

Three Myths on the World's Poor - tokenadult
http://online.wsj.com/news/articles/SB10001424052702304149404579324530112590864

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aptwebapps
Of_Prometheus, you've been hell-banned for over 500 days, apparently. Here's
the text of your comment because it seems informative, although I don't think
all of it is to the point.

============================

The Gateses don't account for inflation in their prediction. Income may be
higher in the future, but so will be living costs. The standard of poverty
will simply be shifted. Furthermore, I think it's hard to reasonably expect a
world in which almost no people are poor without considering the changes in
consumption that will have to occur first. Present consumption levels won't be
sustainable with more countries consuming at the level of the US, for example,
unless new food/energy production innovations are able to mitigate it. (To
that end, I admit to wishing the level of consumption of many western
countries would be reduced.)

An anecdotal piece about income levels:

Currently, I'm in southeast Asia, and have seen first-hand income disparity.
The city in which I'm living has seen a drastic increase in hotels over the
past decade (someone reported 32 were approved in 2013, but they did not
provide evidence), and many large roads have a hotel (or two) under
development somewhere along them. These hotels are pristine and obnoxious.
Beyond these main roads, within the bowels of the city blocks with narrower,
labyrinthine, and occasionally unpaved streets, houses are barely adequate.
With the chickens and other animals running between these houses, you feel
like you're in a rural village. This is not specific to the entire city, but
that you see it in a not-very-poor neighbourhood reminds you that poverty
exists just behind the walls of rich hotels.

Food is incredibly cheap, $1 if you want something affordable; the most
expensive meal I've had was $3, although I'm sure you can find more expensive
food. Cooking isn't very efficient and cheap here, so most of your lunch and
dinner comes from stalls or restaurants. Clothing is uneven; a branded T-shirt
is $4, good shirt $30, and discounted shorts $10. Housing is cheap unless you
want western amenities; I have a comfortable apartment in a quiet alley, with
all the furnishings, a balcony, free drinking water, free laundry service, and
free cleaning service for $230 a month. Tech doesn't appear to be very
different; Laptops are 50% cheaper, as was an OTG cable, and when it was first
released the S3 was $500.

The designation of all this as "cheap", however, depends on perspective. When
comparing it with a country where good meals cost $20, especially ones that
are relatively bland in comparison with the food here, one may view living
comfortably here as an easy thing to do, but that's only if you earn a
western-level amount. Instead, a good income here will barely cover my rent,
which, seen from a local perspective, is actually quite obscene. And the
longer I've lived here, the more I've found paying $3 for ribs harder to
stomach. Earnings are commensurate with living costs, so when I think about
whether I want to live here permanently and earn money here instead of in
Europe, I have to consider that what would be a good income here would make it
hard for me to return to the west with much pocket change. (For that reason, a
friend works in the UAE and visits his wife here only every few months.)

If income levels increase here, so will restaurant bills, electricity, and the
price of a laptop. The cost of everything will be higher, and everyone will be
left with the same (in relative terms) amount of money to spend. The people
who beg for 10 cents today will start begging for $1. Everywhere I've gone,
it's been the same story: there's a balance between what you earn and what you
pay; the only difference is the bracket surrounding those two numbers. To me,
the issue here isn't of income, but of prosperity. For many people, earning
10% of what they would in the west for often harder work is not a problem,
because it's enough to support their families. What breaks my heart is that I
can't drink tap water, am weary about my health, the rivers and air are
heavily polluted, education depends on the interest levels of jaded teachers,
and earning that 10% carries with it a significant cost to the environment. I
desperately want the people here to be able to view the price of lunch for
their family as flippantly as I did, but what I think they want more is to be
able to assure that their children will be able to recover from sickness at a
reasonable cost (for free in a perfect world), get a good education and
hopefully make it to university (which is expensive but more prestigious here
than in the west), have clean water and enough food, fewer power outages, and
after that, enough money to afford the trinkets every modern human wants to
show off to their friends. I believe they will take all that before higher
income in 20 years to afford the same amount of what they get now.

I don't know whether any of this adds any value to the discussion or has too
many fallacies (I think there is some appeal to emotion), but hopefully it was
worth reading. Full disclosure: many of the people with whom I've worked here
are in conservation and political science; I likely have an environmental
bias, as well as bias relating to corruption and gender/class equality.

~~~
lmm
This is of course true; money is a means to an end. What we care about is that
people have access to good food, sanitary living conditions, and so on. But I
think progress on those fronts is real; if you compare the living conditions
of people in Brazil, Thailand or Shanghai to what they were 40 years ago, they
really are that much better off.

------
joelrunyon
> Here's our prediction: By 2035, there will be almost no poor countries left
> in the world. Yes, a few unhappy countries will be held back by war,
> political realities (such as North Korea) or geography (such as landlocked
> states in central Africa). But every country in South America, Asia and
> Central America (except perhaps Haiti) and most in coastal Africa will have
> become middle-income nations. More than 70% of countries will have a higher
> per-person income than China does today.

Woah - I would love to see some data visualization of this. If that's true -
that's really, really something.

~~~
tokenadult
_I would love to see some data visualization of this._

Hans Rosling, who runs the Gapminder website, produces some great
visualizations of world economic trends.

"The River of Myths" (a famous visualization, short)

[http://www.gapminder.org/videos/the-river-of-
myths/](http://www.gapminder.org/videos/the-river-of-myths/)

"DON’T PANIC — The Facts About Population" (an hour-long documentary,
including interesting visualizations)

[http://www.gapminder.org/videos/dont-panic-the-facts-
about-p...](http://www.gapminder.org/videos/dont-panic-the-facts-about-
population/)

------
paganel
I know correlation is not causation, but one has to put side by side the NAFTA
treaty and Mexico City's transformation since the 1980s. And on a more
anecdotal note, and also as a +1 for international free trade and a freer job
market, there's the story of my brother who was raised by my paternal grand-
parents in a mountainous village in the Carpathians.

He actually lived on raising cows and selling home-made palinka until a couple
of years ago, he had never been abroad. But then he managed to get a job as a
lorry driver and got to see half of Europe as a bonus, and he actually made
decent money. He used part of that money to buy an American-branded car
manufactured in Germany (his first ever car) and a Taiwanese-branded laptop
manufactured God-knows-where (his first ever computer, and he's 35). But then
I got to read a letter sent to the Financial Times a couple of weeks ago where
some Swedish lorry-drivers' representative was complaining of an "unfair" jobs
market in his field of work (meaning East-European transport companies like
the one my brother is working for) which got me to worry that my brother's
prospects will not be so bright anymore.

~~~
lmm
What seems unfair to me is that the companies are free to produce the products
I buy with cheap labour in, say, India. But I'm not able to buy the cheaper
versions of their products that they sell in India (individuals are allowed to
buy and personally import such products, but if you do it on a commercial
scale then that's illegal). If trade is free then it should be free for
everyone, not just when it benefits the big companies.

~~~
sopooneo
If we were able to buy at their local price, we would have effectively merged
two formerly separate markets. And the now _one_ market price would likely be
much higher.

To my layman's knowledge, it would be analogous to building a canal between a
low-lying lake and the ocean.

------
cnp
"Today, Mexico City is mind-blowingly different, boasting high-rise buildings,
cleaner air, new roads and modern bridges. You still find pockets of poverty,
but when we visit now, we think, "Wow—most people here are middle-class. What
a miracle."

\-- Bill and Melinda Gates

~~~
vinceguidry
They should visit the other 99%

~~~
gaadd33
Do you have any links to the fact that 99% of Mexico City is poor? Most
information I can find on the subject say households have a comparable level
of expenses to the average household in Germany or Japan which would seem to
be pretty middle class to me.

I found some other statistics that said that the average salary in Mexico City
is 32K/year which seems like it could easily be middle class there.

~~~
vinceguidry
I meant the other 99% of Mexico. From Wikipedia:

From the late 1990s onwards, the majority of the population has been part of
the growing middle class.[156] But from 2004 to 2008 the portion of the
population who received less than half of the median income has risen from 17%
to 21% and the absolute levels of poverty have risen considerably from 2006 to
2010, with a rise in persons living in extreme or moderate poverty rising from
35 to 46% (52 million persons).[95][157] This is also reflected by the fact
that infant mortality in Mexico is three times higher than the average among
OECD nations, and the literacy levels are in the median range of OECD nations.
According to Goldman Sachs, by 2050 Mexico will have the 5th largest economy
in the world.

~~~
bmmayer1
"The 99%" is an ultimately meaningless statistic that doesn't describe a real
problem or imply a real solution...even in your follow up you acknowledge that
"the 99% of Mexico" is actually the 21% (except not really because < half of
median income is not definitionally poverty). So what does "99%" have to do
with anything except slacktivism?

~~~
vinceguidry
I don't think you're quite reading those numbers right.

> But from 2004 to 2008 the portion of the population who received less than
> half of the median income has risen from 17% to 21% and the absolute levels
> of poverty have risen considerably from 2006 to 2010, with a rise in persons
> living in extreme or moderate poverty rising from 35 to 46% (52 million
> persons).

21% receive less than half the median income. That means that 29% receive
between half the median and the median, because the median is defined as the
level where half the population makes more than and the other half makes less.

This is a really ugly distribution. Yet the percentage of people living in
extreme or moderate poverty is 46%. Since poverty is defined by income, what
that means is that the median income level is somewhere around the moderate
poverty level. This also implies that there's a 'light poverty' level whose
income level is somewhere north of the median.

These two figures add up to a lot of poor people.

------
rumcajz
What about foreign aid putting local producers out of business? Have that been
solved already? If so, how? The article is quite vague on that point: "We also
hear critics complain that aid keeps countries dependent on outsiders'
generosity. But this argument focuses only on the most difficult remaining
cases still struggling to be self-sufficient."

~~~
tim333
You can avoid a lot of that by using the money where there are no local
producers - schools where there are no schools, hospitals where there are
none, water purification where no one is bothering and the like.

------
jerf
The fact that wealthier countries and people have fewer children is truly one
of the great paradoxes of the human condition, from a biology point of view.
I've occasionally wondered if it isn't a partial solution to the Fermi
paradox. Rich humans have fewer children for many reasons, the most
interesting one to my comment here being that on the "numerous vs. expensive
offspring" spectrum, primates & humans have basically gone all the way to the
"expensive" side, hard, and we continue to make children ever more _de facto_
expensive in various ways.

Every other biological sample we have says increased resources leads to
increased reproduction; suppose humans really do have a very bizarre, very
unusual biological niche here and indeed most species really _do_ fall into an
uncontrollable Malthusian trap because they don't go all the way to the
"expensive" side, and end up getting crowded out by the "numerous". I mean, it
is not as if this is some sort of conscious choice we have made to contain our
population, it just happened, which in some sense is why it works. If it were
anything less than nearly universal, it wouldn't be able to save us. Nor,
abstractly, is the Malthusian argument that bad... its only flaw is that it is
observationally wrong (for population), and reality trumps theory, no matter
how pretty the theory.

~~~
lnanek2
I don't understand why you think it is a paradox. If a family is poor, without
good health care for example, then more children will die or fail and it will
hurt the family harder. Their employment is also more likely to be manual
labor based where children quickly supplement their capabilities (e.g.
farming, retail). It's simple economics.

~~~
jerf
"More resources -> less reproduction" has, to the best of my knowledge, one
example in the entire animal kingdom: Us.

You're looking at the reasons, which are also interesting, but the next layer
of abstraction down from the point I'm making. (Though I'm not sure you're not
explaining why poor people have fewer (surviving) children, which is the
opposite of the data....)

------
tl
> In the course of just two decades, Thai women went from having six children
> on average to having just two. Today, child mortality in Thailand is almost
> as low as it is in the U.S., and Thai women have an average of 1.6 children.
> This pattern of falling death rates followed by falling birthrates applies
> for the vast majority the world.

I'm left wondering if stats like this lead to the "foreign aid workers will
sterilize our women" propaganda that groups like the Taliban spread.

~~~
idProQuo
While Thailand's family planning initiatives may have been inspired by similar
programs in other countries, the people who spearheaded the movement were
Thai. I don't normally like TED talks, but this one[1] does a great job of
explaining the program. Although not all developing nations can accomplish
something like this, it's good to see that it can be done.

[1]
[http://www.youtube.com/watch?v=EL9TBKSdHXU](http://www.youtube.com/watch?v=EL9TBKSdHXU)

------
rahimnathwani
"A new class of middle-income nations that barely existed 50 years ago now
includes more than half the world's population."

I found this sentence confusing as:

\- I read 'middle-income' to mean 'median income'

\- I read 'middle-income nations' to mean 'nations whose mean per capita
income is at or close to the world-wide median per capita income'

Can anyone provide an alternative (less confusing but still specific) reading?

~~~
tokenadult
Here is a link to the World Bank classifications of countries by income:

[http://data.worldbank.org/about/country-
classifications](http://data.worldbank.org/about/country-classifications)

~~~
rahimnathwani
OK, so:

\- they use mean within countries (GNI per capita is GNI divided by
population)

\- middle-income is GNI per capita from 1036USD to 12615USD

By those definitions, the sentence isn't a very strong one because: (i)
1036USD is pretty low in most places, and (ii) (I'm guessing) the median
incomes in those countries are lower than the mean incomes used to classify
the countries, the means will be dragged up significantly by outliers like
Carlos Slim.

------
soup10
What a unique and fascinating perspective. Realizing that I have no idea how
the rest of the world lives makes me want to travel more. The vast cultural
differences between parts of the US are mind-boggling on their own. Really
makes you wonder how our actions are so predicated off of what we understand
about the world.

Can you imagine Bill's current day to day involves helping the worlds poor
thrive and create societies. And he's retired. What am I doing with my life,
haha.

------
jokoon
I'm skeptic about myth #2

Foreign aid is a fragile process. If the country you're aiding is having
political problems or poverty problems, aiding a country won't mean a lot. It
will have an overall positive effect, but on the long run, I have my doubts.

Political instability, poverty, illiteracy: relieving the pain of those
problems can't be done without a minimum of politics, and when I mean that,
I'm talking of both the country you aid and the country the help comes from.

I agree with most of what they say about foreign aid, that we should not stop,
but that doesn't mean I should blindly trust charities. Democracy and free
markets doesn't bode well with generosity. Our governments don't have any
interests in getting into the politics of charities.

I really think it makes a difference when billionaires comes at those
countries's help, rather than common citizens, but I wish there would be
lobbies that work in the interests of charities. I wish there would be a true
political debate about how governments could care about charities.

------
vinceguidry
It's hilarious, watching the WSJ pretend to have a social conscience.

~~~
soDotNet
Are you for real? It's a piece adapted from Bill Gates foundation.

~~~
PhasmaFelis
It's still a bit ironic to see it in the WSJ.

------
jetru
"cleaner air"...so if one city has cleaner air, and we think(?) on average
that the air is getting dirtier...who's getting/creating the super dirty air?

~~~
dualogy
Beijing, last I checked ;)

------
alan_cx
@Of_Prometheus

You're hellbanned. Wouldn't normally bother to say anything, but you've gone
to a lot of effort there, and most won't see it.

