How Long Should We Take To End Global Poverty?
How Long Should We Take To End Global Poverty?
By Jag Bhalla
An enormous amount of avoidable human suffering hangs on the question of how long we should take to end global poverty. I’ll explain more precisely what I mean by “poverty” shortly, but by any definition we must face clear evidence of the failure of current methods or risk repeating dire errors. Relying on growth and trickle down in the global economy’s convoluted greed machinery was never a sound plan. Rousing rhetoric about extreme poverty reductions as “one of the greatest human achievements” is rightly refuted by what Olivier De Schutter calls the “international community's abysmal record.” He writes that “business as usual … will not achieve [our] ambitious” SDG1 goal. The margin of failure will exceed half a billion people still suffering extreme poverty in 2030. And this is just ‘extreme poverty’ currently defined as $2.15 per day (which is purchasing power parity adjusted). It is a level so arbitrary and so absurdly low that there are more people suffering hunger in the world than there are living in extreme poverty.
To test the rhetoric around eradicating poverty (“greatest… achievement,” “ambitious”, ”abysmal”) let’s examine where gains from economic growth go using the World Inequality Lab’s (WIL) global income decile data (all figures PPP $)[1]. Let’s call the global bottom 10% the very poor, the bottom 30% the poor, and the top 10% the rich. Their respective average annual incomes were $260, $2,240, and $138,000 in 2017. Their shares of total global income gains were 0.16%, 3.9% and 34.9% (2007-2017). That’s 224 times more in gains for the rich than for the very poor.
This lens of comparative absolute gains can be clearer than percentage changes or complex metrics (like Gini). For instance, if just 5% of income gains of the rich were reallocated to the poor or very poor, they’d escape poverty 3 times or 11 times faster. Here’s the numbers: average yearly per capita gains for the rich and the very poor were $1,336 and $6 (2007-2017). Is an extra $6 per year for the very poor really among humanity’s “greatest achievements”? 5% of $1,336 is $67, so one less night out a year and the very poor escape poverty 11 times faster ($67 vs. $6). Practical issues aside, is getting 1/220th of the gains of the rich to the very poor really so “ambitious”? Only those beholden to an “abysmal” neoliberal mindset could imagine that negligible lifestyle changes by the rich to alleviate the direst poverty are a stretch.
Too many of even the ‘good guys’ show a deeply ingrained deference to neoliberal markets and the bad priorities that brings. The so-called win-win mechanics of markets may make it sound like a good way to get more to the poor is for the rich to also gain, but that’s a game where the already best-resourced win 220 times more than those that have the least. The very poor secure only $1 out of $640 of total global income growth. Without neoliberal blinders on it should be obvious that the needs of the very poor demand a far higher priority. They surely outweigh some of the lifestyle gains of the global top 10% (income >$60,000 in 2022). Moreso the global top 1% (income >$210,300 in 2022) whose annual gain of $4,313 is 720 times greater than the very poor get. Shift 5% of that ($216) and the very poor gain 4 times faster.
In one sense it’s puzzling why any of this should be a surprise. Neoliberal markets are built to enrich elites by every kind of extraction and exploitation. Whatever tiny fraction trickles down, the top grabs hundreds of times more. Global markets provide no robust mechanism for substantive resource delivery to the bottom. They offer no plausible scope for catching up: the GDP per capita gap between rich and poor nation has never not been growing.
Oxfam recently said “it will take 230 years to end poverty,” updating De Schutter’s prior statement of “200 years to eradicate poverty under a $5 a day line“ (implying a 173-fold larger global economy, which is ludicrous given biosphere limits). But I argue that both claims risk crypto colonialism by using very different standards. Why is $2:15 or $5 per day an acceptable threshold for others, when the US federal poverty level is $40 per day? Current methods will take 8 or 9 generations to get the global poor to $5 per day which is only 1/8th of current US poverty levels. Shockingly to match our rich-nation poverty level (again, $40 per day in the US) would take about 60 generations or about 1,600 years. And in every year of that millennia-plus global elites make out like bandits while the not-really-so-ex-colonizing nations continue to accelerate away.
In defining post-SDG goals we must be crystal clear that present methods are nowhere near morally acceptable. The present recipe of ‘aid’ (that’s mostly onerous debt), plus trade (on neo-colonial terms) and market growth (mainly benefiting elites), has failed for decades. As efforts to increase elite taxes gear up, we must keep in mind that pouring more resources into the institutional set up that presided over decades-long failures won’t solve the issues noted. WIL’s Lucas Chancel has written that, ‘rich countries only “pretend to help” poor nations’, since financial flows to the core greatly exceed assistance to periphery (typically by 300% in Africa). Doubling down on core-centric and elite-enriching methods is empirically and ethically unjustified.
We can, and must, end global poverty far far faster
END.
[1] The data and spreadsheet used in these calculations is available, please email jag@hangingnoodles
Author: Jag Bhalla, is a writer and researcher based in Washington DC.