The rich get richer but absolute poverty is being beaten
WE’RE regularly told that rising inequality is a great social evil: that it’s far better if places are more equal, that people are more equal, whatever the level of actual wealth that has been achieved.
At which point people like me start shouting “Piffle!”. For while it might indeed be true that at any level of general wealth less inequality might be a good idea (depends upon your personal views really, but it’s possible) it seems clear and obvious that everyone being equal at $1 a day is worse than having more inequality but most people are on much more than $1 a day.
That might sound extreme: but we really do have people complaining that China’s economic resurgence is leading to greater inequality and that this shows that it’s a bad thing. Except, of course, that economic resurgence is also dealing with the $1 a day poverty:
First, it appears to be true that China has made rapid progress in reducing poverty in its population. According to Li Xiaoyun’s tables just under 13% of China’s population lives in extreme poverty at incomes lower than $1.25 per day in 2011. (The next three slides are taken from an extensive presentation on China’s poverty strategies by Professor Li Xiaoyun, China Agricultural University; link.) This is a dramatic reduction from an estimate in excess of 80% at this level in the late 1970s. This means that rural incomes have risen substantially since 1978.
I dunno about you but I’d put forward that a lot more good has been done by reducing absolute poverty than any harm done by increasing inequality.
And it’s also worth noting that this has been the general experience in this last 30 years or so of neoliberal golobalisation. Yes, theree’s been rising inequality within each country as a result of it: indeed, theory would predict that this would happen. But there’s also been a fall in global inequality: and the largest reduction in absolute poverty in the history of our species. There are now fewer people in that $1 a day poverty, a smaller proportion of the much larger population. All of which is good and which more than makes up for, in my opinion of course, any rise in the fact that the Jones’ have yet even more than I do.
Photo: Chinese peasants and their half-naked children, routed from their homes during the great flood of the yellow river were here receiving relief money at Chengchow, China on July 19, 1938. The great river, creaking through dikes and racing through lowlands, took an estimated 150,000 lives. (AP Photo)
Posted: 10th, June 2013 | In: Money Comment | TrackBack | Permalink
