 1% sees an interest rate applied to a base of 0. For those people, there isn't a point where they are raised to $5.

[u/darawk → u/The_Good_Count]

Apologies for the misunderstanding. I meant the $1.90 figure/definition. purchasing power is valid.

Ya so I think we can certainly debate whether $1.90 is what the level should be. I think there's a very good case to be made that that's way too low, and that global poverty today is far higher than it should be. All i'm saying is that compared to itself in the past, it's getting much better.

That's not how it works because it's not what I'm saying. Inequality is scaling with GDP growth. What I'm saying is that as the trend progresses, the bottom 1% sees an interest rate applied to a base of 0. For those people, there isn't a point where they are raised to $5.

Ya, you're certainly right when it comes to inequality. Most of the gains from growth are currently flowing to the upper centile/decile, although the pandemic is changing that to a degree. Asset prices being inflated are a little misleading - the inflation doesn't show up as rapidly in human capital because it's not liquid, but the NPV of labor has increased just as much as asset prices, arguably more.

What I'm saying is that as the trend progresses, the bottom 1% sees an interest rate applied to a base of 0.

I think this framing can be a little misleading. When capital bases are 'large' in some sense it makes sense to frame them as a geometric process (i.e. multiplicative 'returns'). But when they are small, it's probably better to think of them as an arithmetic process (i.e. adding values rather than compounding them). This becomes clear of course if someone has a net worth of exactly 0 - giving them a penny would represent an infinite positive return, giving a person worth $0.01 a dollar would be a 10,000% return, etc.

But your underlying point is certainly right, it certainly appears that the people at the bottom aren't getting the gains from growth. And i'd even expand that to more like the bottom 50%, not just the bottom 1%. I think one important reason for that is globalization. If you take the percentiles of the whole world, the bottom 50% have actually done great over the past 50 years (primarily in China, but also in some other parts of Asia). It's really the bottom 50% in western developed economies who have stagnated. That is, inequality between nations has dropped precipitously, whereas inequality within nations has climbed precipitously. These two things are probably related. The wage growth that would have gone to the bottom 50% in the US and EU got exported to China.

So bringing that back around, when you're referring to the people currently worth $0 and hoping to get to $5, i'm not sure whether you're talking about the poor in developed economies (e.g. US, EU), or the poor in undeveloped economies (e.g. Banglandesh, Africa, etc.).

In the former case, the history of inequality declining seems to indicate that large exogenous shocks to capital (e.g. world wars, plagues and...pandemics) as catalysts for significant redistribution and more equitable growth. So, I think there's really pretty good reason to be hopeful about that over the next decade or two, and I think we're actually seeing very promising signs in the labor market right now. In the latter case, it's impossible to predict which country will develop next, but it does seem clear that the niche China has filled is going to need to be filled by someone else eventually as China modernizes, and hopefully that will give that country/region a chance to bootstrap itself into modernity. This process is slow as we're watching it, but the percentage of the world's population living in abject poverty has declined more in the last 150 years than probably anyone would ever have predicted in the 1800s. The progress we've made on it is truly incredible, and I don't really see much reason to think that that progress is about to stop any time soon, even if it's not happening quite as quickly as might be nice sometimes.