Poverty Around the World is Decreasing Rapidly

Thanks to the media drumbeat of Fake News, people have no idea that poverty is decreasing around the world. 

Oxfam Blames the Wealthy for Poverty

Oxfam (a UK based charity whose mission is "fight poverty") recently sent out this appeal (see below) in which they imply that poverty is caused by businessmen who are wildly successful. They are repeating the falsehood that wealth is a zero sum game -- that the less successful would be wealthier if, somehow , the really successful were less so.

The fact of the matter is that the number of people who are desperately poor (living on $1/day) has been declining steadily and significantly over the last fifty years -- i.e. the time frame over which all the wealthy people whom Oxfam disparages accumulated their wealth. The poor have become less poor precisely because of that wealth creation. Bill Gates wealth via Microsoft is not the reason the poor are poor; it is why they are less poor. Mr. Gates did far more for the world's poor by making Microsoft a success than he will ever do with his foundation (and the two are non mutually exclusive).

Oxfam's sloppy thinking (I'm being generous here) is deplorable.

	January Newsletter
	Just 8 people now have the same wealth as the poorest 3.6 billion
	Have you seen the news this week that just 8 men own as much wealth as the poorest half of the world's population? This news comes after the release of our new report "An economy for the 99%". Here at home and across the world, millions of ordinary people have been left behind by an economy for the 1%. We must take urgent action to reverse dangerous inequality – not accelerate it. The poorest people in our societies have been hit hardest – particularly women who suffer high levels of economic discrimination, work in the lowest paid jobs, and take on the lion's share of unpaid care work. Read more about staggering inequality and how you can take action >> Find out more

Poverty and Globalization

Mark Perry notes that economists Maxim Pinkovskiv and Xavier Sala-i-Martin published this paper at the National Bureau of Economic Research.  Using parametric methods to estimate the income distribution for 191 countries between 1970 and 2006 they show how dramatically the level of abject poverty ($1/day threshold in constant dollars) has declined since 1970. That's 250MM fewer people living on $1 per day. You may not see this too many places because it runs counter to the media mantra that free trade and globalization have hurt the poor. Does it look that way?  

Blaming the Symptoms

If you are slow to function the "morning after", do you blame the headache for your woes? Or do you attribute it to some bad judgments you made the previous night? What would be the most effective solution? Aspirin? Or less alcohol the next time?

If someone is in poor health because they are very overweight, do you blame the obesity? Or do you attribute it to poor choices about diet and lifestyle? What would be the best solution? Diabetes and blood pressure medicine? Or less eating and more exercise?

When we see children who are failing academically, getting involved with gangs and drugs, do we blame poverty? Or do we attribute it to bad choices that they and their parents have made? What would be the best solution? Hand out money to compensate for their distress? Or discourage more bad behavior? 

Why, of course, we blame poverty! We hand out money and make excuses for the bad behavior choices. The fact of the matter is that poverty is a symptom, not a condition that you catch like a virus. In the US at least you are very unlikely to be poor if you do three things:

1. Graduate from high school (it's free and graduating these days has pretty much become a "won't do", not a "can't do").
2. Get a job -- any job.
3. Get married -- and have children (in that order).

Just knowing those factors (and your age), I can predict your income levels fairly accurately.

If you blame the headache and take aspirin, you're going to continue having hangovers.
If you keep eating and not exercising, you're going to be continue to be obese and have related health problems no matter how many drugs are prescribed.
If you keep encouraging people to have children without marriage (the entire welfare system discourages marriage), if you keep paying them not to work, you're going to continue having high levels of poverty.

Why do we keep blaming the symptoms and not the underlying behavioral causes? It must be that we're okay with the outcomes as long as we can just mitigate their pain. Take two aspirin. Repeat. Repeat.