“The poor you will always have with you” — or so says the protagonist of Matthew’s Gospel. And while that statement remains true so far as it goes, it is also incomplete in light of the past 30 years.
Yes, the poor we will always have with us, but not nearly so many, and not nearly so lacking in hope.
Amid all the anger in American politics and claims of stagnating lifestyles and cramped expectations (which the economic data refute for most of us), we often overlook the fact that the past few decades have been the most successful era in history for the world’s poor.
Never have so many risen so quickly from the pit of abject subsistence.
Indeed, according to any expert source you consult — from the World Bank to the United Nations — extreme poverty has shrunk by more than half since 1988. At least 1 billion people throughout China, India, Southeast Asia and elsewhere — not to mention our much-abused neighbor, Mexico — finally got a toe-hold on real economic progress.
Thatap not to say most aren’t still quite poor by our standards. But the bottom third in global income enjoyed real income gains of between 40 percent and 70 percent, according to former World Bank economist Branko Milanovic. If thatap not something to celebrate, we’ve lost our sense of wonder for human progress.
Which brings us, as most things do these days, to President Donald Trump. If he truly believes the astonishing fiction that the global system of trade and investment is a zero-sum game that has been punishing America “for many decades,” as he asserted in his inaugural address, then billions of poor people whose fate depends on the industrialized world’s commitment to trade could be in for a rough ride.
Ironically, a Trump adviser reportedly told a gathering of the global elite at Davos, Switzerland, last month that the president is “one of the last great hopes for globalism” — implying that he will tweak trade arrangements to make them more palatable to protectionists but without throttling global growth. We can only hope so. Unfortunately, the saber-rattling on trade from the White House hints at more radical goals.
Trade is not solely responsible for the growing wealth of so many nations. Equally crucial has been the movement, however imperfect, toward market institutions and open economies that embrace competition, investment and innovation. Mexico is a prime example of this evolution. If Trump ignites Mexico’s anti-capitalist left, as polls there suggest he is doing, he could torpedo this progress.
Most Americans seem utterly unaware of the massive reduction in misery around the globe. Indeed, one poll last year by the Barna Group actually found more than two-thirds of Americans thought global poverty was on the rise. Perhaps thatap because they are inundated with misleading reports suggesting that growing inequality in the West is undermining the fight against poverty everywhere.
A glaring example of this theme occurred last month when the anti-poverty group Oxfam released a report saying that just eight multibillionaires, six American, owned as much wealth as 3.6 billion of the world’s poorest people. Almost every news outlet, including The Denver Post, gave major space to the comparison. Yet whether it is genuinely shocking is a matter of opinion; if you pool the assets of those who own little or nothing, the final sum will not be large. But Oxfam claimed its finding was the latest evidence of a “rigged economic and political system that sucks income and wealth upward” while leaving “most of the world’s population trapped in poverty.”
Oxfam’s solution? Start with “cracking down on the abuse of tax havens.” Sure, letap crack down on tax havens. But letap also stipulate that whether Warren Buffett, Bill Gates and Jeff Bezos pay their fair share of taxes has next to nothing to do with the fate of those 3.6 billion with few assets. Their hope lies primarily in policies of economic liberalization at home and an international system of open trade.
For most of human history, almost everyone was painfully poor. But late 18th and 19th century reforms empowering the individual rewrote the script. “The boldness of commoners pursuing their own interests resulted in a Great Enrichment,” writes the economist Deirdre Nansen McCloskey, resulting in “a rise in Europe and the Anglosphere of real, inflation-adjusted incomes per head, from 1800 to the present, by a factor, conservatively measured, of about 30. That is, class, about 3,000 percent.”
Such growth, McCloskey notes in her compelling book “Bourgeois Dignity: Why Economics Can’t Explain the Modern World,” is “astounding, unprecedented, unexpected, the greatest surprise in economic history. For the first time the economy performed for the People instead of mainly for the Privileged.”
In the past 30 years, the Great Enrichment has been spreading to the rest of the world. And the resulting massive retreat in poverty is critical to understanding the stakes in today’s debates about global trade.
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