31 January 2019

Bill Gates is right. The world really is getting better

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Things aren’t nearly as bad as you think. In fact, slowly and away from the headlines, they have been getting better – quite a lot better, in fact, and not always that slowly.

One of the things we try to do at CapX is explain why that is. There are plenty of others out there doing a great job of making a similar point.

Take a look at the world poverty clock, which shows in real time the fall in the number of people living in extreme poverty. Or consider two recent bestsellers – Enlightenment Now by the American Psychology Professor Steven Pinker and Factfulness by the late Hans Rosling – both of which have gone some way to bridging the gap between people’s hardwired pessimism and the much happier truth about the state of the world. Under Marian Tupy, a CapX regular, the team at Humanprogress.org works as a kind of societal fitbit, keeping count of the steps humanity takes in the right direction. Over at Our World in Data, Max Roser and his colleagues produce richly detailed graphics that help bring that progress to life. This is the tip of the iceberg, and the result of all these endeavours, and many, many more, is a body of evidence that is as overwhelmingly persuasive as it is reassuring.

Some, however, remain unconvinced. Writing in the Guardian this week, Jason Hickel, an anthropologist at the University of London, argues that this good news story, in particular the dramatic fall in extreme poverty is a “powerful narrative”, but “completely wrong”. Hickel singles out a tweet by Bill Gates in which he describes a series of widely-shared charts produced by Our World In Data as one of his favourite infographics.

This is one of my favorite infographics. A lot of people underestimate just how much life has improved over the last two centuries: https://t.co/djavT7MaW9 pic.twitter.com/kuII7j4AuW

— Bill Gates (@BillGates) January 19, 2019

His most concrete complaint is with the claim in Roser’s chart that the proportion of people living in poverty has declined from 94 per cent in 1820 to just 10 per cent today. That is based on a poverty line of $1.90 per day. “Earning $2 per day doesn’t mean that you’re somehow suddenly free of extreme poverty. Not by a long shot,” he writes.

Hickel is, of course, correct to say that this extreme poverty line is somewhat arbitrary. The very poor becoming slightly less poor isn’t everything. But it’s not nothing. Inevitably, these definitions force shades of grey into black and white. Does anyone claim otherwise? According to Hickel, another measure of poverty paints a very different picture:

“So what happens if we measure global poverty at the low end of this more realistic spectrum — $7.40 per day, to be extra conservative? Well, we see that the number of people living under this line has increased dramatically since measurements began in 1981, reaching some 4.2 billion people today. Suddenly the happy Davos narrative melts away.”

Notice the clumsy sleight of hand. Hickel has swapped proportions of the world’s population for absolute numbers. Given the increase in world population over the period we are talking about – and where that growth is concentrated – using absolute numbers makes very little sense. (Incidentally, the increase in global population makes the huge absolute fall in people living under $1.90 a day even more remarkable.)

What happens if we use a different definition of poverty, but stick to the more sensible, and more widely used, proportionate approach?

If you draw the line where Hickel does, at $7.40 per day, the picture is not transformed in quite the way he would have you to believe. According to World Bank data in 1981, 71 per cent of the world’s population lived below the line. In 2015, that had fallen to 56 per cent. Set the bar higher still, at $10 a day and the trend over the same time period is yet again in the right direction, with the percentage of the world’s population on the wrong side of the line falling from 75 per cent to 65 per cent.

More or less wherever you draw the line, the results say the same thing: the proportion of the world’s population living in poverty is going down, not up. Hardly a “ringing indictment of our global economic system” as Hickel claims.

In fact, it is striking just how win-win recent economic history has been. According to the World Data Lab, as of last year, more than half the world is middle class. I can see why this is so puzzling for those who think that more wealth in one place must mean less wealth elsewhere. Thankfully, that isn’t how it works. The global economy is not zero sum.

Unfortunately, the problems with Hickel’s argument do not end with statistical chicanery. The other is much more profound – and more revealing. He writes:

“What Roser’s numbers actually reveal is that the world went from a situation where most of humanity had no need of money at all to one where today most of humanity struggles to survive on extremely small amounts of money. The graph casts this as a decline in poverty, but in reality what was going on was a process of dispossession that bulldozed people into the capitalist labour system… Prior to colonisation, most people lived in subsistence economics where they enjoyed access to abundant commons – land, water, forests, livestock and robust systems of sharing and reciprocity. They had little if any money, but they didn’t need it in order to live well – so it makes little sense to claim that they were poor.”

To the extent that this account of what Hickel calls “coerced proletarianisation” means anything at all, it means he thinks that, for the vast majority of the world’s population, life was better hundreds of years ago than it is today.

For that to be true, medieval subsistence farming must have been seriously rewarding work. It would have to outweigh all the progress we have made in the last few centuries: the plummeting rate of child mortality, the surge in literacy rates, the spread of democracy, the increase in life expectancy and the countless other improvements that have taken place over the last few hundred years ago.

Of course, we know that people did not “live well”, regardless of how much money they had. We know that for the vast majority of human history life really was nasty, brutish and short — if you were lucky enough to survive childbirth. We know too that it was lived at the edge of starvation. And that, to modern eyes, it looks stultifyingly boring and occasionally terrifying.

As Pinker puts it, “the story of the growth of prosperity in human history is close to: nothing… nothing… nothing… (repeat for a few thousand years)… and boom! A millennium after the year 1 CE, the world was barely richer than it was at the time of Jesus… The Gross World Product today has grown almost a hundredfold since the Industrial Revolution”.

This is not the story of the creation of money, with humanity promptly confined to a wage-slave existence. Rather it is an explosion in our ability to do more with the resources available to us. It is a story of innovation driving yet more innovation and making real things that used only to exist in our imaginations. The result has been longer, safer, happier, more rewarding and more prosperous lives.

Of course, measuring how far we have come should not mean complacency about the work that is still to be done. But those who refuse to learn the economic lessons of the past should not be trusted with our economic future.

It is one thing to debate the causes of recent economic and social progress. Or to argue that we aren’t doing enough to accelerate the rate at which poverty is falling. It is quite another to deny that mankind has made any steps in the right direction and even appear to want to turn the clock back to a time when life for almost everyone was almost unimaginably hard.

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Oliver Wiseman is Editor of CapX.