World Poverty Rate Halved since 1990.

[kandrathe]

Imagine what we might do if we really tried, and stopped fighting.

According to this Economist article, Not always with us, we are moving as a society towards less suffering.

The country that cut poverty the most was China, which in 1980 had the largest number of poor people anywhere. China saw a huge increase in income inequality—but even more growth. Between 1981 and 2010 it lifted a stunning 680m people out poverty—more than the entire current population of Latin America. This cut its poverty rate from 84% in 1980 to about 10% now. China alone accounts for around three quarters of the world’s total decline in extreme poverty over the past 30 years.

I would attribute this feat to observations made by economists Dr. Ronald Coase and Dr. Ning Wang, in their book -- How China Became Capitalist.

The Communist Party's role in bringing this to pass, the authors say, consisted mainly in getting out of the way. Coase and Wang conclude that "the gradual withdrawal of government from the economy, rather than the strength or omnipresence of the political leadership ... explains the success." The guiding principles have been pragmatism, experimentation and the Confucian injunction "to seek truth from facts"—or, as Deng Xiaoping, who pushed through many of the post-Mao reforms, put it in a famous dictum: "Practice is the sole criterion for testing truth."

There are of course issues with rapid growth in China, such as ecological ramifications. A prosperous China while also lifting its neighbors, may also threaten them militarily.

India is the next big hurdle, with about 1/3 of their 1.2 billion people living in extreme poverty. Again, economic liberalization has taken a hold;

"The fruits of liberalisation reached their peak in 2007, when India recorded its highest GDP growth rate of 9%. With this, India became the second fastest growing major economy in the world, next only to China. The growth rate has slowed significantly in the first half of 2012. An Organisation for Economic Co-operation and Development (OECD) report states that the average growth rate 7.5% will double the average income in a decade, and more reforms would speed up the pace." -- Wiki

And, then there is Subsaharan Africa and some parts of Central and South America. Progress is being made in Africa, but food insecurity, a lack of infrastructure, and ongoing conflicts there are slowing the pace. Africa needs investment in roads, sanitation, schools, etc. I have many friends in Kenya, and from Kenya, which is one nation struggling politically with development. Equality is in access to things that help to make you prosperous, like roads, railroad junctions, grain storage, warehouses, clean water, sanitation, health services, etc. These are the things that help lift people from poverty, and create jobs in the building and the maintaining of our societies.

[Jester]

Optimistic. And true. There has been more convergence in global incomes in these last couple decades than in the 40 years prior. Why that is, is tough to say. China is obviously an enormous part of the story. But it is a true story.

-Jester

[Occhidiangela]

The (criterion) bar will be moved to what "poverty is" to suit whomever is reporting.

That criticism made, if the average global "quality of life" has increased since 1990, good.

[kandrathe]

Aye. It is entirely true. The impoverished world is measuring a few dollars spending per day. In the US, we measure income $23,050 for a family of 4 or $5762 per person ($16 per day) -- impoverished people get some freebies so their daily consumption would be higher.

[FireIceTalon]

Yep, things are just so glorious, especially in China. Guess thats why working conditions are improving so much there they have to put nets up around the factories so that workers cant jump off the rooftops to commit suicide anymore.

You can throw a bunch of numbers out there, doesn't necessarily reflect actual material conditions. If living off $2 a day instead of $1 a day counts as cutting poverty in half, well fuck me to tears, that is just an incredible improvement in the standard by which we measure such things. These numbers are from the World Bank, perhaps the largest of all bourgeois institutions - so I will take such reports with a grain of salt (to be generous).

[Taem]

Are you suggesting we are nearing the "tipping point", the precipice of equality (stemming of course from a globally connected world as never before with the internet and smart phones) where, if we dare, the world may enter a new stage of the one-world economy?

Now I know you didn't actually say this, but by your words, the suggestion of global equality is enticing, and with that eventually comes a one-world currency - think about it - because when we are all equals, all our works and goods are valued the same at this point so you can't get "cheap" labor anymore. The truth is, the more people get connected, the more they realize what they can have, and then demand it, and the prices of their services goes up. And the reality is, we are all getting more and more connected everyday, thus even in the most despot areas of the middle-east, legions of like-minded people can gather with a mere tweet. A service (such as your typical factory worker) can be just as valuable a good as any commodity (such as gold), thus it's only a matter of time before the inevitable; I'm sure you can see where I'm going with this: where corporations can no longer exploit cheaper workers in foreign countries to save a buck. And when this time comes, and the majority of the world has reached a saturation of equality, the one world currency abounds. To me, this is the penultimate outcome of what you have pointed out, which brings this thought experiment full circle.

I would like to add that I don't believe I'll live long enough to see this scenario play out because I believe global population growth is unsustainable into the near future in terms of food and drinkable water. It's getting hotter, and the lakes around here are getting lower and lower; we're overfishing the sea, and I don't know how many more resources like this we can burn up before that spells the end of us (we're suppose to run out of fish by 2048 or 2050). Anyways, there's food for thought, if I may throw the monkey-wrench in your astute observations of what the world might look like if we "stopped fighting" and became equals.

[Jester]

A service (such as your typical factory worker) can be just as valuable a good as any commodity (such as gold), thus it's only a matter of time before the inevitable; I'm sure you can see where I'm going with this: where corporations can no longer exploit cheaper workers in foreign countries to save a buck. [...]
And when this time comes, and the majority of the world has reached a saturation of equality, the one world currency abounds.

All else equal, the marginal compensation for labour should equal out over time, and skill premia should converge on time-discounted labour. (That is, everyone earns the same, adjusted for their education level, for which they get paid a bonus to compensate for the time invested.)

Of course, all else isn't equal, and a thousand different factors will keep wages in some places higher than others.

What does this have to do with currency?

-Jester

[Taem]

Of course, all else isn't equal, and a thousand different factors will keep wages in some places higher than others.

Of course. And it won't be for a very long time. I was pointing out that if you follow the train of thought far enough in regards to worldwide economic poverty level improvement, you'll see the trend, that since smartphones and our connected world, the poverty gap is shrinking - as pointed out by Kath - and if it keeps happening at it's current pace, it's inevitable we will reach a level of equality sooner or later.

What does this have to do with currency?

My understanding of commerce is that a countries monetary value is based mostly on it's net worth in terms of what it exports, rather that be goods or services. In the above hypothesis (this is more of a world such as FIT's utopia, however with Capitalism), everyone is on equal standing so all monetary values are equal thus negating the need for multiple currencies, hence a one-world currency. I don't even know if this would ever happen, but it seemed logical to me when I wrote it.

[kandrathe]

The most important factor I've found in pay equity in this era is self-awareness. If you don't know what something is worth, you are unlikely to negotiate a fair price. The people who are paid the most in the US, first know what they are worth, are willing to walk away from a bad deal and then are also the best negotiators.

Some day I suspect there will be Yuan world currency.

[Jester]

Of course. And it won't be for a very long time. I was pointing out that if you follow the train of thought far enough in regards to worldwide economic poverty level improvement, you'll see the trend, that since smartphones and our connected world, the poverty gap is shrinking - as pointed out by Kath - and if it keeps happening at it's current pace, it's inevitable we will reach a level of equality sooner or later.

Some have suggested that as between-country inequality shrinks, within-country inequality increases. (I've actually been contemplating doing some work on this at some point, but it's still pretty hypothetical.) It's not so clear that we'll ever live in an equal world, but we'll probably live in one less unequal than the one we were born into.

My understanding of commerce is that a countries monetary value is based mostly on it's net worth in terms of what it exports, rather that be goods or services. In the above hypothesis (this is more of a world such as FIT's utopia, however with Capitalism), everyone is on equal standing so all monetary values are equal thus negating the need for multiple currencies, hence a one-world currency. I don't even know if this would ever happen, but it seemed logical to me when I wrote it.

Money is valued at whatever clears the market, or whatever you can get for it. Sometimes that's as you describe, basically related to net exports, but sometimes not. Banks, governments, and even investors intervene all the time to change the value of currency.

If it is the case that all peoples' income and wealth are, now and forever, perfectly equal, then you're right, there would be no currency appreciation or depreciation, because there could be no such thing as a trade surplus/deficit. (Edit: Nope, nevermind: differential population growth could still create trade imbalances...) But that would only be true in a very extreme, static world. In reality, even if countries converge more or less, the odds that all flows are going to balance out exactly are pretty low.

But having all currencies at the same value is not the same thing as having one currency. That's the difference between, say, the pre-WW1 gold standard, and the Euro. It's identical, so long as nobody wants to leave the currency union. But you can leave and re-enter a gold standard (where everyone's currencies are *worth* the same), but you can't leave and re-enter a currency union (where everyone's currency *is* the same).

-Jester

[Jester]

The most important factor I've found in pay equity in this era is self-awareness. If you don't know what something is worth, you are unlikely to negotiate a fair price. The people who are paid the most in the US, first know what they are worth, are willing to walk away from a bad deal and then are also the best negotiators.

Is that self-awareness? Or is it opportunity cost and risk?

If you have a variety of potential good options, and a stock of wealth (family or otherwise) to fall back on, you can bargain hard, because the potential downside is low. If you don't, maybe you're more worried about losing the opportunity than about squeezing the most out of it. This would be entirely rational behaviour.

This would be both true of aspiring grads with education and talent, and of poor people looking for a job to keep the wolf from the door. It's been well demonstrated that welfare nets in Europe increase the time of transitional unemployment, but have little effect on structural unemployment. People don't just stop looking for work, but they do become pickier in finding a good job - that is to say, they know what they're worth, and bargain harder. If they had to choose between taking a job quickly, or going hungry and homeless, they might not bargain so hard.

This is one reason why the benefits of privilege can't just be measured by outcomes. Risk behaviour changes based on unobserved second-best options.

-Jester

[kandrathe]

This is one reason why the benefits of privilege can't just be measured by outcomes. Risk behaviour changes based on unobserved second-best options.

What you say is true. It would be true then that in most things, like finding a place to live, those with some means have the luxury to be patient and wait for the "right" opportunity.

What you point out is also probably a flaw in the social safety net. We would probably agree that deprivation is a pretty horrible sword of Damocles held above the heads of the impoverished. Yet, as a society we use that threat to propel the otherwise able into productive lives (ergo, productive for whom?). The disabled are forced to suffer a miasma of red-tape in order to continuously prove their inability to work. One strange Midwestern value here is our "work ethic", which we tend to take for granted -- neither the idle rich, nor the idle poor, or idle anyone get much respect here.

We are in an era of statism. There are some vestiges in the US of individualism, but these are disappearing rapidly. Mom and pop shops cannot compete with State subsidized Walmart. Just as it is hard for the OECD nations to compete with a China, where much of their economic advantage is derived by State sponsorship, individuals cannot for long compete when the scales are tipped by massive state interventions.

As socialism creeps deeper into governments, it is fair to say, we all become dependents upon the engine of state for our survival. Perhaps for some more than others, but still, in macroeconomic terms, somewhere between 20% to 30% of US GDP is derived directly by government consumption, with perhaps another 30% to 50% indirectly influenced by subsidies or tax advantages. I've heard some talk of a base federal supplied "salary" -- that would be above the ~ $5000 which would be your EITC (Earned income tax credit) if you earned nearly zero (or a daily rate for a family of four of $3.42 which is still nearly double the rate of developing world).

It matters little what system we look at, the GINI coefficients for inequality are very bad for the capitalists like Russia, or China. The oligarchs and plutocrats abscond with their corrupt booty, just as it is in the US -- where the suburbs of Washington DC, comprise 7 of the top 10 richest counties in the USA.

I guess I would still say that in the face of this type of system, where everything is given a price tag, and everything is treated as a short term investment, it is most important to value yourself, and know what you are worth (to the system). I guess that is why in some way, Millennials are both rejecting this unsustainable circus we've erected over the last century, and benefiting from its social safety net.