A response to Noah Smith about global poverty


During the debate about the global poverty numbers that unfolded earlier this year, the Bloomberg opinion columnist Noah Smith wrote a piece discussing some of my claims.  In the months since a number of people have asked me to respond.  While some of Smith’s points are worth engaging, the piece makes a number of misleading assertions that I think unfortunately degrade the quality of the debate, and usefully illustrate the sort of sleight of hand to which many defenders of the grand poverty-progress narrative have resorted.

This tendency is clear beginning with the title: "The world really is getting richer, as poor countries catch up".  The title is incorrect on two fronts. 

First, it implies that I deny the world is getting richer, as measured in GDP. I do not. And that’s not what this debate is about. Everyone agrees that aggregate global GDP is growing, which is after all an intrinsic function of capitalism (although we should be clear that GDP is not a good measure of “riches”, given what it ignores; for instance, natural wealth has been declining steadily for many decades, and the Genuine Progress Indicator has stagnated since the 1970s).  The problem, rather, is that the vast majority of new income is being captured by the rich, and particularly by the global North.  Only a very small share of it (about 5%) goes to the poorest 60% of humanity, despite the fact that they provide the majority of the labour and resources that go into the global economy.  As a consequence, the incomes of the poor have not grown enough to lift them out of poverty – not by a long shot.  That’s my contention, and that’s the issue we need to confront.

Second, to state that poor countries are “catching up” is incorrect.  Smith provides no evidence for this assertion.  In fact, World Bank data shows the opposite: the per capita income gap between the global South and the global North has nearly quadrupled in size since 1960 (see graph below). One might argue that the income of the South is growing at a faster rate than the income of the North, but that’s not the same as “catching up” by any commonly accepted definition. 


Below the title, the leader states "Arguments that extreme poverty is on the rise do not match the data”.  The implication is that I have said that extreme poverty (which is measured at $1.90 per day) is on the rise.  I have not.  Nor has anyone, to my knowledge, ever. I did make a number of other arguments, however, including (a) that the $1.90 line is arbitrary, and has no grounding in any empirical conception of poverty or human needs; (b) that $1.90 is inadequate to achieve basic health and nutrition; (c) that the evidence-based poverty line is at least $7.40; (d) that at this level the number of people living in poverty has increased by nearly 1 billion since 1980; and (e) that, excepting China, the proportion of people living in poverty grew during the imposition of neoliberalism in the 1980s and 1990s, from 62% to 68%.  

Instead of engaging with my actual arguments, Smith mischaracterizes them and opts to do battle with straw men. As I see it, this is intellectually dishonest, and does not advance the conversation. Unfortunately it’s not the first time he has done this with respect to my work.

Smith goes on to say that I embrace “a narrative of increasing immiseration”.  If by immiseration we mean that people are getting poorer (which is the only definition of immiseration I am aware of), he is incorrect.  I have not said that. On the contrary, I have pointed out that the incomes of the poor have increased since 1981 – just not enough to lift them out of poverty.  Again, that’s the problem to which I have sought to draw attention.

To be more specific, though, we should say that the incomes of poor people have increased in aggregate.  World Bank data shows that there were in fact long periods of actual immiseration in most global South regions during the imposition of neoliberalism in the 1980s and 1990s, when the incomes of poor people (those living under $7.40 per day) declined. It is important that we do not paper over this brutal reality, as the dominant poverty narrative does.

Smith says we need to recognize increases in income that happen below $7.40. Such increases improve the lives of the poor, he points out, and we shouldn’t let that get obscured. I absolutely agree. Once again, I have not argued that we shouldn’t pay attention to low-level increases in income. I’ve simply said that (a) those increases have not been enough to get people out of poverty; (b) they are dramatically lower than what people living in poverty are owed, given the labour and resources they contribute to the global economy; and (c) they are egregiously small compared to the wildly disproportionate share of global growth that has been appropriated by the rich. We need to face up to these facts.

Sure, we can redefine “poverty reduction” to mean neither a reduction in the numbers of poor nor a reduction in the proportion of people in poverty, but rather a reduction of the poverty gap (how deep people are below the poverty line). By this metric, there has been some improvement. But let’s not kid ourselves: the pace of change has been extremely slow, with poor people’s daily incomes increasing by only about 2 cents per year, according to World Bank data. It’s hardly worth touting as “progress” these pennies that have trickled down to the poorest when the overwhelming majority of new income since 1980 has been captured by the very rich - enough to end global poverty many times over. This is not progress - it is an offense.

With respect to my critique of the long-term poverty data, Smith says: "This may or may not be true; as Roser and Hasell note, economic historians do try to account for these non-market sources of production."  In fact there are no legitimate grounds for equivocation here. The data that underpins Roser’s long-term graph does not count people’s access to goods derived from the commons, from household production, from gift exchange, or any of the other things that poverty surveys cover - nor does it attempt to do so.  The data may tell us a little bit about non-monetary GDP, but it tells us nothing about poverty.  Here again, Smith has not engaged with my actual argument.

Smith’s final point is perhaps the strangest of all. He says: "If Hickel is right, colonialism impoverished the world even more than the graph would suggest.  But if that’s true, the drop in (extreme) poverty since 1981 is even more impressive, because it represents such a dramatic reversal of past trends… The triumph of decolonization is a story that even Hickel should be able to feel happy about." 

There are two things worth saying here.  First, the graph does not suggest that colonialism impoverished the world – indeed, it suggests the opposite, which is precisely what’s wrong with it.  Second, Smith seems to believe that the global South went straight from colonialism to neoliberalism in 1981. It did not. He ignores three decades, from 1950 (the end of colonialism) to 1980, during which global South countries used progressive economic reforms to improve wages, improve access to social goods and housing, improve access to land for peasant farmers, and improve the share of national income going to workers and the poor.  These gains were reversed by structural adjustment (1980-2000), during which poverty consequently rose in both proportional and absolute terms. This happened virtually everywhere except China and East Asia, which did not conform to Smiths’ preferred brand of Washington Consensus neoliberalism but rather embraced state-led development strategies.    

Of course I feel happy about decolonization and the gains that have been achieved since then.  But let’s not forget to give credit where credit is due: to the progressive post-colonial political movements of the 1950s-1970s.  Unfortunately, the economic sovereignty that was won during those decades (through the Non-Aligned Movement, and the New International Economic Order) was effectively destroyed during the structural adjustment period.  We need to be honest about this history. Periodization matters.

The debate about global poverty is important. But our collective understanding of this matter will only be served by intellectually honest and sincere engagement with the arguments at hand.


Inequality metrics and the question of power


How should we measure inequality?  There are two metrics that economists use: relative and absolute. In the past I have argued that the relative metric – which is by far the dominant approach, embodied in the standard Gini index, in the famous “elephant graph”, and in logarithmic distribution graphs – is problematic in that it is aligned with the interests and perspectives of the rich, and effectively obscures real inequalities in the distribution of new income around the world.  From the perspective of justice, and indeed from the perspective of the poor themselves, what really matters is the absolute gap between rich and poor, not relative rates of change.

But there is another question that we need to consider here, about the relationship between income and power.  One of the main reasons we are concerned about inequality in the first place is that it allows rich people to exercise power over the lives of the poor. In political terms, they can use it to lobby policymakers, fund political campaigns, buy media outlets, set up think tanks, or even outright bribe government officials. In economic terms, they can use it to, say, push wages down (by lobbying to restrict labour unions, for example), and push house prices up (because the excess income of rich people ends up flowing to assets).

So which metric gives us more traction in thinking about the power dimension of inequality?  Relative or absolute?

Here’s a a case to consider. Imagine a poor person whose income is $5,000 and a rich person whose income is $100,000.  Now imagine that the poor person’s income goes up by 100%, to $10,000, and the rich person’s goes up by “only” 50%, to $150,000.   

The income of the poor person has grown at a faster rate (relative to their baseline) than the income of the rich person.  As a result, while the rich person was initially 20x richer than the poor person, now they are only 15x richer.  According to the relative metric, inequality has decreased. 

According to the absolute metric, by contrast, inequality has exploded.  The absolute gap between the rich person and poor person grew from $95,000 to $140,000.  Put another way, of the total new income of $55,000, 91% of it went to the rich person.  Only 9% went to the poor.

What about from the perspective of power differentials? Has inequality decreased or increased?

On the face of it, we might reason that a person who is 20x richer would have more power than a person who is only 15x richer, just as if they were 20x bigger or stronger versus only 15x.  From this perspective, the reduction from 20x to 15x is an improvement, and the relative metric would be correct to suggest that inequality has decreased.

But someone might retort that this not how the income-power relationship works. Money buys power, so the more money you have the more power you can buy. One might even say that there is a one-to-one relationship between money and power: one more dollar gives you one more unit of power.  From this perspective, the absolute metric would be correct to suggest that inequality has increased.

Neither of these approaches is adequate, however. Here’s why. When the poor person goes from $5,000 to $10,000, they are going to spend that new money on basic needs: rent, food, education, healthcare, etc.  They will not have money left over to lobby policymakers or set up think tanks.  For the rich person, by contrast, we can assume that virtually all of their new income is in excess to their needs, and therefore available to be spent on power. 

So every additional dollar that goes to the rich adds to their (potential) political power, whereas the same additional dollar that goes to the poor does not – at least not if they are below a given need threshold. 

This brings us to an interesting point.  Economists justify their use of the relative inequality metric on the basis of “diminishing marginal utility”.  Every additional dollar that goes to a rich person has less weight than an additional dollar that goes to a poor person, they say, because it means less to a rich person than it does to a poor person.  And the richer the rich are, the less the new money means to them.  This is why economists like to plot inequality on a logarithmic curve. 

I have rejected this logic elsewhere, on its own terms.  But from the perspective of power differentials it is even more wrongheaded.  Indeed, the opposite is true.  Every additional dollar that goes to the rich adds more to their power, and the richer they are, the more power it adds. Why? Because the more distant the new money is from any given need threshold, the more it is available to be spent on powerThe relationship between income and power is, in effect, an inverse logarithmic relationship.  Plus, we need to account for the fact that the more money the rich spend on power, the more they inflate its price, pushing power ever-further out of the reach of the poor. 

In sum, the relative metric (i.e., the standard Gini index, the elephant graph, and logarithmic distribution graphs) is inappropriate not only from the perspective of poverty and justice, but also from the perspective of power. In fact, it gets the income-power relationship exactly backward. If we are to take the power dimension of inequality seriously, then we have to accept that the elephant graph beloved of the World Bank, and the log-humps graph beloved of Hans Rosling, are wildly misleading.

The absolute metric serves us better, but as it too falls short of capturing the real dynamics of the income-power relationship, we should recognize that inequality is likely to be worse than even the absolute metric implies. We can use the absolute metric as a rough proxy, but it is at best conservative.


How not to measure inequality


There are two primary methods for measuring inequality - relative and absolute. In the discipline of economics, the former has become dominant by far. It is embodied in the standard Gini index, in the famous “elephant graph”, and in logarithmic distribution graphs (follow the links to see my critiques of each of these).

According to the relative metric, if the income of the poor increases at a faster rate than the income of the rich, this is recruited as a decline in inequality even if the absolute income gap between the two continues to widen.

Take for example a poor country whose average income goes from $500 to $1,000 (a 100% increase), and a rich country whose income goes from $50,000 to $75,000 (a 50% increase). The poor country’s income has grown twice as fast as the rich country’s, relative to its starting point.  According to the relative metric, this is a decline in inequality (and is represented as such in the Gini index, the elephant graph, and the log scale). But the gap between them has nonetheless exploded, from $45,500 to $74,000.  According to the absolute metric, inequality has worsened.

The dominance of the relative metric is interesting, because it has been wielded by powerful figures (Bill Gates, World Bank economists, etc) to insist that the world is becoming fairer even as the income gap between rich and poor, North and South continues to widen. The following graph shows the income gap between North and South, according to World Bank data:

Global Inequality (North vs South).png

There are a number of defenses that people offer for the relative metric. The most common by far is to say that income growth offers "diminishing marginal utility". A dollar gained by the poor is worth more than a dollar gained by the rich, in terms of improving quality of life, so we should give more weight to new income gained by the poor than the rich.

I agree that the theory of diminishing marginal utility is important here, but I think it leads to the exact opposite conclusion.

If we accept the theory of diminishing marginal utility, what this means is that every dollar that goes to the already-rich instead of to the poor is egregious; it is more or less meaningless in their hands, whereas for the poor it would be life-changing. And the richer the rich are, the more egregious this is. In other words, the egregiousness of pro-rich distribution increases as utility diminishes; it is an inverse relation. Moreover, this egregiousness is particularly acute when the poor have some rightful claim to the income that is otherwise going to the rich, which they do in the context of a global economy that depends so fundamentally on the exploitation of their labour and resources.

Ultimately, there is a difference in perspectives at stake here. Additional dollars going to the rich are, from the perspective of the rich, diminishing in terms of marginal utility. But from the perspective of the poor they represent increasing egregiousness. To rely solely on the theory of diminishing marginal utility in discussing inequality, then, is to adopt the perspective of the rich and dress it up as neutral and objective. That this move is commonplace in economics is not surprising, as it is consistent with the class location (or bourgeois sympathies?) of most professional economists.

When we look at inequality from the perspective of the poor - using the theory of increasing egregiousness - it becomes clear that the relative metric is inappropriate as a tool for assessing distribution. Certainly if our objective is to end poverty, this is the conclusion we must draw, as an additional dollar going needlessly to the rich could have been used to reduce poverty, and yet was not. The absolute metric allows us to see this effect, by giving equal weight to each dollar. From the perspective of the poor, an additional dollar going to the rich is a dollar that could have gone to them - and indeed by rights should have gone to them - thus improving their lives by a corresponding amount, and yet was needlessly frittered away instead on a latte.

In sum, not only is the "diminishing marginal utility" argument not a good defense of the relative metric, it in fact underscores the point that inequality is worse than the relative metric leads us to believe.

When seen from this perspective, the politics of the relative metric become problematic, to say the least. For a rich person to insist on the relative metric is equivalent to saying: “I earn a lot more money than poor people do, but that’s okay because most of it is in excess to my actual needs and therefore matters less to me”. This is clearly absurd. Certainly it is impossible to imagine a poor person saying: “The rich may earn more than me, and indeed are taking income that rightly belongs to me, but that’s okay because it is in excess to their needs and means less to them.”

In this sense, the relative metric begins to border on a kind of propaganda or ideology, a justification for inequality, and its dominance in economics can be seen as a kind of cultural hegemony in the Gramscian sense.

When I have made this argument in the past, some have hit back by saying: both measures are important! Fine, then let us ask that each time economists use relative metrics to pronounce that inequality is declining, they also include absolute metrics - so that people can make up their own minds.

This is important, because the absolute metric is the common-sense way of thinking about inequality. I recently conducted a small poll, with close to 200 respondents. I asked two questions: “What do you think economists mean when they say that inequality is decreasing?” and “What do you think economists mean whey they say that inequality is increasing?” Respondents were allowed to write in their own words, so as not to be led by multiple choice. Some 95% of them indicated that they think of absolute income gaps, not relative change.

If these results are anywhere close to accurate, this means that when economists use the relative metric to make pronouncements on what’s happening with inequality, they are effectively misleading the public.

Now, a second common defense of the relative metric is to say that if the incomes of the poor are increasing at a faster rate than the incomes of the rich, relative to their starting point (i.e., a 5% growth rate versus a 3% growth rate), if this trend continues then the absolute income gap may increase for some time, but eventually it will begin to close and the poor will catch up with the rich as the exponent wields its power.

The problem with this argument is it assumes (a) that rich countries/people will allow the trajectory of relative convergence to continue to the point of absolute convergence and catch-up, thereby relinquishing their class power; and (b) that we have all the time in the world to wait.

The first assumption is politically naive. Given how class power works, it is not realistic to assume that relative convergence will automatically become absolute convergence, without any structural change in the economy. And if we cannot assume an automatic transmutation between the two, then what matters when it comes to measuring inequality is not what might happen in some distant future but what is happening right now - are absolute incomes converging or diverging? That is the relevant question.

The second assumption is ecologically naive. Given our existing ecological crisis, it is not realistic to assume that we can just wait for relative convergence to become absolute convergence. The timescale on this is many decades and in some cases centuries, by which time climate change and ecological instability will begin having a real negative impact on the incomes of, disproportionately (if things carry on as they are), the poor. Here again, if we cannot assume an automatic transmutation in the future from relative convergence to absolute convergence, then what matters in terms of income inequality is what is happening to the gap right now.

And what is happening is divergence. Big time.


At this rate, it will take 200 years to end global poverty


During the debate about global poverty that erupted earlier this year, one fact kept getting repeated: maybe poor people’s incomes haven’t increased enough to lift them out of actual poverty (grudgingly admitted), but at least they’ve been rising.  For those who seek to defend neoliberal globalization, this fact has become a precious touchstone. 

While it is true that the average incomes of poor people have increased since 1981, there are two crucial caveats to this that we need to pay attention to. 

1) First, the increase has not been steady.  Indeed, there have been long periods over the past few decades where the average incomes of the global poor (those living on less than $7.40 per day, the minimum necessary for decent nutrition and normal life expectancy) didn’t rise at all, and quite often actually fell.  Here are a few examples:

  • In Latin America and the Caribbean, the average income of the poor fell after 1981 and didn’t recover its previous level until two decades later.

  • In the Middle East and North Africa, the average income of the poor fell after 1990 and didn’t recover its previous level until a decade later.

  • In South Asia, the average income of the poor fell after 1996 and didn’t recover until 2008.

  • And in Sub-Saharan Africa the average income of the poor declined after 1981 and didn’t recover until more than two decades later, in 2005.

Crucially, these periods of decline and stagnation happened almost entirely during the 1980s and 1990s, as neoliberal structural adjustment programs were imposed across the global South.  In other words, the imposition of Washington Consensus capitalism during this period not only caused the number and percentage of poor people to rise (as I have described elsewhere), it also caused the incomes of the poor to decline and stagnate. 

2) Second, the increase that has happened has been at an astonishingly slow pace.  Since 1981 poor people’s daily incomes have increased by only about 2 cents per year, on average. 

At this rate it will take around 200 years to end global poverty at $7.40 per day, and 500 years to end poverty at the US poverty line of $15 per day.


The graph above is based on World Bank poverty data. I’ve calculated the total poverty gap per region per year (i.e., the amount of additional income it would take to bring everyone above the poverty line of $7.40 per day), divided this by the number of poor people in each year to get the average distance that poor people live below the poverty line, and then subtracted this from $7.40 to show average income.* 

Keep in mind that this figure counts not only income but also consumption.  So if a person is living on $2 per day, that includes not only the cash they might earn from wages, but also the value of food they grow themselves, and anything they might scavenge or receive as gifts for household consumption.  And all of this is valued in terms of purchasing power in the United States.  So $2 is what that amount of money would buy in the US in 2011; barely anything, basically.  Not even enough to cover basic food needs.

What is more, these results overstate the incomes of the poor because the World Bank’s PPP methodology doesn’t account for the fact that poor people spend a disproportionate amount of their income on food.   

Here’s what the World Bank data reveals:

Screen Shot 2019-04-27 at 11.35.32 AM.png

And remember: these are the people who render the majority of the resources and labour that keep the global economy going. What they get in return for that is literally pennies.

Those like Gates and Pinker who so adamantly defend the status quo of the global economy – this is what they are defending.  That the incomes of the poor should grow by 2 cents per year, ensuring that poverty will be with us for hundreds of years to come.

This is a striking position to take, when you consider that poverty could be ended right now, forever, simply by shifting $6 trillion of existing global income to the poorest 60% of humanity. This would be enough to lift every human on the planet above the $7.40 line.

For perspective, the richest 1% capture more than $18 trillion each year in income, according to the World Inequality Database.  In other words, we could tax the 1% a mere third of their income to put an end global poverty, and still leave them with an average income of $175,000 per year. 

This is just a thought experiment, of course; to me a better approach is to change the rules of the global economy so that the world’s majority can claim a fairer share of the yields they produce in the first place, as I argue in The Divide.  But the point is clear: global poverty today isn’t natural or inevitable, it is an artifact of the very same policies that have been designed to siphon the lion’s share of global income into the pockets of the rich.  

*Note: Using the aggregate poverty gap to calculate incomes over time only yields meaningful figures if the poverty rate remains constant. For instance, if some people escape poverty then their increased incomes no longer count toward the average income of the poor (and vice versa). In the case discussed here, the number of poor has increased over the period in question, while the proportion has stayed roughly the same; so we can conclude that this method provides a reasonable estimate of average incomes.


Global inequality: Do we really live in a one-hump world?


There is a powerful infographic that has been circulating on social media for a couple of years now. It illustrates a dramatic transformation from a “two hump world” in 1975 to a “one hump world” today. It was created by Hans Rosling and Gapminder, and has been reproduced and circulated by Max Roser and Our World in Data. Take a look:

Red is Asia/Pacific; Blue is Africa; Green is North/South America; Yellow is Europe. Incomes are PPP.

Red is Asia/Pacific; Blue is Africa; Green is North/South America; Yellow is Europe. Incomes are PPP.


It is an astonishing image. In his post on inequality, Roser uses this graph to conclude: “The poorer countries have caught up, and world income inequality has declined.” Hans Rosling went further: “There is no gap between the West and the Rest, between developed and developing, between rich and poor,” he wrote in Factfulness; “This is not controversial. These facts are not up for discussion.” Bill Gates, who funds both Our World In Data and Gapminder, has used the graph to echo this narrative, stating “the world is no longer separated between the West and the Rest.” Steven Pinker leveraged it for the same purpose in his book Enlightenment Now, hailing a “Great Convergence”. And Duncan Green recently wrote that income inequality is no longer about a divide between nations or regions of the world, but rather between social groups within the global population as a whole.

Indeed, the graph gives the impression that all of the world’s people are basically in the same income bubble: whether you’re in Europe, Asia or the Americas, we’re all in the same hump, with a smooth, normal distribution. Clearly globalization has abolished that old colonial divide between North and South, and has worked nicely in favour of the majority of the world’s population. Right?

Well, not quite. In fact, this impression is exactly the opposite of what is actually happening in the world.

There are a few things about this graph that we need to keep in mind:

First of all, the x axis is laid out on a logarithmic scale. This has the effect of cramming the incomes of the rich into the same visual space as the incomes of the poor. If laid out on a linear scale, we would see that in reality the bulk of the world’s population is pressed way over to the left, while a long tail of rich people whips out to the right, with people in the global North capturing virtually all of the income above $30 per day. It’s a very different picture indeed.

Second, the income figures are adjusted for PPP. Comparing the incomes of rich people and poor people in PPP terms is problematic because PPP is known to overstate the purchasing power of the poor vis-a-vis the rich (basically because the poor consume a range of goods that are under-represented in PPP calculations, as economists like Ha-Joon Chang and Sanjay Reddy have pointed out). This approach may work for measuring something like poverty, or access to consumption, but it doesn’t make sense to use it for assessing the distribution of income generated by the global economy each year. For this, we need to use constant dollars.

Third, the countries in the graph are grouped by world region: Europe, Asia and the Pacific, North and South America, Africa. The problem with this grouping is that it tells us nothing about “North and South”. Global North countries like Australia, New Zealand and Japan are included in Asia and Pacific, while the Americas include the US and Canada right alongside Haiti and Belize. If we want to know whether the North-South divide still exists, we need a grouping that will actually serve that end.

So what happens if we look at the data differently? Divide the world’s countries between global South and global North, use constant dollars instead of PPP, and set it out on a linear axis rather than a logarithmic one. Here’s what it looks like. The circle sizes represent population, and the x axis is average income (graphics developed by Huzaifa Zoomkawala; click through for more detail):

Global North: US, European Union, Canada, Australia, New Zealand, Russia, Switzerland, Iceland, Israel, Greenland, Norway, Japan

Global North: US, European Union, Canada, Australia, New Zealand, Russia, Switzerland, Iceland, Israel, Greenland, Norway, Japan


Suddenly the story changes completely. We see that while per capita income has indeed increased in the global South, the global North has captured the vast majority of new income generated by global growth since 1960. As a result, the income gap between the average person in the North and the average person in the South has nearly quadrupled in size, going from $9,000 in 1960 to $35,000 today.

In other words, there has been no “catch up”, no “convergence”. On the contrary, what’s happening is divergence, big time.

This is not to say that Rosling and Roser’s hump graphs are wrong. They tell us important things about how world demographics have changed. But they certainly cannot be used to conclude that poor countries have “caught up”, or that the North-South divide no longer exists, or that income inequality between nations doesn’t matter anymore. Indeed, quite the opposite is true.

Why is this happening? Because, as I explain in The Divide, the global economy has been organized to facilitate the North’s access to cheap labour, raw materials, and captive markets in the South - today just as during the colonial period. Sure, some important things have obviously changed. But the countries of the North still control a vastly disproportionate share of voting power in the World Bank and the IMF, the institutions that control the rules of the global economy. They control a disproportionate share of bargaining power in the World Trade Organization. They wield leverage over the economic policy of poorer countries through debt. They control the majority of the world’s secrecy jurisdictions, which enable multinational companies to extract untaxed profits out of the South. They retain the ability to topple foreign governments whose economic policies they don’t like, and occupy countries they consider to be strategic in terms of resources and geography.

These geopolitical power imbalances sustain and reproduce a global class divide that has worsened since the end of colonialism. This injustice is conveniently elided by the one-hump graph, which offers a misleadingly rosy narrative about what has happened over the past half century.


How bad is global inequality, really?


Most everyone who’s interested in global inequality has come across the famous elephant graph, originally developed by Branko Milanovic and Christoph Lakner using World Bank data. The graph charts the change in income that the world’s population have experienced over time, from the very poorest to the richest 1%.

We can update the elephant graph using the latest data from the World Inequality Database (WID), which covers the whole period from 1980 to 2016 using a method called “distributive national accounts”. Here’s what it looks like in real dollars (MER), developed in collaboration with Huzaifa Zoomkawala (click through for a series of interactive charts that Huzaifa has created):

The elephant graph has been used by some to argue that neoliberal globalization has caused inequality to decline since 1980. After all, it would appear that the biggest gains have gone to the poorest 60% of the world’s population, whose incomes have grown two or three times more than those of the richest 40%.

But this impression can be misleading. It’s important to recognize that the elephant graph shows relative gains, with respect to each group’s baseline in 1980. So the poorest 10-20th percentile gained 82% over this period. That sounds like a lot, on the face of it. But remember that they started from a very low base. For people earning $2.40 per day in 1980, their incomes grew to no more than $4.36 per day… over a period of 36 years. So, about 5 cents per year.

That’s not much to celebrate, particularly when these gains don’t come anywhere close to lifting people out of poverty. Remember, the poorest 60% - the ones depicted as the “winners” in the elephant graph - continue to live under the poverty line of $7.40 per day (2011 PPP).

Meanwhile, the global rich may have seen their incomes increase by a smaller proportion, but because they started from a much higher base their absolute gains have been far greater.

What we need, then, is to render the elephant graph in absolute terms, to see who’s benefited most from the distribution of new income around the world. Here’s what it looks like:

Suddenly the story changes. It becomes clear that it’s the richest 1% who have gained the most - by far. The incomes of the world’s poor have barely budged by comparison.

It’s not an elephant graph anymore. It’s a boomerang. This seems a fitting image, given how income has an uncanny way of circling back to those who already have it. Or we could call it a scythe, which nicely captures how the rich are harvesting the world’s abundance for themselves.

Things get even more extreme once we start separating out top incomes, which is what the World Inequality Database allows us to do. Click here to see how the “elephant” shape disintegrates and the scythe becomes even sharper. Here’s a table showing how each group has fared from 1980 to 2016:

Screen Shot 2019-03-02 at 9.48.15 PM.png

The results are staggering, really. For the poorest 60% of humanity, the average person saw their annual income increase by only about $1,200… over 36 years.

Meanwhile, those in the 70-80th percentile, the “losers” according to the elephant graph, are revealed to have gained more than twice that amount. Those in the 80-90th percentile (also represented as losers in the elephant graph) gained four times more. And the richest 1% got one hundred times more.

As for the top incomes… well, they have grown by what can only be described as an obscene amount, with millionaires doubling or tripling their annual incomes, gaining some 14,000 times more than the average person in the poorest 60% of the world’s population.

All of this makes it clear who the real beneficiaries of globalization have been. And suddenly it seems a bit absurd to be touting as “progress” the pennies that have trickled down to the poorest when the overwhelming majority of new income since 1980 has been captured at the top.


A response to that Vox article about the global poverty debate


Last week Vox published an article on the global poverty debate.  The piece – by journalist Dylan Matthews – raises a few issues that I think are worth addressing.  I set out nine brief points here, responding to specific quotes from the article.

1. “As Roser is quick to note, it’s not ‘his’ chart — it’s similar to charts many economists working on poverty have produced, such as one in Georgetown professor Martin Ravallion’s book The Economics of Poverty.”

There is in fact a key difference between the two charts. It all comes down to context.  Ravallion’s is in an academic text that is intended primarily for circulation among academics.  The inadequate nature of the long-term poverty estimates is well known among academics, who take them with a big grain of salt.  Roser’s chart, on the other hand, is an infographic designed for mass consumption on social media.  The chart itself – as in the version Gates tweeted – makes no reference whatsoever to the problems with the data.  On the contrary, it creates a powerful illusion of certainty. A key piece of my argument has been to say that this is irresponsible public communication. That’s why I say the chart should be taken down.

2. “Roser, as he stressed repeatedly in messages to me, just wants to be clear on what the facts say.”

If Roser wants to be clear on what the facts say, then he should refrain from making claims (i.e., about long-term poverty trends) that are not backed up by actual facts.  The whole point of my argument is that the data he uses to draw conclusions about global poverty trends from 1820 is in fact not valid for that purpose. 

3. On higher poverty lines: “Roser himself agrees, writing in a Twitter DM, “I also very much agree that higher poverty lines are important to use.” 

Great! So if Roser agrees that higher poverty lines are important to use, then he should stop relying solely on the $1.90 line in his flagship graphs (i.e., the one Gates tweeted).  The weight of evidence is clear that $1.90 is not adequate.  If the World Bank itself states that it is too low to inform policy, then it’s also too low to inform public debate.

4. “It’s true that the proportion of people living on under $7.40 a day fell less rapidly than the proportion of people living on under $1.90 a day — but what that tells us, primarily, is that there was a large group of outrageously poor people subsisting on, say, 50 cents a day, who in recent decades have climbed up to earn, say, $2.50 per day.  That’s not good enough by any stretch of the imagination, and they deserve more help. But that’s nonetheless real progress that a higher poverty line deliberately excludes.”

A few things about this. 

First, a higher poverty line doesn’t “deliberately exclude” real progress.  That’s a silly accusation.  After all, the $7.40 line is not arbitrarily high.  It is what researchers say people need in order to achieve basic nutrition and normal human life expectancy.  The reason it is important is that it reveals that the small increases in income that Roser’s graph depicts as “progress against poverty” are in fact not adequate for lifting people out of actual poverty.  We need to face up to this fact.

Second, my point is not only that using the $7.40 line shows that the proportion “fell less rapidly”, as if we’re quibbling about a tiny difference here.  No, the argument is much stronger than that.  The $1.90 line creates the impression that virtually nobody remains in poverty today (a mere 10%, perhaps), when in reality the increase in income among the world’s poor has been so meager that only a small proportion of people (almost all of them living in China) have actually escaped poverty, while a full 58% of the human population remains poor.  As I stated earlier: that’s not progress – that’s a disgrace. 

The question we have to face is this: is it legitimate to say that the global economy is working when 58% of the human population is in poverty?  My answer is a firm no.  Matthews and Roser evade this question.

Third, to say that incomes have increased from 50c to $2.50 is optimistic.  In reality the average gain has been at most a doubling of income since 1980.  So people who were living on $1 per day in 1980 are now living on $2 per day - nearly forty years later. That’s what Roser’s graph depicts as “progress”. And once again, while incomes have increased by these tiny amounts, they have not increased enough to raise people out of poverty.  Not by a long shot.  This is why the Gates narrative is so misleading. 

Can we call these meager gains “real progress,” as Matthews would have it? Here is a graph showing how much people’s incomes increased during the period 1980 to 2016, by percentile.  Take a look and tell me… “real progress” for whom? It seems a bit absurd to be touting as “progress” the pennies that have trickled down to the poorest when the overwhelming majority of new income since 1980 has been captured at the top.


Finally, it’s not that the poor deserve more “help”.  What they deserve is a global economy that is fundamentally fairer – that’s the argument I lay out in The Divide.  The poorest 58% render underpaid labour and cheap resources for mass consumption and elite accumulation, mostly in the North.  It is offensive to suggest that what they need in return is charity.  What they need is justice.  Sadly, that’s something that the Gates narrative cannot abide. 

5. “On absolute numbers, I fear Hickel has a weaker case… Using absolute numbers risks confusing reducing poverty with preventing poor people from existing.”

This is a very strange argument, and an exact inversion of reality.  In fact it is those who object to the use of absolute numbers that trundle out this argument. They say we can’t use absolute numbers because the only reason the number of people in poverty has been rising is because the poor are living longer, and reproducing.  This argument only makes sense if you start from the assumption that poverty is a natural condition – as though being born into poverty is a kind of default.  My position is quite the opposite: that poverty is not natural at all, but rather an artifact of policy, and that in a world as rich as ours poverty needn’t and shouldn’t exist.  So any additional person in poverty is an injustice – a product of an economic system that has been designed to direct our planet’s abundance disproportionately to the already rich.

Matthews eventually gets around to acknowledging this point, but only after first distorting my position.  

Also, he has said nothing about my initial reason for insisting on absolute numbers, namely, that this is the metric that was first adopted by the world’s governments in the Rome Declaration in 1996.  The switch to proportions was made in 2000, apparently – according to research by Thomas Pogge I cited earlier – because it made the goal of “halving poverty” easier to achieve. 

Matthews says: “What most people in the development field want to ensure is that the people who do exist, however many of them there may be, are as well off as possible. Using percentages is a better approach for that.”  This is an assertion, not an argument.  No reason is given.  And indeed common sense suggests the opposite: that if the goal is to ensure that people who exist (all people exist, by the way) are as well off as possible, then surely we would want the incomes of the poor to increase to the point where they are not in poverty.  This goal is served, not hindered, by focusing on the absolute number of people below $7.40/day.

6. “Neither Maddison’s GDP numbers or Bourguignon and Morrisson’s poverty rate extrapolations are thus as reliable as the World Bank data… Ultimately, this part of the debate is about what to do with incomplete data.”

No. The point is not just that the data is incomplete, although that is significant.  The point (indeed the heart of my argument about the long-term numbers) is that GDP data cannot legitimately be used to assess poverty during a period of mass dispossession.  If Matthews and Roser think this is just a debate about what to do with “incomplete data”, they are missing the point. 

7. Here Roser makes a very strange argument: “For Africa we really don’t have many reconstructions,” he wrote in a message. “But you could also ask how much the uncertainty for Africa can possibly matter for our estimates of global poverty. The population of Africa was 8% of the world population. Even if all Africans at the time were billionaires this would mean that the global poverty rate would be at most 8% lower.”

If Roser admits that there is no data for Africa (and precious little for Asia and Latin America) prior to 1900, then why make a graph about “global” trends?  Why not just be honest and say the long-term graph is mostly about the rise of GDP in the global North and leave it at that?  Again, if you insist on “sticking to the facts”, then stick to the facts. 

8. Roser says: “What is really frustrating about it is that [Hickel] publicly gives the impression we don’t really know [about long term trends], which given all I said … and economic historians said in hundreds of great research publications is absolutely not true.”

The “hundreds of great research publications” to which Roser refers are the publications that underlie the Maddison database.  But - as I have pointed out before - these publications are about GDP, not about poverty, so they don’t help us address the question at hand.  Here Roser completely ignores my core argument, and once again fudges the issue (see the second half of this post for more).

Now, we do happen to have quite a lot of research about what happened to people’s lives during enclosure and colonization, which illustrates a process of mass immiseration.  I have listed some of that research in my posts, and have cited yet more in The Divide.  Roser gives no indication that he has any familiarity with it. 

9. “If Hickel argues that $1.90 a day is too low a bar to set for poverty, I’d counter that a definition of poverty that doesn’t include Malthusian conditions before industrialization is inadequate as well.”

By invoking “Malthusian” conditions, Matthews is repeating a story that he just assumes to be true.  He hasn’t cited a single source for this claim.  More importantly, though, Matthews gets his history exactly backwards. Malthus was writing about a population that had already been immiserated by enclosure in England.  Their misery was not some prior, timeless condition but rather an artifact of the dispossession that paved the way for industrialization (see Ellen Meiksins Wood). Indeed, Malthus was a conservative thinker who believed, basically, that enclosure was good because it put poor people at the mercy of hunger and therefore made them work harder and become more productive (so as to increase the GDP) - the same argument, incidentally, that the British made when they dispossessed indigenous Americans, and later Asians and Africans.

It is not appropriate to use this lens to speculate about the living conditions of people prior to enclosure – whether in England or (even more obviously) the global South. 


A response to Max Roser: how not to measure global poverty


Max Roser and Joe Hasell have written a post defending the methodology behind their long-term poverty graph.  It is not addressed to me, but it was written in response to my critique (which you can read here).

Unfortunately, their response doesn’t engage with most of my substantive arguments.  They do not address the evidence on how the $1.90 line is too low to be meaningful.  They call $1.90 “extreme”, which it is – and that is precisely why it should not be used in public communication.  Remember, the World Bank has repeatedly pointed out that it is too low to inform economic policy.  Why then should it be acceptable for Gates, Pinker and Roser to use it to inform public discussion about economic policy (i.e., whether the global economy is working for the world’s majority or not)?  As I see it, Roser should stop using $1.90 in his flagship graphs. 

Roser and Hasell also do not address the critique, made by Sanjay Reddy and many others, that the PPP baselines that underpin the $1.90 line overstate the purchasing power of the poor.  Nor do they address my argument that progress against global poverty is actually worsening, when poverty is measured against our capacity to end it.

Roser and Hasell imply that I claimed poor people are getting poorer.  I have never said that; that is a straw man.  Indeed, I pointed out that the incomes of the poor are going up in aggregate, but – crucially – not enough to raise them out of poverty.  That’s what’s at stake.  My actual claim was that that the number of people living under $7.40 per day has increased since 1981, and now stands at 4.2 billion people, 58% of the world’s population.  It’s not clear to me why this fact has stirred such controversy. 

Roser and Hasell also take pains to remind us that global GDP is going up.  But here again this is a straw man.  Of course global GDP is going up!  That’s not what keeps me up at night.  What troubles me is the distribution of global GDP.  In per capita terms, virtually all of it gets sucked straight into the global North, driving a wide and growing gap between the global North and South, as we can see here.


Now, to the important bit.  The real point of Roser and Hasell’s post is to defend their choice to merge two very different datasets for their long-term graph: Bourguignon and Morrisson (2002) for the period 1820-1970, and World Bank data for 1981 and following. 

I pointed out earlier that these two datasets measure different things, and cannot be united into a single trend.  The B/M data is based on the Maddison database, which was never intended to measure poverty, but rather GDP (“income”) through national accounts.  B/M try to estimate the share that goes to households, and then estimate the national distribution, but they are clear (they state it over and over) that this is basically a shot in the dark.   The World Bank data, by contrast, is based on household surveys of income and consumption of non-monetary goods and services (including everything from domestic production to gifts to hunting), at least where consumption data is available.

I initially characterized this distinction as one between income and consumption.  This is a simplification, to be sure – but is commonly used shorthand to describe the difference.  Roser and Hasell pounced on it.  In defending their use of both measures, they have argued that the Maddison data includes not only income but also non-monetary goods.  It might seem that this settles the argument about the long-term trend.  But in fact Roser and Hasell have significantly misrepresented the Maddison data.

Let’s dig in here.  The underlying data that Bourguignon and Morrison use is listed online and available for free at Maddison (1995).  There are two important things that stand out. 

First, coverage.  The data on global North countries is rich and robust.  Not so for the South.  Only 7 pages of this appendix pertain to the three continents of the global South (pages 93 to 99, at the very end).  For Asia and Latin America, data for prior to 1900 exists for only three countries each.  For Africa there is no data at all prior to 1900, and data for prior to 1950 exists for only three countries.  

It doesn’t take a statistician to recognize that this is not an adequate empirical basis on which to draw conclusions about long-term global poverty during the period of colonization.  The data just isn’t there.  There’s no getting around this critique, yet Roser and Hasell have ignored it.  Sure, one might speculate on long-term trends in a text intended for academics, while foregrounding the uncertainty and lack of data, as B/M have done.  But to create a shiny graph for lay consumption on social media while mentioning none of the uncertainty whatsoever (as in the graph that Gates tweeted) is irresponsible. 

The World Bank’s PovcalNet suppresses results when survey coverage is too low to be meaningful, so as not to mislead people.  So too should Roser. That would be a responsible move.

Second, it’s simply not true that the Maddison data counts all non-monetary consumption in the global South, as Roser and Hasell imply.  Now, it does count non-monetary GDP – for example, national accounts of grain production, or production from some other industries (typically only those that colonizers were interested in), including when that production happened domestically.  But it does not include goods and services gained from commons: game and fodder from communal forests, water from communal irrigation systems, chickens and vegetables raised for domestic consumption, help from neighbours, etc… in other words, nothing that is not normally captured in national accounts (or any official accounts of commodity production). 

In this sense, the Maddison data is fundamentally different from the data that is gathered from household surveys.  There’s no getting around it.  Roser and Hasell try to muddy this distinction, misleading people into believing that the two datasets are basically the same. They are not.  Branko Milanovic, the world expert on this question, makes this clear here.

This is important when it comes to measuring long-term poverty, because the period 1820-1950 covers a period of enclosure and mass dispossession under colonialism across the global South.

Take the case of India, for example.  In the 19th century, the British went about enclosing communal forests (which they used to build their navy), privatizing communal waterways, destroying communal granaries, etc.  The goal of these policies was explicit: to put farmers at the mercy of hunger so that that they would have no choice but to intensify agricultural production for export (to London) if they wanted to survive.  And it worked: grain production went up, exports rose.  This is reflected in the national accounts. 

But during this very period, from 1876-1902, 30 million Indians starved to death as a result of British policy.  Life expectancy collapsed by 20% from 1870 to 1920.  Why?  Because people had been stripped of commons they had traditionally depended on. Think about it this way. If you enclose a forest and sell it for timber, GDP goes up. But this accounting tells us nothing of what the local community loses in terms of their use of that forest.  Nothing.  The loss is swept under the statistical rug.

That’s what gets left out of Roser’s graph.  The story of colonization and the impact it had on the livelihoods of the colonized is elided, repackaged as a narrative of progress.   

Roser is not really to be blamed for this.  He works with statistics, and none of this is captured by statistics.  But there are disciplines that do speak to this question.  Economic anthropology, in which I am trained, has for more than a century described how pre-capitalist economies work – describing how people have managed commons, how they have organized gift exchange and systems of reciprocity, etc.  If we want to understand what happened – and what was lost – during the forced transformation from subsistence economies to capitalist ones, we need to pay attention to that research. 

A final thought.  Roser and Hasell imply that I have “dismissed” the hard work of studious researchers.  I have done no such thing.  I respect the work they have done; I know how difficult it is.  My argument, rather, is that the results of that research are simply not robust enough to draw the conclusions that Roser draws, and which Gates and Pinker have trumpeted.  Indeed, they were never intended for that purpose. We don’t need to be afraid of this critique just because it threatens a long-familiar story.  What we need is to tell better, more accurate stories.  That’s how science progresses.

So, this is my plea.  Take the graph down.  It’s time to stop using it. 

Or, if it must be kept up, this is what needs to change (and I have stated this to Roser and Hasell directly).  Every time the graph appears, it needs to foreground (a) that the two underlying methods are different and not comparable; (b) that the data for prior to 1950, and specifically prior to 1900, is extremely thin for the global South and not robust enough to draw strong conclusions; and (c) that the data does not capture the impact that colonization had on people’s livelihoods.  That shouldn’t be too difficult. 


A letter to Steven Pinker (and Bill Gates, for that matter) about global poverty


Dear Steven,

I’m writing to respond to a letter you posted regarding claims I made in the Guardian about the global poverty narrative.  I’m addressing you directly because I think it’s preferable to engaging in back-channel debates, and because I’d like to invite you to respond to what follows.  This is an important question and it demands serious, honest engagement. 

The point of my piece was that the story of global poverty is more complex than you and Gates have been willing to acknowledge, and the data do not support your narrative about neoliberal globalization.  Let me elaborate on my key points here, to clear up any confusion, while also addressing your specific comments.

First, the long-term poverty graph (1820-present) developed by Max Roser and recently tweeted by Bill Gates is misleading and has little empirical legitimacy.  There are a few reasons for this.

Real data on poverty has only been collected since 1981, by the World Bank.  It is widely accepted among those who research global poverty that any data prior to 1981 is simply too sketchy to be useful, and going back to as early as 1820 is more or less meaningless. 

The data for 1820-1970 comes from a source (Bourguignon and Morrisson 2002) that draws on the Maddison database on world GDP.  That data was never intended to assess poverty, but rather the distribution of GDP – and that for only a limited range of countries. Data for the global South is particularly thin, and there is very little that exists for prior to 1900. The data is not robust enough to draw meaningful conclusions about what was happening to people’s livelihoods during the colonial period. 

It is important to recognise that the graph mixes two very different measures.  The measure for 1820-1970 is based on estimates of GDP per capita, with only rough guesses about household share, and takes little if any account of the goods and resources that people may have acquired from their land, from trees, from forests, from rivers and the sea, and in the form of gifts from relatives.  We might try to speculate about the share of GDP that the poorest people had, but that’s very different from telling us anything very useful about poverty.  By contrast, the World Bank’s measure for 1981ff is based on surveys that seek to assess household income and, wherever possible, consumption of all non-monetary goods.

These two disparate measures cannot be united into a single long-term trend, and cannot be used to draw confident conclusions.  Roser’s graph might make for nice social media, but it’s not rooted in science.

In fact, uniting the two methodologies is misleading in both directions.  (1) By using GDP per capita from 1820-1970 it likely understates the resources that households had at their disposal in comparison to the representation of the later period, and (2) By including total consumption from 1981ff it likely overstates people’s “income” in comparison to the representation of the earlier period.  

The only way to construct a legitimate long-term graph would be to use a single consistent indicator.  While data on GDP per capita alone is not regarded as a robust way of assessing poverty, it is at least available (if too patchy to be useful) for the whole period.  But in such a graph the falloff in poverty since 1981 would not be nearly as steep, as it would not count non-monetary transactions.  Alternatively, we could wait until someone devises a reasonable method for measuring poverty in terms of household consumption since 1820.  But in the meantime, I think it’s wise to refrain from making claims about long-term poverty trends that lack empirical validity. 

You say: “Hickel’s picture of the past is a romantic fairy tale, devoid of citations or evidence.”  On the contrary, as the above makes clear, it is the graph of the past on which you so glibly rely that is devoid of meaningful evidence. 

As to my actual claims about the past, my argument was straightforward.  I simply pointed out that we cannot ignore the fact that the period 1820 to circa 1950 was one of violent dispossession across much of the global South.  If you have read any colonial history, you will know colonizers had immense difficulty getting people to work on their mines and plantations.  As it turns out, people tended to prefer their subsistence lifestyles, and wages were not high enough to induce them to leave.  Colonizers had to coerce people into the labour market: imposing taxes, enclosing commons and constraining access to food, or just outright forcing people off their land. 

You ask for citations.  Here are some you might try: Sven Beckert’s Empire of Cotton, Ellen Wood’s The Origins of Capitalism: A Longer View, Mike Davis’ Late Victorian Holocausts, Adam Hochschild’s King Leopold’s Ghost, and of course Karl Polanyi’s The Great Transformation.

The process of forcibly integrating colonized peoples into the capitalist labour system caused widespread dislocation (a history I cover in The Divide).  Remember, this is the period of the Belgian labour system in the Congo, which so upended local economies that 10 million people died – half the population.  This is the period of the Natives Land Act in South Africa, which dispossessed the country’s black population of 90% of the country.   This is the period of the famines in India, where 30 million died needlessly as a result of policies the British imposed on Indian agriculture.  This is the period of the Opium Wars in China and the unequal treaties that immiserated the population. And don’t forget: all of this was conducted in the name of the “free market”.

All of this violence, and much more, gets elided in your narrative and repackaged as a happy story of progress.  And you say I’m the one possessed of romantic fairy tales.

The Maddison database on which you rely might tell us what the dispossessed gained in GDP per capita (eventually), but it does not tell us whether those gains offset their loss of lands, commons, supportive communities, stable local economies.  And it tells us nothing about what global South economies might be like today had they been free to industrialize on their own terms (take the case of India, for instance).

Let me be clear: this is not a critique of industrialization as such.  It is a critique of how industrialization was carried out during the period in question.  If people had willingly opted into the capitalist labour system, while retaining rights to their commons and while gaining a fair share of the yields they produced, we would have a very different story on our hands.  So let’s celebrate what industrialization has achieved – absolutely – but place it in proper context: colonization, violence, dispossession and all.  All we gain from ignoring this history is ignorance.

Now, to the present period.

You say that the “massive fall of global extreme poverty” is simply a neutral fact of the data.  But here again the data on this is more complex than you have ever acknowledged (I collaborated with Charles Kenny to review the basics here).  

The narrative that you and Gates peddle relies on a poverty line of $1.90 per day.  You are aware, I’m sure, that this line is arbitrary. Remarkably, it has no empirical grounding in terms of how much money is necessary to satisfy actual human needs.  Indeed, the empirical evidence we do have demonstrates that $1.90 is far too low to be meaningful, for reasons I have outlined in my work many times (see here and here).  See Reddy and Lahoti’s withering critique of the $1.90 methodology here.

Here are a few points to keep in mind.  Using the $1.90 line shows that only 700 million people live in poverty.  But note that the UN’s FAO says that 815 million people do not have enough calories to sustain even “minimal” human activity.  1.5 billion are food insecure, and do not have enough calories to sustain “normal” human activity.  And 2.1 billion suffer from malnutrition.  How can there be fewer poor people than hungry and malnourished people?  If $1.90 is inadequate to achieve basic nutrition and sustain normal human activity, then it’s too low – period.  It’s time for you and Gates to stop using it.  Lifting people above this line doesn’t mean lifting them out of poverty, “extreme” or otherwise.

Remember: $1.90 is the equivalent of what that amount of money could buy in the US in 2011.  The economist David Woodward once calculated that to live at this level (in an earlier base year) would be like 35 people trying to survive in Britain “on a single minimum wage, with no benefits of any kind, no gifts, borrowing, scavenging, begging or savings to draw on (since these are all included as ‘income’ in poverty calculations).”  That goes beyond any definition of “extreme”.  It is patently absurd.  It is an insult to humanity.

In fact, even the World Bank has repeatedly stated that the line is too low to be used in any but the poorest countries, and should not be used to inform policy.  In response to the Atkinson Report on Global Poverty, they created updated poverty lines for lower middle income ($3.20/day) and upper middle income ($5.50/day) countries.  At those lines, some 2.4 billion people are in poverty today – more than three times higher than you would have people believe.

But even these figures are not good enough.  The USDA states that about $6.7/day is necessary for achieving basic nutrition.  Peter Edwards argues that people need about $7.40 if they are to achieve normal human life expectancy.  The New Economics Foundation concludes that around $8 is necessary to reduce infant mortality by a meaningful margin.  Lant Pritchett and Charles Kenny have argued that since the poverty line is based on purchasing power in the US, then it should be linked to the US poverty line – so around $15/day.

The literature on this issue is now vast and nuanced – I have only scratched the surface here – and yet you pretend it doesn’t even exist. That is intellectually irresponsible, and an inadequate approach to scholarship.

You say: “The level at which one sets an arbitrary cutoff like ‘the poverty line’ is irrelevant — the entire distribution has shifted, so the trend is the same wherever you set it.” 

Not so fast. In fact, the story changes quite a bit - and you know it. If we use $7.40 per day, we see a decline in the proportion of people living in poverty, but it’s not nearly as dramatic as your rosy narrative would have it.  In 1981 a staggering 71% lived in poverty.  Today it hovers at 58% (for 2013, the most recent data).  Suddenly your grand story of progress seems tepid, mediocre, and – in a world that’s as fabulously rich as ours – completely obscene.  There is nothing worth celebrating about a world where inequality is so extreme that 58% of people are in poverty, while a few dozen billionaires have more than all of their wealth combined. 

That’s proportions. Don’t get me wrong: proportions are an important indicator – and we should pay attention to it.  But absolute numbers are equally important.  In fact, that is the metric that the world’s governments first agreed to target in the Rome Declaration in 1996, the precursor to the Millennial Development Goals.  The goalposts were shifted to proportions in the following years, which created the impression of faster progress.  But really now it’s a moot point: if the goal is to end poverty, what matters is absolute numbers.  Certainly that’s what matters from the perspective of poor people themselves.

And if we look at absolute numbers, the trend changes completely. The poverty rate has worsened dramatically since 1981, from 3.2 billion to 4.2 billion, according to World Bank data.  Six times higher than you would have people believe. That’s not progress in my book – that’s a disgrace.  It is a crushing indictment of our global economic system, which is clearly failing the majority of humanity. Your claims about global poverty intentionally skate around this fact. Again, that is not responsible scholarship.


But what’s really at stake here for you, as your letter reveals, is the free-market narrative that you have constructed.  Your argument is that neoliberal capitalism is responsible for driving the most substantial gains against poverty.  This claim is intellectually dishonest, and unsupported by facts.  Here’s why:

The vast majority of gains against poverty have happened in one region: East Asia.  As it happens, the economic success of China and the East Asian tigers – as scholars like Ha-Joon Chang and Robert Wade have long pointed out – is due not to the neoliberal markets that you espouse but rather state-led industrial policy, protectionism and regulation (the same measures that Western nations used to such great effect during their own period of industrial consolidation).  They liberalized, to be sure – but they did so gradually and on their own terms. 

Not so for the rest of the global South.  Indeed, these policy options were systematically denied to them, and destroyed where they already existed.  From 1980 to 2000, the IMF and World Bank imposed brutal structural adjustment programs that did exactly the opposite: slashing tariffs, subsidies, social spending and capital controls while reversing land reforms and privatizing public assets – all in the face of massive public resistance.  During this period, the number of people in poverty outside China increased by 1.3 billion.  In fact, even the proportion of people living in poverty (to use your preferred method) increased, from 62% to 68%.  (For detailed economic data and references to the relevant literature, see Chapter 5 of The Divide).


In other words, the imposition of neoliberal capitalism from 1980 to 2000 made the poverty rate worse, not better. 

Since 2000, the most impressive gains against poverty (outside of East Asia) have come from Latin America, according to the World Bank, coinciding with a series of left-wing or social democratic governments that came to power across the continent.  Whatever one might say about these governments (I have my own critiques), this doesn’t sit very well with your neoliberal narrative.

But there is something else that needs to be said here.  You and Gates like to invoke the poverty numbers to make claims about the legitimacy of the existing global economic system.  You say the system is working for the poor, so people should stop complaining about it. 

When it comes to assessing such a claim, it’s really neither absolute numbers nor proportions that matter.  What matters, rather, is the extent of global poverty vis-à-vis our capacity to end it.  As I have pointed out before, our capacity to end poverty (e.g., the cost of ending poverty as a proportion of the income of the non-poor) has increased many times faster than the proportional poverty rate has decreased (to use your preferred measure again).  By this metric we are doing worse than ever before.  Indeed, our civilization is regressing. Why?  Because the vast majority of the yields of our global economy are being captured by the world’s rich.

As I pointed out in the Guardian piece, only 5% of new income from global growth goes to the poorest 60% of humanity – people living on less than $7.40/day.  You have neither acknowledged this as a problem nor attempted to defend it.  Instead you just ignore it, I suppose because it undermines your claims about how well the economy is working for poor people.

Here’s how well it’s working: on our existing trajectory, according to research published in the World Economic Review, it will take more than 100 years to end poverty at $1.90/day, and over 200 years to end it at $7.4/day.  Let that sink in.  And to get there with the existing system – in other words, without a fairer distribution of income – we will have to grow the global economy to 175 times its present size.  Even if such an outlandish feat were possible, it would drive climate change and ecological breakdown to the point of undermining any gains against poverty.

It doesn’t have to be this way, of course.  We can end poverty right now simply by making the rules of our global economy fairer for the world’s majority (I describe how we can do this in The Divide, looking at everything from wages to debt to trade).  But that is an approach that you and Gates seem desperate to avoid, in favour of a blustering defense of the status quo. 

You say, “The drastic decline in extreme poverty is corroborated by measures of well-being other than income that are correlated with prosperity, such as longevity, child mortality, maternal mortality, literacy, basic education, undernourishment, consumption, etc.” 

Yes, life expectancy, mortality and education have improved – this is fantastic news that we should celebrate!  But, a few things:

(1)  You can’t make an argument about poverty by pointing to something else entirely. Consumption is increasing, yes.  But that’s not what’s at stake here. What’s at stake is whether consumption is increasing enough to raise people out of poverty. 

(2) I’ll be the first to agree that income and consumption are not the only measures of well-being.  But one reason they are absolutely crucial is because they allow us to assess inequality in the distribution of world resources.  A higher life expectancy among the poor is no justification for condemning them to a tiny and ever-shrinking share of global income.  That is not a morally defensible position. 

(3) In your work you have invoked gains in life expectancy and education as part of a narrative that seeks to justify neoliberal globalization.  But here again that’s intellectually dishonest.  What contributes most to improvements in life expectancy is in fact simple public health interventions (sanitation, antibiotics, vaccines), and what matters for education is, well, public education.  Indeed, the countries that have been most successful at this are those that have robust, free healthcare and education.  Don’t forget that the US has worse infant mortality than Cuba.

(4) As for hunger, your claim here relies on a methodology used by the FAO after 2012 that has been widely criticized by scholars. The hunger-reduction narrative depends on a calorie line that – like your $1.90 poverty line – is too low to support normal human activity, ignores the impacts of food price crises, and tells us nothing about nutrient deficiencies.  I cover this in detail in the second half of this paper.  According to the FAO’s earlier methodology, both the number and proportion of people in hunger was higher in 2009 than in 1995 – another trend that you glibly ignore.

In your concluding point, you descend to citing a piece by Ryan Bourne, not an academic who studies poverty but rather an employee of the Cato Institute, a right-wing think tank funded by the Koch Brothers.  The piece is riddled with misleading claims which, when I pointed them out to him, he never corrected. I don’t think we should consider this a valid source.

You opened your letter by slandering me as a “Marxist ideologue”.  I don’t need to tell you that this doesn’t count as an argument, and doesn’t cover for the fact that you haven’t addressed any of my substantive claims.  In any case, I’m not quite sure what you mean.  If by Marxist ideologue you mean someone who points out that the poverty data is more complex than your narrative allows, then, well, I suppose I am. 


The scandal of British aid


*This is the text of a speech delivered at the Cambridge Union in defense of the proposition: This house believes that British aid is not working.

Ladies and gentlemen, it is vital that we distinguish clearly between two very different critiques of aid that are out there - one from the far right and one from the mainstream left.

Both of them are inadequate.

In these Brexity days of course the right-wing narrative is obviously the most prominent – splashed as it is across the tabloids.  And I’m sure you know it well.  Aid is a waste of our money, it says.  We’re sending an eye-watering £14 billion pounds per year to poor countries in Africa and Asia.  But why should we shoulder responsibility for the welfare of people in these far-flung lands?  Plus, the only reason they’re poor in the first place is because their governments are corrupt… it makes precious little sense to throw money down that drain.

This argument – favoured by hucksters like Nigel Farage and Tommy Robinson – is clearly shot through with nationalist sentiment, laced with xenophobia, and devoid of basic human compassion: pull up the drawbridge, they say – it’s every nation for itself.  If the world beyond our shores is crippled by poverty and suffering, it has nothing to do with us.  Not our problem.  We’re better off spending that money on ourselves.

This has always struck me as completely bizarre.  The right lambasts aid as out of step with their national economic self-interest.  But in fact nothing could be further from the truth.  And this is where the standard left-wing argument comes in.  It’s not aid itself that’s the problem, they say.  Aid is a vital expression of human solidarity.  It’s how aid is used that’s wrong.  It gets leveraged to advance neoliberal agendas, it ends up lining the pockets of British companies, and it does precious little to help actual poor people.  

And in this they’re absolutely right.  A huge chunk of British aid – billions of pounds each year – goes not to poor people but rather to an old colonial-era investment firm called CDC.  CDC’s investments include luxury hotels, shopping malls, restaurant chains and advertising companies.  They claim that all of this will end up trickling down to the poor – but there’s exactly zero evidence for this, and in fact even the National Audit Office in a recent report agrees that it’s a lie. 

But there’s more.  Of all the UK aid spent on procurement, a paltry 3% of it goes to suppliers in the global South – the countries our aid is supposed to help.  Meanwhile a staggering 90% gets paid to British firms.  Boomerang aid, we might call it.  And it’s a booming business. 

Consider for example the single biggest recipient of this boomerang aid: Adam Smith International, a right-wing, for-profit firm whose main purpose is to peddle free-market extremism around the world.  They’ve been handed more than half a billion pounds in aid-funded contracts over the past few years; more than the entire amount spent on human rights and women’s equality organisations, and twice the amount spent on HIV programs.  The company’s profits have soared while suckling on the teat of British aid, as its directors pay themselves towering six-figure salaries. 

This is the real scandal, then: that aid money is taken from the pockets of British taxpayers and sent straight into the already-gilded coffers of the British business elite.  It’s a shameful abuse of our most compassionate impulse.

But this is just the tip of the iceberg.  While British aid is supposed to be “independent” from British interests, the government’s actual policy on this explicitly aims to use aid – and I quote – “to strengthen UK trade and investment opportunities around the world.” 

So what does this look like?  Well, instead of helping poor countries build up the public services that people need, like the ones we enjoy here in Britain, DFID is leading a push for for-profit companies to deliver private schooling and healthcare across Africa and Asia.  Having faced stiff opposition trying to privatize public services at home, the government are taking their agenda abroad – despite the avalanche of evidence on how destructive this approach has been. In fact, the UN itself just released a report concluding that privatization has caused immense harm to the poor while eroding basic human rights.  And yet DFID marches on. 

And it’s not just privatization.  Aid money is being leveraged to get poor countries to adopt so-called “business-friendly” laws that slash social and environmental protections.  It’s being poured into Private Finance Initiatives that shackle governments to high-interest debts.  It’s being channeled into private equity firms that operate out of tax havens.  And, perhaps worst of all, hundreds of millions of pounds are being pumped each year into fracking and other fossil fuel projects around the world, helping companies like BP pry open oil and gas reserves abroad, giving lie to our government’s promises to tackle climate breakdown.

So, is British aid working?  Well, it depends on who you are.  It’s working quite nicely for well-connected British firms, for oil barons and for slick investors looking to break their way into new markets – something that the Farages of the world bizarrely fail to appreciate.  But not so nicely for poor people hoping to access the basic goods they need to live decent lives. 

But I digress.  This is not in fact the argument I want to make to you tonight.  There’s something else – something more important, something that transcends this partisan squabble. 

My opponents have stood up here and tried to convince you that British aid is making a real difference to the lives of the poor.  And I have no doubt that on some level they’re right. Look past the handouts to British firms, look past the privatization, the debt, the destructive fossil fuel investments… somewhere down the line at least some of that 14 billion pound budget must be doing something to help the wretched of the earth. 

So, let’s imagine, just for the sake of argument, that they’re correct.  In fact, let’s go further and imagine that every single pound of British aid directly improves the lives of the poor.  Even if that were the case, I would still defend the proposition that aid is not working.  How can I say this?  Because the aid industry fundamentally misses the point about what causes poverty in the first place, and therefore can never hope to solve it.  It has the story all wrong. 

And this is crucial: aid is, above all, a story.  It is a story about the world that carries a powerful implicit message about poor countries and rich countries.  Poor countries are poor because of their own internal problems, it tells us.  Maybe they don’t have the right policies, maybe they have bad institutions, maybe they’re corrupt.  Meanwhile, rich countries like Britain are rich because of their own brilliance and hard work, and they now reach out across the chasm to give generously of their surplus.

The problem with this story is that it presupposes a fundamental disjuncture between the wealth of rich countries and the poverty of poor ones, as if the two have nothing at all to do with one another.  But nothing could be further from the truth.  On the contrary, historians are clear that rich countries have grown rich not in spite of poor countries, but because of them – through a global economic system that has been designed to siphon our world’s wealth and resources into the hands of a few powerful nations at the expense of most of the rest of the world.

And it’s not colonialism I have in mind here, though that would be an obvious target.  No, I’m talking about what’s happening right now.  According to the most recent data we have on the movement of financial resources around the world, more money flows from poor countries to rich countries than the other way around – and that includes everything: aid, loans, foreign investment, remittances, everything.  In fact, net outflows from poor countries amount to some $2 trillion per year.  If we look at the data, it becomes clear that poor countries are developing rich countries, not the other way around.  

What constitutes these losses?  Well, poor countries lose some $200 billion dollars a year in interest payments on debts to the rich world, many of which have already been paid off many times over.  They lose some $500 billion dollars each year in profits repatriated by multinational companies.  And they lose nearly $1 trillion each year to large firms that siphon money into offshore tax havens. 

These losses vastly outstrip the aid budget.  In fact, get this: for every dollar of aid that poor countries receive, they lose up to $24 in net outflows because of how the global economy is structured.  And that’s not counting the losses they sustain through unfair trade and underpaid labour – losses that happen year after year because the institutions that govern the rules of the global economy – the World Bank, the IMF, the World Trade Organization – are fundamentally undemocratic, designed to hand voting power and bargaining power mostly to the richest economies, ensuring that global inequality will reproduce itself forever. 

If you’ve ever wondered why the income gap between the global North and South continues to widen, tripling since the end of colonialism, this is it. 

But all of this gets erased by the story of aid, which makes the takers of this system seem like givers, and grants them a kind of moral high ground. 

Britain boasts about its aid budget.  But no one ever talks about Britain’s role in imposing structural adjustment across the global South since the 1980s, forcing poor countries to cut social spending, slash labour laws, and dismantle public services, pushing billions into poverty.  No one ever talks about how Britain illegally dumps subsidized grains on global South markets, undercutting local farmers and driving them off their land.  No one ever talks about Britain’s role in driving land grabs and illegitimate debt.  And no one ever talks about how the City of London sits at the center of the world’s tax haven network, which has sucked trillions of dollars out of global South economies. 

Aid?  There is no aid, really – it’s just a fraction of the plunder that rich countries extract.  Given back like a slap in the face. That’s why aid is not working, and that’s why it will never work.  Aid is just a story we tell ourselves.  It neatly hides the violence that maintains the global class divide, and lulls us into consenting to an unjust world order.    

It’s important that we retain our impulse to compassion and solidarity. But let’s be honest.  It is delusional, and anti-intellectual, to believe that charity can be a meaningful solution to what is ultimately a pathology of power.  We need to be smarter than that.  We need to recognize the structural dimensions of global inequality.   The poor don’t need charity, what they need is justice.  They need a global economy that is fundamentally fairer. 

There’s much that Britain could do toward this end, if we were serious about it.  We could push to democratize international institutions, ensuring that poor countries get a fair voice in the decisions that affect them.  We could close down the tax havens that Britain controls in its overseas territories.  We could push for new rules that protect public services, and even for a global minimum wage, which would guarantee a decent livelihood to the workers who produce the mountains of stuff we consume. 

And here’s the best part: all of this could be accomplished without a single pound of aid.  It would, however, require a fight – a fight against those who benefit so tremendously from the status quo.  But then, so has every struggle for a better world.  The arc of history bends toward justice, Martin Luther King Jr once said.  But it will not bend on its own. 


Inequality and the ecological transition


Last month Branko Milanovic published a blog post about the Yellow Vest movement against the fuel tax in France.  He was worried – like many analysts – that the uprising proves it will be virtually impossible to roll out the policies necessary to reduce carbon emissions.  He’s convinced that people simply won’t accept it.

He also took the opportunity to hit out at myself and Kate Raworth.  “Proponents of degrowth and those who argue that we need to do something dramatic regarding climate change are singularly coy and shy when it comes to pointing out who is going to bear the costs of these changes.  As I mentioned in my discussion with Jason and Kate, if they were serious they should go out and tell Western audiences that their real incomes should be cut in half and also explain to them how that should be accomplished.”

Let’s deal with these issues one at a time. 

First, the Yellow Vests.  Don’t get it twisted: the French began rioting not because of the fuel tax as such, but rather because it was extremely regressive.  The burden of the tax fell disproportionately on rural and peri-urban workers who, already struggling to make ends meet under a government that is openly disdainful of working class people, were suddenly forced to pay more at the pump simply in order to get to their jobs.  Meanwhile, the elites of Paris and other cities, who get to use public transportation, were less affected.  The Yellow Vests felt this was unfair.  And they are right.

The Yellow Vests are not against environmental policy.  In fact, they highlight ecology as a top priority, and have even called for stronger climate action, accusing Macron of fiddling around the edges with “piecemeal measures”.  Real climate policy, they say, requires widespread economic changes, and should target the real drivers of climate change: rich consumers and, above all, corporations.  I agree with them.

There are many ways to make a carbon tax fair and progressive.  One obvious step would be to tax carbon at source and distribute part of the yields back to working-class households in the form of a dividend or rebate.  The effect would be to ensure that the costs of the energy transition are borne by the rich and by corporations, as it should be.

So, my response to Branko: it’s not the gas tax that’s the problem.  It’s inequality that’s the problem. 

Branko’s post indicates that he is aware of this dynamic… so one wonders why he is so confused about the way forward.  It’s simple: reducing inequality needs to be at the very heart of climate policy.


This brings me to the next point, about degrowth.

It is increasingly apparent that Branko has read very little in the field of post-growth or ecological economics.  There are literally hundreds of peer reviewed articles and books that explore exactly the questions he’s asking here - including this new economic model that investigates policies for a de-growth scenario in, of all places, France - and yet it seems Branko can’t be bothered to engage with them. 

Instead, he continues to misrepresent our scholarship.  Literally no one has ever argued that we should just cut everyone’s income in half.  That is a ridiculous assertion.  Repeating this straw man over and over won’t somehow magically make it true. 

Post-growth policy begins with the very principle that – as the Yellow Vests themselves have pointed out – should inform all ecological policy: greater equality.  Indeed, the post-growth movement has long argued that equality can be a substitute for growth.  By sharing what we already have more fairly, we won’t need to plunder the Earth for more. 

The objective of degrowth is to scale down aggregate resource use, energy demand and emissions, focusing on rich, high-consuming nations, and to do this while improving people’s well-being.  How do we make this happen? Here are five first steps:

1. Abandon GDP as a measure of progress and either replace it with a more holistic alternative (like the Genuine Progress Indicator) or focus public policy on a series of social indicators to be improved (like well-being, health, good employment) and ecological footprint indicators to be reduced (like resource use, emissions, waste).

2. Scale down throughput by introducing progressive taxes on resource use, emissions and waste, or impose caps on these activities and tighten them each year.  Require manufacturers to offer extended warranties on all material products in order to encourage longer lifespans.  Legislate a “right to repair”, and introduce laws against planned obsolescence.  Ban advertising in public spaces, as Sao Paulo and other cities have done.  Prevent supermarkets from trashing food, as France and Italy have done, and impose fees on food waste while banning it from landfills, as South Korea has done.  Etc.

Reducing the material throughput of the economy not only takes pressure off ecosystems, it also reduces energy demand, which - as the recent IPCC report points out - makes the transition to renewable energy much more feasible.

3. Shorten the working week and distribute available work more equally in order to ensure full employment.  Not only does a shorter working week have all sorts of positive ecological and social benefits, it also relieves pressures for growth. In the existing economy, as labour productivity improves people get laid off, and we have to generate more growth in order to create new jobs and mop up unemployment. Shortening the working week allows us to create jobs without the need for growth. It also ensures that if aggregate economic activity slows down (which it likely will as material throughput declines) then workers laid off from dying dirty industries can get jobs in cleaner ones, even as total labour requirements diminish.

To offset reductions in working hours, either increase hourly wages with a living wage policy or (to avoid hurting small businesses) introduce a universal basic income, as per proposals by Andre Gorz

4. Expand universal social goods and reinstate commons, to ensure that people can access the resources they need in order to live well without high levels of income.  This means generous, high-quality public healthcare and education, rent controls, affordable public housing and transportation, and access to public parks and recreational facilities.  It could also mean a system of universal basic services, as UCL’s Institute for Global Prosperity has proposed.

Scaling down aggregate economic activity might reduce private riches, but - as I have argued before - it needn’t reduce public wealth.

5. Distribute national income more fairly by introducing either high marginal tax rates on top incomes (like the 80% top marginal tax rate the US averaged from 1943 to 1983), or a maximum wage policy.  Roll out a wealth tax, as Thomas Piketty has proposed, and a financial transaction tax.  Close down secrecy jurisdictions and introduce a global minimum corporate tax to wipe out tax evasion. Use the proceeds of these taxes, and of the above-mentioned fees on resource use, emissions and waste, to (a) help fund the rapid rollout of renewable energy infrastructure, (b) contribute to a universal basic income, and (c) invest in public goods.  Democratise workplaces and encourage co-operative ownership structures for businesses.

Branko says that I am “singularly coy and shy when it comes to pointing out who is going to bear the costs” of transitioning to an ecological economy.  I have no idea where he gets this notion.  On the contrary, I have always been clear that the transition requires justice as a core principle: that we create a fairer, more equitable society.  


Is inequality within countries getting better or worse?


In a recent Twitter post, Max Roser of Our World In Data claimed that the narrative about rising inequality within countries is incorrect. Inequality has been falling in as many countries as it has been rising, he said, “which should be really embarrassing for many news stories that suggest the opposite with great certainty.”

Roser’s tweet referred to an interesting blog post by Joe Hasell, with a graph illustrating the change in the Gini index within countries from 1990 to 2015. Countries above the 45-degree line have seen rising inequality, while countries below the line have seen falling inequality. It’s a pretty even split (although the majority of the world’s population live in countries that have seen rising, not falling inequality).

Screen Shot 2018-12-13 at 11.42.40 AM.png

This seems like good news indeed. So which is it? Is inequality getting better or worse?

What Roser doesn’t mention in his tweet is that the Gini index used here is a relative measure. If the incomes of the poor increase at a faster rate than the incomes of the rich, the Gini index shows a decline in inequality even if the absolute income gap between the rich and poor continues to widen. Hasell is aware of this issue, however, and mentions at the end of his post that calculations of absolute inequality suggest that inequality has been increasing over the same period.

So what’s going on here? Imagine that person A has an income of $1 per day while person B has an income of $100 per day. If A’s income grows by 100% (to $2) while B’s income grows by only 90% (to $190), the Gini index shows that inequality is decreasing even though the absolute gap between the two has increased substantially, from $99 to $188.

We can correct for this by using the absolute Gini: simply take the Gini index and multiply it by the average income of each country. Doing so gives us a very different picture of inequality. The graph below shows that the vast majority of the world’s countries have seen increasing absolute inequality from 1990 to 2015. Click through to explore an interactive version developed by Huzaifa Zoomkawala in conversation with Hasell and me.

There are various ways to calculate the absolute Gini. One can use Gross National Income (GNI) per capita, measured in either constant or PPP terms, or - to be more consistent with the underlying Gini data from Povcal - one can use mean income as captured by household surveys (as in the image above). The interactive graph gives users the option to pick between these various multipliers. But no matter which one you pick, the conclusion is the same: absolute inequality has been getting worse virtually everywhere.

These results are in keeping with recent research showing that the absolute Gini increased for the world as a whole as well as in most world regions from 1975 to 2010.

Keep in mind that the graph above is represented on a logarithmic scale. The linear scale (the default option on the interactive graph) has poor countries clumped together in the bottom left with rich countries soaring away. This skewed distribution is due to the vast differences in average incomes between countries, and illustrates the significant inequality that continues to persist between Western countries and the rest of the world.

There is no “correct” way to measure inequality. Both relative and absolute measures are important. For some reason the relative measure has become the most dominant by far (i.e., in the work of Branko Milanovic and in World Bank reports). But it is misleading to develop a narrative about inequality using the standard Gini index without (a) stating that it is a relative measure, and (b) providing the absolute measure for comparison.

This is important, because in my experience when most ordinary people (i.e., non-experts) think about inequality, they think of income gaps instead of ratios. I tested this recently with an online poll that gave respondents the chance to explain, in their own words, what they think when they hear someone say that inequality is “getting worse” or “diminishing”. Among 174 respondents, the vast majority (some 95%) indicated that they think of inequality in absolute terms.

This needs more formal research, of course; but if these preliminary results are anything to go by, then we risk seriously misleading the public by telling them that inequality is decreasing when in fact, according to common sense definitions, it is getting worse.


Here's a simple solution to the green growth / degrowth debate


A number of high-profile economists – people like Carlota Perez and Michael Liebreich – have recently come out swinging in favor of “green growth” theory, trying to assuage mounting public concerns about the fact that climate change and ecological breakdown are being driven by capitalist growth. 

What’s interesting about these interventions is that they explicitly pit themselves against their opposite – the idea of de-growth.  Even just a year or two ago, de-growth wouldn’t have been part of the conversation.  Once the province of ecological economists, it’s now gaining more mainstream attention as the evidence against growth mounts – and orthodox economists have no choice but to reckon with it.

But as they try to edge their way around certain prickly facts, their arguments get stranger and stranger.

Green growth theory relies on the assumption that GDP growth can be permanently and absolutely decoupled from resource use and emissions, and at a pace that’s fast enough to reverse ecological breakdown and keep us under 1.5 degrees, so that GDP can continue growing forever while environmental impacts decline.

There’s just one problem.  There’s no evidence that this is feasible.

Let’s start with emissions.  Fortunately, we know that GDP can be absolutely decoupled from emissions.  The real question is whether we can decarbonize fast enough to stay under 1.5 degrees, without relying on fanciful negative emissions technologies.  The answer, sadly, is no.  If we carry on with growth as usual, we need to decarbonize at a rate of 11% per year. That’s more than five times faster than the historic rate of decarbonization and about three times faster than what scientists project is possible, even under highly optimistic conditions.   

But let’s imagine, just for the sake of argument, that we manage to pull it off: we manage to shut down the fossil fuel industry and switch the whole planet’s energy infrastructure over to renewables, quickly, despite continuous economic expansion.  Does this solve our problem?  Are we on track for green growth forever?

Sadly not – because we still have another issue to deal with, namely, resource use.  What are we going to do with all of our clean energy?  The same stuff we were doing with fossil fuels: trawl the oceans for fish, raze forests for timber, strip mountains for minerals, clear land for cattle feed, etc.  And we will do this more and more each year, because that’s what growth demands. 

This brings us to the next conundrum - even more difficult than the first.  Can we continue to grow GDP indefinitely while reducing resource use down to sustainable levels?  Well, existing data are not very promising: there is no historical evidence for this, and all extant model-based projections have found that permanent absolute decoupling of GDP from resource use cannot be accomplished even with rapid rates of technological innovation and strong government intervention (references here).

But green growthers are not deterred. What if we shift to an economy based on services and knowledge, they ask? 

First of all, such a shift is already accounted for in the models. But we don’t need the models to answer this question. Services have grown dramatically in recent decades, as a proportion of world GDP - and yet during this same period global material use has not only continued to rise, but has accelerated, outstripping the rate of GDP growth.  In other words, there has been a recoupling, a rematerialization, despite a shift to services.   

The same is true of high-income nations as a group – and this despite the increasing contribution that knowledge is said to make to GDP growth in these economies.  Indeed, while high-income nations have the highest share of services and knowledge in terms of contribution to GDP, they also have the highest rates of resource consumption per capita. By far.

Why is this?  Partly because services require resource-intensive inputs (think universities and hospitals and airports and hotels).  Partly also because the income acquired from the service sector is used to purchase resource-intensive consumer goods (you might get your income from YouTube videos, but you use it to buy TVs and cars and beef).  And partly because our “knowledge” is geared primarily toward technological development – finding ways of increasing productivity and efficiency, which is then leveraged to expand production.

Our existing trajectory toward knowledge and services isn’t yielding the results that green growthers predict.  So why should the future be any different?


The evidence piles up.  And in the face of this evidence, proponents of green growth begin to turn to fairy tales.  Sure, they say, maybe green growth isn’t empirically actual, but there’s no reason that it can’t happen in theory.   We are limited only by our imagination!  There’s no reason we can’t have our incomes rising forever while we nonetheless consume less and less material stuff each year. 

And here they are right.  There’s no a priori reason why such a thing can’t happen in theory, in a magical alternative world. I would welcome such a turn - who wouldn’t?

Of course, there’s a certain moral hazard at stake when we start trafficking in fairy tales – telling people not to worry because eventually, somehow, GDP will magically de-link from resource use and we’ll be in the clear.  In an era of climate emergency and mass extinction, we don’t have time to speculate about imaginary possibilities.  We don’t have time to wait for this juggernaut of ecological destruction to suddenly stop being destructive, when all the evidence says that it won’t happen.  It is unscientific, and a profoundly irresponsible gamble with the future of our civilization.

So here’s what we can do.  Let’s not waste time speculating.  Let’s impose a legal limit on annual resource use and waste – something that de-growthers have been demanding for a long time – and tighten that limit year-on-year until we are back down to planetary boundaries. 

This is a simple and elegant solution to the debate.  If green growthers really believe that global GDP will keep growing, forever, despite rapid reductions in material use, then this shouldn’t worry them one bit. In fact, they should welcome such a move.  It will give them a chance to prove to the world once and for all that they are right.  Indeed, putting hard limits on resource use and waste will help incentivize the transition, spurring the shift toward dematerialized GDP growth.  What’s not to love? 

There’s only one problem: every time we propose this policy to green growthers, they wriggle away.  Indeed, to my knowledge, not a single proponent of green growth has ever agreed to take it up.

Why not?  I suspect that on some deep level - despite the fairy tales - they realize that this is not how capitalism actually works.  For two hundred years, capitalism has depended on extraction from nature. It has always needed an “outside,” external to itself, from which it can plunder some kind of original value, for free, without an equivalent return. To put a limit on material extraction and waste is to effectively kill the goose that lays the golden eggs.

Maybe green growthers will unite with us around limits to material use and waste. I hope so. But as long as they continue to refuse this simple solution, I don’t see how we can regard their fairy tales as anything other than a bluff. And it’s time to call it.


Degrowth: A Call for Radical Abundance


*Note: I expanded this post into a full article, published in Real World Economic Review in 2019. See here.

When orthodox economists first encounter the idea of degrowth, they often jump to the conclusion that the objective is to reduce GDP.  And because they see GDP as equivalent to social wealth, this makes them very upset.

Nothing could be further from the truth. 

I reject the fetishization of GDP as an objective in the existing economy, so it would make little sense for me to focus on GDP as the objective of a degrowth economy.  Wanting to cut GDP is as senseless as wanting to grow it.

The objective, rather, is to scale down the material throughput of the economy.  From an ecological standpoint, that’s what matters.  And indeed some orthodox economists might even agree.  Where we differ is that while they persist in believing (against the evidence) that this can be done while continuing to grow GDP, I acknowledge that it is likely to result in a reduction of GDP, at least as we presently measure it.  In other words, if we were to keep measuring the economy by GDP, that’s what we would see in a degrowth scenario.

And that’s okay. 

It’s okay, because we know that human beings can thrive without extremely high levels of GDP.

There are many pieces to this argument, but I want to focus on one here in particular.  One of the core claims of degrowth economics is that by restoring public services and expanding the commons, people will be able to access the goods that they need to live well without needing high levels of income. 

Take London, for instance.  Housing prices in London are astronomically high, to the point where a normal one-bedroom flat can cost upwards of $1 million.  These prices are fictional; largely a consequence of financial speculation and quantitative easing.  Now imagine if the government were to cap the price of housing at half its present level. Prices would still be outrageously high, but Londoners would suddenly be able to work and earn significantly less than they presently do without suffering any loss to their quality of life.  Indeed, they would gain in terms of time they could spend with their friends and family, doing things they love, improvements to their health and mental well-being, etc.  

The fictionally high prices of housing in London require that people work unnecessarily long hours to earn unnecessary money simply in order to access decent shelter – which they were previously able to access with a fraction of the income.  The consequence of this imperative is that everyone is forced to contribute unnecessarily to expanding the juggernaut of production, the output of which must in turn find an outlet in the form of ever-increasing consumption.

This is a problem that’s as old as capitalism itself.  And it has a name: enclosure. 

Ellen Wood argues that the origins of capitalism lay in the enclosure movement in England, during which wealthy elites walled off the commons and systematically forced peasants off the land in a violent, centuries-long campaign of dispossession.  This period saw the abolition of the ancient “right to habitation”, once enshrined in the Charter of the Forest, which guaranteed that ordinary people should have access to the resources necessary for survival.

Suddenly, England’s peasants found themselves subject to a new regime: in order to survive they had to compete with each other for leases on the newly privatized land.  And the leases were allocated on the basis of productivity.  So in order to retain their access to leases, farmers had to find ways to extract more and more from the earth, and from labour, even if it was vastly in surplus to need.  If they didn’t, and if they lost their leases, they could face starvation.   And of course this same force, the imperative of ever-increasing productivity, was at work also in the industrial sector.


In other words, the birth of capitalism required the creation of scarcity.  The constant creation of scarcity is the engine of the juggernaut. 

The same process unfolded around the world during European colonization.  In South Africa, colonizers faced what they called “The Labour Question”: How do we get Africans to work in our mines and on our plantations for paltry wages?  At the time, Africans were quite content with their subsistence lifestyles, where they had all the land and the water and the livestock they needed to thrive, and showed no inclination to do back-breaking work in European mines.  The solution?  Force them off their land, or make them pay taxes in European currency, which can only be acquired in exchange for labour.  And if they don’t pay, punish them.

Scarcity is the engine of capitalist expansion.

And, crucially, the scarcity was artificially created.  Created by elite accumulation, backed up by state violence.  In both England and South Africa, there was no actual scarcity.  The same land and forests and resources remained, just as they had always been.  But they were locked up.  Enclosed.  In order to regain access to the means of survival, people had no choice but to participate in the juggernaut. 

Today, we feel the force of scarcity in the constant threat of unemployment.  We must be ever-more productive at work or else lose our jobs to someone who will be more productive than we are.  But there is a paradox: as productivity rises, less labour is needed.  So workers get laid off and find themselves with no means of survival.  Victims of artificial scarcity.  And the state, desperate to reduce unemployment, must then find ways to grow the economy in order to create new jobs, just so that people can survive. 

And all of us workers join in the choir: Give us growth!  We need jobs!

Scarcity creates recruits to the ideology of growth.

Even people who are concerned about ecological breakdown, which is most of us, are forced to submit to this logic: if you care about human lives, then you must call for growth.  We can deal with the environment later.

But there will be no later, because the problem of scarcity is never solved.  Whenever scarcity is about to be solved, it is always quickly produced anew.  Think about it: for 150 years, economists have predicted that “In the very near future our economy will be so productive and replete that we will all have to work no more than a few hours a day.”  But the prediction never comes true.  Because capitalism transforms even the most spectacular productivity gains not into abundance and human freedom, but into scarcity. 

It’s strange, isn’t it?  The ideology of capitalism is that it is a system that generates immense abundance (so much stuff!).  But in reality it is a system that relies on the constant production of scarcity. 

This conundrum was first noticed back in 1804, and became known as the Lauderdale Paradox.  Lauderdale pointed out that the only way to increase “private riches” (basically, GDP) was to reduce what he called “public wealth”, or the commons.  To enclose things that were once free so that people have to pay in order to access them.  To illustrate, he noted that colonialists would often even burn down trees that produced nuts and fruits so that local inhabitants wouldn’t be able to live off of the natural abundance of the earth, but would be forced to work for wages in order to feed themselves. 

We see this happening today in the endless waves of privatization that have been unleashed all over the world.  Education?  Healthcare?  Parks?  Swimming pools?  Social Security?  Water?  All social goods must be privatized – they must be made scarce.  People must be made to pay in order to access them.  And in order to pay, they will of course have to work, competing with each other in the labour market to be ever-more productive.

This logic reaches its apogee in the contemporary vision of austerity.  What is austerity, really?  It is a desperate attempt to re-start the engines of growth by slashing public investment in social goods and social protections, chopping away at what remains of the commons so that people are cast once again at the mercy of starvation, forced to increase their productivity if they want to survive.   The point of austerity is to create scarcity.  Suffering - indeed, poverty - must be induced for the sake of more growth.

It doesn’t have to be this way.  We can call a halt to the madness – throw a wrench in the juggernaut.  By de-enclosing social goods and restoring the commons, we can ensure that people are able to access the things that they need to live a good life without having to generate piles of income in order to do so, and without feeding the never-ending growth machine.  “Private riches” may shrink, as Lauderdale pointed out, but public wealth will increase.

In this sense, degrowth is the very opposite of austerity.  While austerity calls for scarcity in order to generate growth, degrowth calls for abundance in order to render growth unnecessary.

Degrowth, at its core, is a demand for radical abundance.


The case for reparations


Yesterday I stood in the hall of the Durham Union to argue for the proposition: “This house believes Britain owes reparations to its former colonies”. The following is the text of my ten-minute speech, followed by five brief reflections on the opposition’s arguments.

I still remember the first time I taught colonial history at the LSE.

LSE students are among Britain’s finest: they graduate from top schools, perform brilliantly on their A-level exams. And yet when I gave a lecture about the Indian famines of the late 19th century to a classroom full of third years, I was met with blank stares. As a direct result of British policy, 30 million Indians died needlessly of hunger between 1875 and 1902.  Laid head to foot, their corpses would stretch the length of England, from Dover to the Scottish borders, 85 times over.

No one in the classroom had ever heard of it.

And this tragedy was not an isolated incident. There were many more.  The Great Bengal Famine in 1770 killed 10 million people, one third of the region’s population. Here too historians blame British policy: brutal tax collection, enclosure of forests and waterways, forcing farmers to rip up their rice to plant crops for export. Similar policies imposed over the following decades claimed the lives of another 22 million people, all while record agricultural exports were being siphoned away to London. 

Historian Mike Davis has famously likened these famines to the holocaust. And yet the corpses that the British left strewn across India have been almost entirely forgotten. Tell me: would we ever tolerate such amnesia when it comes to the crimes of Nazi Germany? Never. Any such ignorance is rebuked, and rightly so. Yet when it comes to the crimes of the British Empire, an insidious form of holocaust denialism vipers right through our culture.

While he was Prime Minister, David Cameron went on record saying: “There’s an enormous amount to be proud of in what the British Empire did.”  Why?  Because the British brought “development” and whatnot.  Or so the argument goes.

But there isn’t a shred of evidence to back this up. During the entire 200-year history of British rule in India, there was zero increase in per capita income. In fact, during the last half of the 19th century—the heyday of British intervention—income in India collapsed by half. The average life expectancy of Indians dropped by a fifth from 1870 to 1920.   

India wasn’t “developed” under British rule – it was de-developed.  And not just in terms of social welfare.  British policy was designed to destroy India’s domestic industries by imposing asymmetrical tariffs, by dismantling the institutions that trained up producers, and in some cases even by maiming skilled artisans – all to create captive markets for British goods.  During the course of British rule, India’s share of the global economy shrank from 27% to 3%.

Yet despite this litany of violence, a recent YouGov survey found that 80% of Britons do not regret colonialism. 44% are actively proud of it.  How is this possible? I hear it all the time: pundits and politicians arguing that colonialism brought democracy, property rights, rule of law, railroads…

What a strange twist of reason this requires.

Democracy? British rule was dictatorship!  Africans and Asians struggled and bled for the right to vote in their own countries.  Property rights? The whole point of colonialism was dispossession—securing the rights of the colonizers to the property of the colonized: land, gold, diamonds, taxes, even the bodies of the colonized themselves. Rule of law? The object of colonial legal codes was to deny equal rights to colonial subjects.  And India’s railroads were used to pump resources—grain and timber—out of the hinterlands to the ports for British use.

Even if we accept that useful things were shared during colonialism – universities, for instance – that is not the same as saying they were a benefit of colonization. Colonialism is not a necessary vector for the transfer of knowledge or technology. Britain has long enjoyed the Arabic numeral system, algorithms, and even algebra itself, without ever submitting to Arab invasion. It takes a warped mind to believe that the best way to share ideas with other humans is to colonize them.

But we have barely scratched the surface.  Let’s not forget that Britain’s first forays into colonialism were linked to the consummate expression of barbarism: the Atlantic slave trade. 300 years of state-sponsored human trafficking. 14 million souls shipped across the sea. Countless bodies shackled to British plantations and churned into the sugar and cotton that fueled Britain’s industrial rise. 

And yet in the book I was made to read to become a British citizen, this long, dark history was reduced to three sentences. You can visit Glasgow, Bristol, London, Liverpool and every other British city that grew rich on the slave trade without encountering a single memorial.  Denialism vipers through our culture.

We could spend all night listing off Britain’s crimes against humanity.  But that is not the point I want to make. This is not just about a list of crimes. The denialism runs much deeper than that. 

You see, we have this story we tell ourselves, that Britain’s crowning moment of greatness, the Industrial Revolution, emerged sui generis from within Britain’s borders – robust institutions, good markets, advanced science and technology.  This is the story that’s written into our children’s textbooks: we must all be proud of Mr. James Watt and his inventions. 

But scholars remind us that there is much more to the story than we are normally told.  From historians like Sven Beckert, Kenneth Pomeranz, Ellen Wood, Parthasarathi and Karl Polanyi, the evidence is clear: the Industrial Revolution was built on state violence, slavery and colonization. Britain’s economic rise depended on cotton, sown and harvested by enslaved Africans on land expropriated from indigenous Americans; depended on the theft of agricultural products from Indian farmers; and depended on the forced de-industrialization of Asia.

But, I can hear you say, that was all in the past.  It ended more than 70 years ago. Things are different now. 

Are they?  Only if you’re willing to forget what happened afterward.  Only if you’re willing to forget the British-backed coup that deposed Mohammed Mossadegh, the first elected leader of Iran, when he tried to regain control of the country’s oil reserves from Britain.  Only if you’re willing to forget the British-backed coup that deposed Kwame Nkrumah, the first elected leader of Ghana, when he sought to reduce his country’s dependence on British imports.  Only if you’re willing to forget the structural adjustment programs that Britain helped impose across its former colonies in the 80s and 90s, one after the other, reversing the progressive policies of the postcolonial era to restore British access to cheap labour, raw materials and markets, devastating the livelihoods of ordinary people in the process, adding hundreds of millions to the ranks of the poor.

But we’ve forgotten all that.  And we’ve forgotten much more besides, including things that are happening right now.  We’ve forgotten that the City of London operates at the center of the world’s tax haven network, which helps facilitate illicit financial flows that cost the South more than $1 trillion per year.  Colonialism may be over, but the system that it created – a system designed to siphon wealth from South to North – remains very much in place.  The word “reparations” suggests that the problem is in the past.  It is not. 

Frantz Fanon had it right when he wrote, in Wretched of the Earth, that “Colonialism and imperialism have not settled their debt to us once they have withdrawn from our territories. The wealth of the imperialist nations is also our wealth. Europe is literally the creation of the Third World.”

So go ahead – I challenge you: chalk up the billions of hours that enslaved Africans worked on British plantations, pay it at a living wage.  Tally up compensation for the 60 million souls sacrificed to famine for the sake of British surplus.  Boost it all by 200 years of compound interest, and add that to the trillions lost during structural adjustment and the trillions more in stolen cash that flows through Guildhall.  Try it.  The numbers begin to swell.  They rise like a chorus of voices from the forgotten corners of our past. They march like an army of ghosts who demand a reckoning. 

And then it strikes you…. Then it strikes you that there is not enough money in all of Britain to compensate for these injustices.  And you realize, that if Britain paid reparations – real, honest, courageous reparations – there would be nothing left.  Britain would not exist.

And that is exactly what people find so terrifying about the question of reparations.  It’s not that they fear the actual prospect of paying.  It is that even just thinking about what is owed reveals the hard truth: that what is owed, is everything. 

But really, this is not about the money.  This is about something far more important… this is about the story.  The real reparations we need are narrative reparations.  So this is what I ask of this house tonight – that we demand, at minimum, repair of the broken story we tell ourselves: an end to the denial that has festered among us for too long.  Let us demand the truth be told in our schools and in our town halls. Let us demand that alongside every statue celebrating Victoria and Churchill there be memorials to their victims. Let us demand that the real story of Britain’s rise be worn like poppies upon our breasts.

As Aime Cesaire put it, “A nation which colonizes, a civilization which justifies colonization, is a sick civilization, a civilization that is morally diseased.”  So what is at stake here, in the end, is not only justice for the dispossessed, but Britain’s own healing.  Britain’s own humanity.  To repair this broken story will cost you nothing, and yet you have everything to gain.

Photo taken in 1876-1879, India.

Photo taken in 1876-1879, India.

 * * *

My opponent, John Hemmings, responded with a number of common arguments that are worth exploring.  I paraphrase and reflect on five of them here.

1. “It’s true, Britain’s imperial past was riddled with horrible violence.  But there is a lot of violence in world history.  Mao’s famines.  Stalin’s gulags.  Why put special blame on Britain?”

In a way, this exactly proves my point.  We all know about the crimes of Mao and Stalin – in fact, they feature routinely in our media narratives.  They are wielded as proof that totalitarian communist regimes are horrible and destructive – in stark contrast to the supposedly liberal capitalism promoted around the world by a supposedly benevolent Britain.  And it’s true, totalitarian communism was disastrous.  But that’s no reason to pretend that the history of capitalism wasn’t itself brutally violent: from enclosure to the slave trade to colonization to famine – why is our narrative about Western capitalism so routinely sanitized of these core elements?  That is what we need to repair.

2. “There were lots of empires in world history: the Mongols, Rome, Japan and so on.  If Britain must pay reparations, then we should demand reparations from all historical empires, and that is absurd.”

You certainly won’t find a defense of these past empires on my lips.  I am a staunch anti-imperialist, and always will be.  Give me a chance to broaden my argument, to critique empire itself, and I will gladly do so.  But two points.  First, the proposition in question has to do with Britain – that is what’s under debate.  So this is a red herring.  Second, the Mongols did not design a global economic system that remains in place today.  Britain did – and this is precisely the core of my argument: that there is a fundamental continuity between the international economic system that was consolidated from 1600 to 1950, and the one that exists today. 

There are some obvious signs of this.  Who controls the World Bank, the IMF and the WTO, the three key institutions that govern the rules of the global economy? Voting power in the WB and IMF is monopolized by a small handful of rich nations: the US, Britain, France, Germany, Japan.  Meanwhile the global South, which has some 85% of the world’s population, has less than 50% of the vote.  In other words, even if the vast majority of the world voted to change WB and IMF policy, they would not be able to do so. 

What about the WTO?  Bargaining power in the WTO is determined by market size, so economies like Britain virtually always get their way.  In other words, the inequalities that were generated during the colonial era now structure who has power in the global economy.  Inequality begets inequality.  This is hardly surprising.  Remember: the Bretton Woods institutions were founded in 1944, before the end of colonialism.  That’s why colonies like India were integrated into the system on profoundly unequal terms.  Indeed, that was the whole point.

3. “Britain cannot be blamed for the continued suffering of the South.  Colonialism is over.  If poor countries remain poor, it is their own fault.”

For this argument to work, you need to somehow demonstrate that (a) the international economic system that was consolidated from 1600 to 1950, which generated such immense inequality between colonizers and colonies, is now gone and has been replaced by an entirely new one; and (b) that the global economy is now fundamentally fair, such that poor countries face no structural barriers to success, external to their own domestic affairs.  The evidence against this assumption is tremendous.  See point 2, for a start. But there is more…

The claim that corruption is a major cause of continued poverty in the South is a common one.  John invokes the Corruption Perceptions Index that is published by Transparency International each year, which shows the global South smeared in the deep red that depicts high levels of corruption, while Britain and other rich economies enjoy the bright yellow that suggests no corruption at all.

Let’s think about this more carefully.  Is corruption a problem in the South?  Definitely!  But two points.  First, many of the South’s most corrupt regimes were installed by Western powers, quite often after deposing democratically elected leaders: Pinochet, Mobutu, Idi Amin, the Shah of Iran, a number of military juntas across SS Africa and Latin America… and then France’s massively corrupt Francafrique strategy to hand-pick the presidents of Francophone Africa in the post-independence era in order to guarantee continued access to the region’s resources.

Tell me, which is more corrupt?  The petty dictatorship, or the superpower that installed it?

Of course, this doesn’t explain all corruption – far from it!  And it’s true, corruption costs the South a tremendous amount of money: some $60 billion per year, according to the World Bank.  But compare those losses to the losses sustained by the South at the hands of corporate tax evasion and illicit financial flows – some $1 trillion per year, according to Global Financial Integrity.  And this system is facilitated by a shadowy network of tax havens and secrecy jurisdictions that is almost entirely controlled by rich nations, with about half of it controlled by the City of London.  If this isn’t corruption on a grand scale, I don’t know what is.

So why does Britain suffer no accusations of corruption by Transparency International? Because we don’t perceive Britain as corrupt.  It’s not part of our story.  That’s why our story – as I have been at pains to point out – needs to be fixed. (Sources here).  

4. “We need to be nuanced about the legacy of colonialism.  The British built universities, for instance, which to this day remain paragons of excellence in the South.  There were good things that came out of colonization.”

Again, colonization is not a necessary vector for the transfer of knowledge and infrastructure.  It is obscene to believe otherwise. One can build universities without colonizing other countries – indeed, it is done regularly today.  But more importantly, the idea that there was some kind of “net good” that came out of colonialism is deeply disturbing.  Even if there was some kind of empirical evidence for this, it is a chilling calculus. As if erecting universities somehow justifies 200 years of violent dispossession; as if the Victoria Memorial stacks up against 60 million corpses. 

Consider this. As Aime Cesaire has argued, the logic of colonization was fundamentally similar to that of Nazism: an expansionist project built on racial hierarchies.  It is telling that, in public discourse, one can be “nuanced” about the legacy of colonialism but not about the legacy of Nazism. It is impossible to imagine a British politician or pundit arguing that there were some good things that came out of Nazism. Even if there were, we would never use that to soften our horror at Nazi violence. Why the double standard?

There is another important point to be made here. Even if there was a kind of “net good” that came out of colonialism, that is not a defense that would be admissible in any court of law. Imagine if we were trying a man for murdering one of his children, and his defense was that he was good to his family most of the time, fed and clothed them, and even sometimes bought them nice things. Such a defense would obviously be absurd. Indeed, even if the man had treated his family like royalty, this clearly would not compensate for the fact that he murdered his child. We would never say of such a man, “Well, overall he was a good person, so let us leave him alone.”

Only a jury committed to preserving the absolute rights of patriarchy would ever acquit such a man on these grounds. So too, only those who on some level presuppose European supremacy would ever acquit Britain on the grounds of some kind of “net good” argument.

5. Someone in the audience argued: “Britain already gives a tremendous amount of aid to poor nations, most of which are former colonies.  So reparations are, in effect, already being paid. Indeed, isn’t this kind of development assistance vastly better than simply handing out reparations? Aren’t there better ways we can help?”

The narrative of aid is precisely the opposite of the narrative I have called for.  The aid narrative goes like this: Britain became rich because of its own brilliance and hard work and good institutions, and now reaches out across the chasm to give generously of its surplus to poor countries, helping them up the development ladder.  This story presupposes a fundamental disjuncture between the wealth of rich nations and the poverty of poor ones, as if the two have nothing at all to do with one another, either historically or today.

Nothing could be further from the truth.

In reality, the aid that the North gives to the South is vastly outstripped by financial resources that flow the other direction, in the form of interest on external debt, profit repatriation, illicit financial flows and so on.  In fact, for every dollar of aid that the North gives to the South, the South loses up to $24 in net outflows because of how the global economy is structured.  The South is a net creditor to the North. Poor countries are effectively developing rich countries, not the other way around.

The aid narrative obscures this reality.  It makes the takers in the system seem like givers, and grants them a kind of moral high ground.  It prevents us from understanding how the global economy actually works, and directs our attention away from the real root causes of poverty and inequality.  That is precisely the illusion that we need to correct.  We need a more honest story of how our world came to be as divided as it is today, and why that divide persists.

This brings me to a final point. If the question is how Britain can best help poor countries, the answer is simple: by working to make the global economy fundamentally fairer for the world’s majority. Democratize the World Bank and the IMF and the WTO, put an end to structural adjustment conditions on finance, close down the tax havens, roll out a global minimum wage. Once again, the concept of reparations assumes that the injustice is in the past. It is not. It persists today, in the form of a profoundly inequitable and undemocratic global economy. Any rational call for reparations must begin with a demand for justice now.

*For a more complete articulation of all of the points above, see The Divide


Soothing Noah Smith’s fears about a post-growth world


Last week Foreign Policy published an article I wrote titled “Why growth can’t be green.”  It stirred a lively online discussion – and of course attracted dissenters.  Among them was one Noah Smith, who penned a critical op-ed in Bloomberg.  You can read it here

I wrote to Noah and asked whether he would let me respond on the same platform, where he contributes a regular column.  To my delight, he agreed.  So I pitched to his editor, copying Noah.  But I received no response.  Perhaps he’s less interested in the debate than he initially let on.  Poor form, by my lights – but oh well.  Here are some of the points I would have made.

1. It’s about resource use, not energy

The main problem with Noah’s piece is that the whole thing is based on either awkward confusion or intentional sleight of hand.

My argument in FP was that it is impossible to achieve absolute decoupling of resource use from GDP on a global scale, even with rapid efficiency gains and aggressive taxes on resource extraction.  This is the conclusion reached by literally every existing study that has been conducted on the matter (you can follow links to the original research here).  The reason is simple: the rate of decoupling is outstripped by the normal rate of GDP growth, even in high-efficiency scenarios.  To make matters worse, there are physical limits to resource efficiency, and as we approach them the rate of improvement slows down, giving yet more force to the scale effect of GDP growth.

In an era in which we are already dramatically overshooting the planetary boundary on material footprint, this means that aggregate global economic growth cannot continue if we want to avoid chewing through the web of life on which our civilization depends.  

But Noah is not bothered by such evidence.  In fact, he doesn’t speak to even a single shred of my actual argument (making me wonder a bit about Bloomberg’s editorial standards; I’ve never met an editor who would let me get away with something so bizarre).  Instead, he says: “Don’t worry!  We can continue growing forever because of renewable energy!”

There’s no question that we are making rapid gains toward renewable energy.  Unlike resource use, GDP can (thankfully) be dramatically decoupled from carbon emissions.  But this solves only one dimension of our ecological poly-crisis.  Even if we magically switched to a completely clean and renewable energy system tomorrow, we would be no closer to reversing our overshoot of all the other critical planetary boundaries: biodiversity collapse, chemical loading, deforestation, etc. 

Think about it. What are we going to do with all that clean energy?  The same things we’re doing with fossil fuels: raze forests, intensify agricultural extraction, produce mountains of stuff, send waste to landfill – and do all of this at an ever-increasing rate, because our economic system is programmed to require endless expansion. 

This paradox is brilliantly captured by Joan Wong’s illustration for the FP: a solar-powered civilization that has nonetheless laid waste to the planet. 

2. This doesn’t mean that poor countries can’t grow

Noah is concerned that if we were to stop global growth, poor countries would be “stuck” at their present level of poverty.  But I have never said that poor countries shouldn’t grow – nor has anyone in this field of study (which Noah would know had he read any of the relevant literature).  I have simply said that we can’t continue with aggregate global growth. What we need, then, is a fairer distribution of global income, with much more of it going to poor countries (and poor people within rich countries).  If we share what we already have more fairly, we won’t have to plunder the earth for more. 

But then Noah switches tack, acknowledging this point but saying that a fairer distribution of global income is politically and logistically impossible. 

Logistically impossible?  Hardly.  I can think of lots of ways to do it: by introducing a global minimum wage, for instance, or by democratizing the institutions of global economic governance, or by allowing poor countries to use subsidies and tariffs without fear of brutal retaliation, or by cancelling unpayable debts, or by rolling out a world basic income.  I discuss all of this and much more in The Divide, along with practical ideas for how to make it happen.

Is it politically impossible?  Well, it would certainly require a struggle.  But it’s far less impossible than Noah’s preferred alternative, namely, to transcend the laws of physics.

3. So don’t worry about the fertility thing

Noah is concerned about the consequences of post-growth economics for reproduction rates. “Once countries pass per-capita gross domestic product of $10,000,” he writes, “fertility rates rapidly drop to or below the replacement rate of 2.1 children per woman. Halting growth now would leave most African countries trapped well below that magic level, meaning their population growth — and thus, the world’s population growth — would continue without limit.”

First, population can’t grow without limit, for the same reason that GDP can’t.  It’s silly to imagine otherwise.  Still, I take the point. But see #2 above: no one says that poor countries can’t grow their economies.  Yet more importantly, the real cause of lower fertility isn’t higher GDP but rather better girls’ education.  GDP is a confounding factor.  In Cuba – which has a high education index and strong gender parity – the fertility rate is only 1.6 births per woman.  GDP per capita is $7,000.  Saudi Arabia’s fertility rate is much higher, at 2.7 births per woman, despite a per capita GDP that is three times that of Cuba, and double the “magic” threshold of $10,000. 

This brings me to a crucial point.  While poor countries may need some GDP growth, that should never – for any nation, rich or poor – be the objective as such.  The objective should be to improve human well-being: better health, better education, better housing, happiness, etc.  The strategy should be to target these things directly, without blindly hoping that GDP growth will somehow magically deliver the results we want (usually it does not: the vast majority of new income from growth goes to the rich).  To the extent that achieving these goals entails some growth, so be it.  But that’s quite different from saying that GDP needs to grow forever. 

4. Switching to services doesn’t reduce resource use

Noah seems to believe that shifting the economy from goods to services will help reduce the material intensity of GDP.  Happily, this relationship is already accounted for in the models I cited.  To be fair, though, it’s easy to miss if you’re not reading closely. Plus, it seems like a reasonable assumption – and it frequently appears in green-growth rhetoric.

Unfortunately, the data do not support the theory.  As a proportion of world GDP, services have grown from 66% in 2002 to 68% in 2013.  But during this same period global material use has continued to rise, and indeed its rate of growth has accelerated to the point of outstripping the rate of global GDP growth. The same is true of rich nations as a group.  Services represent more than 74% of GDP in rich nations (a share that has grown rapidly since the 1990s), but material footprint growth is nonetheless outpacing GDP growth. 

Why is this?  First, because services require resource-intensive inputs.  Consider the airline industry, or the tourism industry.  These are services, but of course rely on a massive material base (airports, resorts, roads, buses, etc.).  Second, the income that people earn from selling services gets used to buy resource-intensive consumer goods.  So you might earn your salary as a banker (or an op-ed columnist) but spend the money buying cars and yachts and televisions.  Third, it may be that the resource intensity of primary and secondary sectors has increased to the point of outstripping any gains made by switching to services.

Either way, there is no evidence that relying on a switch to services, in and of itself, reduces the material throughput of the global economy.

5. We can’t decarbonize fast enough for 2C

Let me conclude by circling back to Noah’s argument about energy.  Noah says “Since about 1990, emissions from the U.S. and EU have fallen, while emissions from developing countries, especially China and India, have exploded.”  First, a note of caution. Noah relies here on territorial emissions, but what we really need to look at is consumption-based emissions.  The US and EU have outsourced much of the production of the goods they consume – and therefore their emissions – to the global South, particularly to China.  That needs to be accounted for.

Furthermore, it just doesn’t make sense to compare China and the US/EU in terms of total emissions.  Emissions need to be judged on a per capita basis.  By that metric, China’s emissions are significantly less than emissions from rich countries. 

But here is the more important point. While we obviously need to throw everything we have into shifting to a renewable energy system, it is unlikely that we will be able to do this fast enough to keep us from blowing the carbon budget for 2C (which, on our present trajectory, is only 19 years away). 

Consider this.  Rich nations need to cut their emissions by more than 10% per year, starting now.  If rich nations continue growing at the present average rate of 1.86% per year, that means decarbonization needs to happen at a rate of 13.2% per year.  For perspective, this is seven times faster than the historic rate of decarbonization in rich nations (which has, incidentally, been slowing in recent decades), and exceeds the decarbonization rate implied by the average G20 Nationally Determined Contributions under the Paris Agreement by a factor of four.

There is no existing evidence that suggests that improvements in technologically efficiency alone will allow us to decarbonize fast enough to stay within 2C.  Why?  Because the scale effect of growth is wiping out most of our gains. We need all the technological innovation we can get - but it will only really start to work once we stop blindly marching up the ever-rising exponential curve of GDP.


Why growth can't be green


Warnings about ecological breakdown have become ubiquitous. Over the past few years, major newspapers, including the Guardian and the New York Times, have carried alarming stories on soil depletion, deforestation, and the collapse of fish stocks and insect populations. These crises are being driven by global economic growth, and its accompanying consumption, which is destroying the Earth’s biosphere and blowing past key planetary boundaries that scientists say must be respected to avoid triggering collapse.

Many policymakers have responded by pushing for what has come to be called “green growth.” All we need to do, they argue, is invest in more efficient technology and introduce the right incentives, and we’ll be able to keep growing while simultaneously reducing our impact on the natural world, which is already at an unsustainable level. In technical terms, the goal is to achieve “absolute decoupling” of GDP from the total use of natural resources, according to the U.N. definition.

It sounds like an elegant solution to an otherwise catastrophic problem. There’s just one hitch: New evidence suggests that green growth isn’t the panacea everyone has been hoping for. In fact, it isn’t even possible.

Green growth first became a buzz phrase in 2012 at the United Nations Conference on Sustainable Development in Rio de Janeiro. In the run-up to the conference, the World Bank, the Organization for Economic Cooperation and Development, and the U.N. Environment Program all produced reports promoting green growth. Today, it is a core plank of the U.N. Sustainable Development Goals.

But the promise of green growth turns out to have been based more on wishful thinking than on evidence. In the years since the Rio conference, three major empirical studies have arrived at the same rather troubling conclusion: Even under the best conditions, absolute decoupling of GDP from resource use is not possible on a global scale.

A team of scientists led by the German researcher Monika Dittrich first raised doubts in 2012. The group ran a sophisticated computer model that predicted what would happen to global resource use if economic growth continued on its current trajectory, increasing at about 2 to 3 percent per year. It found that human consumption of natural resources (including fish, livestock, forests, metals, minerals, and fossil fuels) would rise from 70 billion metric tons per year in 2012 to 180 billion metric tons per year by 2050. For reference, a sustainable level of resource use is about 50 billion metric tons per year—a boundary we breached back in 2000.

The team then reran the model to see what would happen if every nation on Earth immediately adopted best practice in efficient resource use (an extremely optimistic assumption). The results improved; resource consumption would hit only 93 billion metric tons by 2050. But that is still a lot more than we’re consuming today. Burning through all those resources could hardly be described as absolute decoupling or green growth.

In 2016, a second team of scientists tested a different premise: one in which the world’s nations all agreed to go above and beyond existing best practice. In their best-case scenario, the researchers assumed a tax that would raise the global price of carbon from $50 to $236 per metric ton and imagined technological innovations that would double the efficiency with which we use resources. The results were almost exactly the same as in Dittrich’s study. Under these conditions, if the global economy kept growing by 3 percent each year, we’d still hit about 95 billion metric tons of resource use by 2050. Bottom line: no absolute decoupling.

Finally, last year the U.N. Environment Program—once one of the main cheerleaders of green growth theory—weighed in on the debate. It tested a scenario with carbon priced at a whopping $573 per metric ton, slapped on a resource extraction tax, and assumed rapid technological innovation spurred by strong government support. The result? We hit 132 billion metric tons by 2050. This finding is worse than those of the two previous studies because the researchers accounted for the “rebound effect,” whereby improvements in resource efficiency drive down prices and cause demand to rise—thus canceling out some of the gains.

Study after study shows the same thing. Scientists are beginning to realize that there are physical limits to how efficiently we can use resources. Sure, we might be able to produce cars and iPhones and skyscrapers more efficiently, but we can’t produce them out of thin air. We might shift the economy to services such as education and yoga, but even universities and workout studios require material inputs.

Once we reach the limits of efficiency, pursuing any degree of economic growth drives resource use back up.

These problems throw the entire concept of green growth into doubt and necessitate some radical rethinking. Remember that each of the three studies used highly optimistic assumptions. We are nowhere near imposing a global carbon tax today, much less one of nearly $600 per metric ton, and resource efficiency is currently getting worse, not better. Yet the studies suggest that even if we do everything right, decoupling economic growth with resource use will remain elusive and our environmental problems will continue to worsen.

Preventing that outcome will require a whole new paradigm. High taxes and technological innovation will help, but they’re not going to be enough. The only realistic shot humanity has at averting ecological collapse is to impose hard caps on resource use, as the economist Daniel O’Neill recently proposed. Such caps, enforced by national governments or by international treaties, could ensure that we do not extract more from the land and the seas than the Earth can safely regenerate. We could also ditch GDP as an indicator of economic success and adopt a more balanced measure like the genuine progress indicator (GPI), which accounts for pollution and natural asset depletion. Using GPI would help us maximize socially good outcomes while minimizing ecologically bad ones.

But there’s no escaping the obvious conclusion. Ultimately, bringing our civilization back within planetary boundaries is going to require that we liberate ourselves from our dependence on economic growth—starting with rich nations. This might sound scarier than it really is. Ending growth doesn’t mean shutting down economic activity—it simply means that next year we can’t produce and consume more than we are doing this year. It might also mean shrinking certain sectors that are particularly damaging to our ecology and that are unnecessary for human flourishing, such as advertising, commuting, and single-use products.

But ending growth doesn’t mean that living standards need to take a hit. Our planet provides more than enough for all of us; the problem is that its resources are not equally distributed. We can improve people’s lives right now simply by sharing what we already have more fairly, rather than plundering the Earth for more. Maybe this means better public services. Maybe it means basic income. Maybe it means a shorter working week that allows us to scale down production while still delivering full employment. Policies such as these—and countless others—will be crucial to not only surviving the 21st century but also flourishing in it.

*This article and image originally appeared in Foreign Policy magazine in 2018.


The moral egregiousness of poverty is worse than ever before in history


Last week Twitter erupted in a heated debate about global poverty.  The question was whether it’s better to measure our progress against poverty (or lack thereof) by looking at the total number of people in poverty or by looking at poverty as a proportion of the world’s population. 

Over the past few decades, the proportion of people living under $7.40/day, which is the minimum necessary to achieve basic nutrition and normal life expectancy, has fallen from 71.8% in 1990 to 58.1% in 2013.  Not a great improvement, but certainly some progress. But if we look at it in terms of absolute numbers, a very different story emerges.  The number of people living under $7.40/day has grown from 3.78 billion in 1990 to 4.16 billion in 2013.  With numbers like that on the table, it’s hard to escape the conclusion that there’s something wrong with the progress narrative.

As the debate continues, it’s clear that there is no single simple narrative we can tell about progress against global poverty.  I have argued that absolute numbers matter because that's the metric that the world’s governments agreed to focus on when they first pledged to tackle poverty in the Rome Declaration.  But both measures are analytically important; they tell us different things about the world. 

There is a third approach, however, proposed by Yale philosopher Thomas Pogge.  Pogge argues that the morally relevant metric of progress against poverty is neither absolute numbers nor proportions, but rather the extent of global poverty compared to our capacity to end it.  By that metric, he says, we are doing worse than at any time in history.

Is he right?  And, if so, is there some way to demonstrate this with hard data?

The first step is to measure our relative capacity to end poverty.   One conceptually easy way is to determine the cost of lifting everyone above the poverty line (the "poverty gap" as calculated by the World Bank) as a percentage of total global GDP (in constant 2011$ PPP).  Then we can compare that metric against the actual extent of global poverty (using proportions, to be generous to my critics), and chart the change in this relationship over time.

So if the poverty rate stays the same while our capacity to end it doubles, then the moral egregiousness of poverty is twice as bad as it used to be.  And if the poverty rate improves by a factor of two while our capacity to end it stays the same, then the moral egregiousness of poverty is half as bad.

Let’s flesh this out with some real-world figures.  In 1990, it would have cost 10.5% of world GDP to lift everyone above the poverty line.  In 2013, it would have cost only 3.3%.  Our capacity to end poverty has improved by a factor of 3.18.  Meanwhile, the poverty rate has improved only by a factor of 1.23.  This means that the moral egregiousness of poverty is 2.58 times worse than it was in 1990. 

Pogge is right: by this metric, poverty is worse now than ever before.  Our world is replete with unprecedented riches, and yet we cannot ensure that everyone has a decent basic share of it.  Morally, we have regressed as a civilization.

But this is a crude way to think about our capacity to end poverty.  We shouldn’t be looking at the cost of ending poverty as a percentage of total world income, but rather as a percentage of the income of all the people who are not poor; say, those who live on more than double the poverty line.  In 1990, it would have cost 12.9% of their total income to end poverty.  In 2013, it would have cost only 3.9%.  According to this measure, our capacity to end poverty has improved by a factor of 3.31. 

By this method, the moral egregiousness of poverty is 2.69 times worse than it was in 1990.  The difference between the two results is due to increasing global inequality; because the incomes of the global rich have grown more than the incomes of everyone else, the cost of ending poverty is a faster-shrinking share of their income compared to total world income.

The numbers above are all rounded off for easy reading, and so you can repeat the calculations yourself.  The graph below is based on the actual figures associated with the second method (all data is derived from the World Bank).  It gives us a visual depiction of the egregiousness of poverty since 1990. 

Screen Shot 2018-08-30 at 12.13.27 PM.png

We live in an age where more than 4 billion people – some 60% of the human population – live on less than what is required for meeting basic human needs.  This is a ringing indictment of the global economy by any standard.  But it is particularly unjust given that their suffering could be ended with only 4% of the income of the world’s richest quintile.   

Such a transfer could be made either directly, with progressive taxes on financial transactions, wealth, carbon, resource extraction etc, or – better yet – by changing the rules of the global economy to make it fairer to poor nations: democratizing the World Bank and IMF, cancelling unpayable debts, rolling out a global minimum wage, ending structural adjustment conditions on finance, etc (see Chapter 8 of The Divide for more).


*I’ll be working on refining this method further, testing different thresholds, and exploring national-level results.  If you have any suggestions, please feel free to share them either through my contact form or in the comments below. 



Technical notes: (a) The poverty data is notoriously messy, so this needs to be taken with a grain of salt.  One potential problem is that at very low levels, poverty is defined according to consumption rather than income as such, so it is a bit tricky to compare this to global GDP.  (b) In many contexts people who earn more than $14.80 per day are still very poor; obviously it would make little sense to “tax” them in order to improve the incomes of those who are even poorer.  The transfer should be borne by the rich on a progressive scale.  (c) This metric may be over-sensitive to the difference between the proportion of people living in poverty vs the poverty gap.  One can imagine a scenario where 4 billion people are only 5% under the poverty line; the proportion of people in poverty would be high but the cost of ending poverty would be very small.  This would distort the result.  One way to correct for this might be to use the poverty gap in the numerator.  By that metric the egregiousness of poverty has increased by a factor of 2.25 since 1990.


The problem with the Human Development Index in an era of ecological breakdown


If you haven’t come across the Global Footprint Network yet, check them out.   Based in Oakland, CA, they produce fantastic data on the Ecological Footprint (EF) of nations around the world.  EF is measured in units known as “global hectares” – an omnibus measure that includes resource use, waste and emissions.

The researchers at the Global Footprint Network calculate that our planet presently has enough biocapacity for each of us to consume about 1.8 global hectares per year.  Anything over this means a degree of resource consumption that the Earth cannot replenish, or waste that it cannot absorb, and contributes to ecological breakdown.  1.8 global hectares is roughly what the average person in Ghana or Guatemala consumes.   By contrast, Europeans consume 4.7 global hectares, while in the US and Canada the average person consumes about 8 – many times their fair share.

This data raises an important question.  What is the relationship between consumption (as measured by Ecological Footprint) and development?  Of course, we know that EF is tightly coupled to GDP.  But what about human development indicators?  What about well-being?  Is it possible for a nation to live within the threshold for biocapacity while at the same time having high standards of living?  Ghana and Guatemala are hardly exemplary in terms of their social indicators... are there better models out there?

The researchers at GFN have answered these questions with a fascinating chart that plots the Ecological Footprint of nations against their score in the Human Development Index (HDI).

Screen Shot 2018-07-05 at 3.58.11 PM.png

The results are striking.  They show that as HDI rises, so too does EF.  The two seem to be quite tightly coupled, such that achieving the higher levels of HDI generally means vastly outstripping biocapacity.  There are a few outliers: countries that achieve "high" HDI (above 0.7) while nonetheless remaining within biocapacity.  But all of the nations that achieve “very high” HDI (0.8) outstrip the biocapacity limit.  Depressingly, there are no nations that fit within the box for sustainable development at very high HDI, although one country – Cuba, represented in grey – comes very close.

This seems like a sensible approach, on the face of it.  And the goal, of course, is for each nation to become more efficient at converting ecological footprint into human well-being, finding ways to enhance human flourishing with minimal pressure on the planet.  But if that’s the objective, there are problems with using HDI. 

HDI is calculated as the average of three different indicators: life expectancy index, education index, and income (where 1 = GNI per capita of $75,000, on a logarithmic scale).  Of course, it makes perfect sense to compare life expectancy and education against EF.  But it does not make sense to compare income against EF.  The reason is because income, like GDP, is inextricably linked to EF.  While it is possible to achieve enormous gains in life expectancy and education with relatively little EF, it is not possible to grow average income up to $75,000 without vastly outstripping biocapacity.  Sure, we can achieve some relative decoupling of GNI from EF (with rapid technological innovation and aggressive taxes on carbon and resource extraction) but not absolute decoupling.  Income cannot go up to $75,000 while EF goes down to 1.8.  It is a physical impossibility. 

So the HDI approach is self-defeating.  As long as income counts as 33% of HDI, achieving very high HDI by definition requires growth to the point of outstripping biocapacity.  If all nations in the world were to pursue the highest HDI (which is of course presently the plan), we would “develop” ourselves into ecological collapse.

We need a better measure, one better suited for the Anthropocene.  As I see it, the income component of HDI is underjustified.  Average income does not tell us very much about well-being. There are a number of countries with relatively low income that nonetheless have high levels of human well-being.  Costa Rica, for example, has a higher life expectancy than the US and happiness indicators that rival those of Scandinavian nations.  But its average income is only $11,000, less than one-fifth that of the US.

If you take income out of HDI, then Costa Rica qualifies as having “very high” human development.  And its EF (2.8) fits well under the biocapacity line of 1961.  Many other countries are also in the very high category with even lower EF, including Serbia, Romania, Albania.  Cuba qualifies as very high, with an EF of only 1.95, extremely close to today’s biocapacity limit.  And Georgia qualifies as very high with an EF of only 1.58. 

The problem with HDI is that it is an unreformed indicator; it still has a strong element of the old GDP-focused development mindset in it, and so is not fit for purpose when it comes to pursuing truly sustainable development.  Indeed, some middle-income nations – like the ones listed above – excel at human development and yet are punished in the HDI rankings for having lower income.  Why punish them thus?  Shouldn’t we instead look at them as models to emulate, and build on, as we try to reverse ecological breakdown?

Of course, income may contribute to well-being in ways that health and education indicators cannot capture.  But there may be other indicators that we could include to get at this, such as happiness or life satisfaction.  Or, alternatively, we could put a “cap” on the income component so that anything above, say, $15,000 counts as 1, rather than requiring nations to grow to excess in order to achieve that standing. 

Because HDI is lashed to income, it works against the possibility of a shift toward a post-growth economy.

Consider this thought experiment.  Let us say that rich nations choose to follow post-growth and de-growth principles, slowing down ecologically harmful and socially unnecessary economic activity (fracking, advertising, McMansion building, SUV production, beef farming, single-use plastics, food waste, planned obsolescence and so on) in order to reduce their ecological footprint.  At the same time, they introduce pro-human policies: increasing the minimum wage and improving labour laws so that workers claim a bigger share of total income, socializing healthcare and education, controlling house prices by regulating speculation, shortening the working week and introducing a job guarantee. 

In such a scenario, average income would go down, but there would theoretically be no drop in quality of life – indeed, quality of life might even improve.  People would likely be happier because they would have to work less, freeing them to spend more time with their loved ones and to engage in useful and creative pursuits. Assuming health and education indicators stayed the same (in reality they would probably improve), HDI would fall – but this would not be an accurate indicator of what is really going on.  Indeed, it would obscure the most important part of the story.

HDI was invented in 1990 as an antidote to the GDP-based conception of development.  It was considered progressive for its time, but it is clear now that it did not go quite far enough.  Nearly 30 years on, it’s time for a better measure – one that will aid rather than hinder us in our efforts to build a more ecological model of development.


Ecomodernism and the Sacred Shibboleth


I recently wrote a post criticizing ecomodernism as “magical thinking”.  I argued that it ignores key scientific studies on the unviability of absolute decoupling in order to advance an ecologically reckless insistence on growth.  Not surprisingly, ecomodernists were not particularly happy about this.  Linus Blomqvist of the Breakthrough Institute posted a rebuttal.  It’s worth reading, because it gives a useful indication of the arguments that ecomodernists fall back on when challenged, and presents an opportunity to stress-test them.  This is an important process.

And the results are revealing.

Blomqvist does not dispute the fact that absolute decoupling of material use from GDP is impossible on a global scale.  He simply chooses to ignore this fact in favor of pointing to specific dimensions of resource use that he says are more hopeful.  Here he relies on a single example: that “land use by agriculture… has been in slight decline since the mid-1990s, even as consumption of crops and meat has increased by 60%.”  This is good news, he says, because it shows that absolute decoupling is possible after all.

Blomqvist says that he draws this conclusion from FAO data.  But unfortunately the FAO’s data don’t in fact jive with his story.  Since 1990 total land use (for cropland and grazing) has grown from 4.79 billion hectares to 4.87 billion hectares. True, during the first decade of the 21st century agricultural land use held basically steady, but it’s been rising again since 2010, having increased by 50 million hectares – roughly the size of Spain. So this is not in fact an example of absolute decoupling, and it is frankly irresponsible for Blomqvist to invoke it as such.  Relative decoupling, yes.  But that’s not good enough.

Even if land use did represent a story of absolute decoupling, we can't so easily claim, as Blomqvist does, that decoupling of this one impact means we can achieve decoupling across all key impacts.  Indeed, isolating “good news” stories risks violating the basic principle of ecology – namely, that everything is connected. 

Land use is a good case in point.  We have been able to increase agricultural yields by pumping the land full of industrial chemicals.  But at what cost?  We are dramatically overshooting the planetary boundaries for phosphorous loading and nitrogen loading, with all sorts of devastating consequences: (a) insect populations are collapsing, including pollinators, and birds are going down with them; (b) coastal waters are scarred by enormous “dead zones” from chemical runoff, which have quadrupled in size since 1950; (c) soil depletion has reached crisis levels, with scientists warning that on our present trajectory topsoils will only support another 60 years of harvests; and (d) dying soils are emitting immense plumes of greenhouse gas emissions, contributing substantially to global warming.

These are not minor problems. They are existential threats, widely recognized as such by the scientific community.  But Blomqvist dismisses this evidence as “vague appeals to ecological connectedness”.  Because, as we’re beginning to learn, in Ecomodernist Land evidence doesn’t really matter very much if it gets in the way of growth.

Now, here’s where it gets interesting.  Blomqvist agrees that the objective should be to reduce agricultural land use.  He agrees that this is ecologically important.  But he thinks that the best way to do this is to continue to intensify our extraction from the land so that we can keep growing the industrial agricultural sector – exponentially, forever.  Because whatever else, the mantra of growth must not be questioned.  It is the sacred shibboleth.

There’s a much easier and more sensible way to reduce agricultural land use: waste less food, and distribute food more fairly.  We already produce enough food for 10 billion people, but a disproportionate amount of the world’s food ends up flowing to rich countries, where much of it ends up as waste.  In the US and Europe, consumers bin up to half the food they purchase.  The UN finds that cutting global food waste by only a quarter and redirecting it to where it is needed most would eradicate global hunger in a single stroke.  (For citations see The Divide, where I develop this argument more fully).

This would allow us to simultaneously improve human well-being, making people healthier and happier and more food-secure, while at the same time reducing land use as well as reducing chemical loading.  But it would also mean that the industrial agricultural sector would shrink.  It would de-grow.  Is Blomqvist against this idea?  Against eliminating food waste and redistributing food more fairly?  I’d love to hear his answer.  Because really this is what it all comes down to.  Indeed, this is precisely the purpose of de-growth: to scale down ecologically destructive output that is not necessary for human well-being. 

Now, to Blomqvist’s next point.  He writes “There is substantial reason to doubt that reducing GDP growth in the developed world will have the environmental benefit that Hickel seemingly believes it must, given that it is in developed countries that the promising decoupling trends have emerged.”  This is a favorite line of the ecomodernists.  The argument, when you state it plainly, is that growth is the solution to ecological collapse. We need more growth – more production and more consumption, exponentially, forever – so that we can become technologically advanced enough to decouple growth from environmental impact. 

The circular reasoning here is truly astounding. Remember, in my last post I challenged Blomqvist to explain why he thinks that endless exponential growth in rich nations is a desirable objective, given that it does nothing to improve social indicators or human well-being.  His answer, bizarrely, is that it is ecologically necessary

Now, if there was even a shred of evidence that absolute decoupling was possible across all key impacts, and at sufficiently rapid rates to reverse ecological collapse, we might have a conversation.  But there is not.  Here again, Blomqvist’s position is reckless and unscientific.  There’s just no other way to put it. 

Blomqvist suggests that rich nations need to continue growing, not because it improves human lives, but because it is the only way to achieve decoupling. This is a remarkable turn of logic.  What’s happened here is that decoupling itself has become the goal.  The ecomodernists, having failed to offer compelling reasons for why growth is socially necessary, have turned their sticking point into their sole raison d’etre.  It’s like saying that we need to chop down more trees each year on an exponential curve, not because we need the wood, but simply so that we can learn how to chop down trees more efficiently. 

But this is where things get really odd.  Blomqvist says “There is substantial reason to doubt that reducing GDP growth in the developed world will have environmental benefit.”  Really?  Is this really the ecomodernist argument?  Is Blomqvist seriously proposing that there would be zero ecological benefits if rich nations consumed less?  The suggestion boggles the mind.  If GDP is tightly coupled to material use, and material use is tightly coupled to ecological impact, then if GDP goes down then ecological impact goes down.  If rich nations were to consume fewer SUVs, fewer McMansions, fewer single-use plastics, fewer commercial flights, and less beef – as de-growth proposals suggest – their GDP would go down.  Blomqvist offers not a shred of evidence that this would somehow magically not reduce ecological impact.

And then of course there is the strawman.  Blomqvist accuses me of wanting to de-grow developing countries – “a problematic political and ethical proposition, given how much these countries would benefit from higher incomes, better infrastructure, more employment”.  But I have never once called for de-growth in developing countries, so this is a non-argument.  It is not poor people who are the problem when it comes to ecological collapse.  It is rich people.  People in low-income nations consume only 2 tonnes of material stuff per person per year – way under the planetary boundary (7 tonnes).  People in rich nations, by contrast, consume a staggering 28 tonnes per person per year. 

So Blomqvist is concerned about poverty in developing countries.  Good – me too.  And that’s precisely why we should care about overconsumption in rich countries.  After all, we know that the ecological impact of the latter is disproportionately inflicted on the developing world.  Developing countries are responsible for only 30% of historical greenhouse gas emissions, and yet bear 82% of the costs of climate-change (nearly $571 billion in 2010), and suffer 98% of climate-change related deaths (400,000 in 2010). Even the World Bank is now warning that climate change is on track to cause mass famine and human displacement across the South, this century, sending global hunger and poverty rates up (once again, full citations are available in The Divide).

Here’s the real “problematic political and ethical proposition”: to assume that it’s okay for rich nations to continue growing needlessly while knowing that this is actively destroying the lives of poor people across the South. If we want to be serious about eradicating poverty in poor nations, de-growth in rich nations is going to have to be part of the equation.