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Global Poverty Decline Denialism

An anti-market ideologue tortures the data at The Guardian.

BillGatesDavos2018DENIS BALIBOUSE/REUTERS/NewscomSome gloomsters perversely refuse to acknowledge when a glass is even half empty, especially when doing so cuts against their ideological sensitivities. One ploy is to pour the data into a bigger glass and hope that no one notices. London School of Economics anthropologist Jason Hickel has given us a near-perfect example of this sort of sleight-of-hand in Guardian column headlined "Bill Gates says poverty is decreasing. He couldn't be more wrong."

At this month's meeting of the World Economic Forum in Davis, Gates cited data that show the proportion of people living in extreme poverty declining from 94 percent in 1820 to only 10 percent today. "The claim is simple and compelling," asserts Hickel. "And it's completely wrong."

Actually, it's Hickel who gets it entirely wrong.

Gates' alleged offense is to have shown a slide devised by the folks at the invaluable Our World in Data project. As you can see, it tracks six positive economic and social trends over the past 200 years:

World100TrendsOur World in Data

Hickel mischaracterizes that first chart as a count of "people living in poverty." Then he complains that the cutoff—an income equivalent to $1.90 per person per day—is "obscenely low." But absolutely nobody is claiming that living on $1.90 a day is a picnic. The condition being measured here isn't poverty but extreme poverty, as defined by the World Bank. And that has indeed been declining steeply over the past four decades.

Hickel claims that there are a number of problems with Gates' graph. "First of all, real data on poverty has only been collected since 1981," he argues. "Anything before that is extremely sketchy, and to go back as far as 1820 is meaningless." As we'll see, that's also wrong, but for now let's follow Hickel's lead and look at that more recent period.

So what do the "real data" on poverty tell us? Starting with that $1.90-per-day measurement, the level of extreme poverty fell from 42.2 percent of the world's population in 1981 to 8.6 percent in 2018. In 1981, 1.9 billion people lived on less than $1.90 per day; in 2018, the number was around 660 million.

Don't like that metric? The World Bank has adopted two additional poverty threshold measures at $3.20 and $5.50 per day per person. They too are falling:

WorldBankPovertyTrendsWorld Bank

But Hickel doesn't bother to tell his readers what the global income data say about those trends. Instead he insists on his own threshold of $7.40 per person per day. "We see that the number of people living under this line has increased dramatically since measurements began in 1981, reaching some 4.2 billion people today," he observes.

Charitably interpreted, Hickel has succumbed to judgment creep. The Harvard psychologist Daniel Gilbert and his colleagues have argued, in a 2018 study published in Science, we are misled about the state of the world because we have a tendency to continually raise our threshold for success as we make progress. "Solving problems causes us to expand our definitions of them," they explain. "When problems become rare, we count more things as problems. Our studies suggest that when the world gets better, we become harsher critics of it, and this can cause us to mistakenly conclude that it hasn't actually gotten better at all. Progress, it seems, tends to mask itself."

In 1981, 42.2, 57.1, and 66.4 percent of the world's population fell below the $1.90, $3.20, and $5.50 thresholds respectively. By 2015, those ratios had dropped to 10.0, 26.3, and 46.0 percent. Even though the world population increased from 4.5 to 7.3 billion from 1981 to 2015, the absolute number of people living on less than $5.50 a day peaked at around 4 billion in 1999 and fell to 3.4 billion in 2015. If current rising income trends continue, the number of people living on less than $7.40 per day will soon start to drop too. At which point Hickel will again have to shift his goalposts.

And yes, the absolute number of people living under Hickel's threshold has increased. But that's just because the world's population has gone up. The percentage of people in that category has been falling.

Meanwhile, using slightly different data, researchers associated with the World Data Lab and the Brookings Institution reported in September 2018 that "just over 50 percent of the world's population, or some 3.8 billion people, live in households with enough discretionary expenditure to be considered 'middle class' or 'rich.' About the same number of people are living in households that are poor or vulnerable to poverty." These researchers broadly define the "middle class" to cover households spending $11 to $110 per day per person, in 2011 purchasing power parity. (Purchasing power parity is when the price of identical goods and services are equal in one country and another country when factoring in the exchange rate.)

BrookingsMiddleClassWorld Data Lab

Hickel is also wrong when he claims that trying to calculate extreme poverty rates as far back as 1820 is "meaningless." He asserts that the folks at Our World in Data are inappropriately citing a 2002 study that was focused chiefly on inequality in the distribution of world GDP. But determining inequality ratios requires that you figure out the spread of incomes that people earned. In this case, the researchers used the World Bank's extreme poverty threshold, measured as living on less than $1 per day in 1985 dollars, and reported that it "fell from 84 percent of the world population in 1820 to 24 percent in 1992." Measured as living on less than $2 per day in 1985 dollars, they calculated a 94 percent poverty rate in 1820.

"World economic growth, though strongly inegalitarian, contributed to a steady decline in the headcount measure of poverty throughout the period under analysis," the researchers report. "Over the 172 years considered here, the mean income of world inhabitants increased by a factor of 7.6. The mean income of the bottom 20 percent increased only by a factor of slightly more than 3, that of the bottom 60 percent by about 4, and that of the top decile by almost 10." In other words, as a global average, the rich got richer faster than the poorest folk did, but the circumstances of both improved significantly. The same dynamic is still at work today, and that's what really annoys Hickel.

Why did Hickel feel the need to deny that plain facts about these positive global trends? Largely because he wants to claim even if global poverty as measured by mere monetary income has been declining, that actually implicates pervasive Western oppression. What these data on improving incomes really "reveal is that the world went from a situation where most of humanity had no need of money at all to one where today most of humanity struggles to survive on extremely small amounts of money," he claims. "Prior to colonisation, most people lived in subsistence economies where they enjoyed access to abundant commons—land, water, forests, livestock and robust systems of sharing and reciprocity. They had little if any money, but then they didn't need it in order to live well—so it makes little sense to claim that they were poor."

Not to complicate matters too much, but most people encountered by colonizers lived in hierarchical, largely agricultural societies—empires, kingdoms, etc.—and not in the egalitarian commons of Hickel's imagination. But some groups, such as the aborigines in Australia and the Kung! in Africa, remained more or less pure hunter-gatherers. It's not a good idea to romanticize their lives: A 2013 study aggregating mortality data for several groups of hunter-gatherers reports an average infant mortality rate (defined as death before the child's first birthday) of 27 percent and a child mortality rate (death before the 15th birthday) of 49 percent. The Our World in Data chart cited by Gates notes that the global child mortality rate (here defined as death before age 5) declined from 43 percent in 1800 to 4.3 percent now. Similarly, a 2007 review article of life trajectories of various subsistence society groups found that "on average 57 percent, 64 percent, and 67 percent of children born survive to age 15 years among hunter-gatherers, forager-horticulturalists, and acculturated hunter-gatherers." (The researchers define acculturated hunter-gatherers as groups that have either recently started horticulture and/or have been exposed to medicines, markets, and other modern amenities.)

Hickel does have a grain of a point here: If a society meets a substantial share of people's needs outside the monetary economy, income statistics aren't the best way to measure their well-being. But you can still compare life expectancy in those communities to life expectancy elsewhere. The 2007 review article finds that "among traditional hunter-gatherers, the average life expectancy at birth varies from 21 to 37 years, the proportion surviving to age 45 varies between 26 percent and 43 percent, and life expectancy at age 45 varies from 14 to 24 years." That's essentially the same range as global life expectancy in 1800. In 2016, global average life expectancy exceeded 72 years. The proportion of hunter-gatherers surviving to age 45 is considerably lower than 55 percent of Englishmen back in 1851. The range of 14 to 24 years of additional life expectancy for hunter-gatherers at age 45 is basically the same as for Europeans at age 65 today.

Nor is life expectency the only statistic at our disposal. That 2007 paper reports that violence (homicide and warfare) accounted for 18.8 percent of the deaths among the subsistence groups under review. For comparison's sake, interpersonal and collective violence in 2016 claimed the lives of 560,000 people around the world. Given a world population of 7.7 billion, that's a death by violence rate about 0.007 percent.

Why has Hickel engaged in such statistical subterfuges and Edenic anthropological handwaving? Because he despises "free market capitalism" and wants to issue "a ringing indictment of our global economic system, which is failing the vast majority of humanity." Except, as we've seen, it is not. During the past two centuries, that system has lifted billions out of humanity's natural state of abject poverty, ignorance, and violence, and that process of economic uplift has dramatically accelerated in the past four decades. If the institutions that undergird that growth can be sustained, average incomes will continue to their rapid rise, enabling those around the globe who are still mired in poverty to enjoy ever greater prosperity.

Bottom line: Bill Gates is right that poverty is decreasing, and Hickel couldn't be more wrong.

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  • Crusty Juggler||

    If poverty is decreasing how come I can't afford a new house but Bill Gates can?

    Riddle me that.

  • Diane Reynolds (Paul.)||

    If you'd drop the sex dungeon as a requirement you'd be amazed what you could afford.

  • Brandybuck||

    Actually a sex dungeon isn't that expensive. Once can easily be constructed in any crawspace for a mere pittance. Crusty's problem is that he wants a sound proofed dungeon with titanium steel vault doors and an automatic slide out rack of rubber implements. Something you can't just pick up at your local hardware store. Not even in Crusty's neighborhood.

  • Diane Reynolds (Paul.)||

    His duct tape bills alone rival my mortgage payment.

  • Crusty Juggler||

    I mean it needs to be sound proof...

  • Brandybuck||

    Can't you just play some Def Leppard really really loud?

  • a ab abc abcd abcde abcdef ahf||

    The book Factfulness is a great read and a great source of these kinds of statistics. (If Ron mentioned it, sorry for missing it.)

  • Ron Bailey||

    a: I fully endorse your endorsement of Factfulness! Along those lines, my co-author Marian Tupy and I will publish a book later this year tentatively titled, Ten Global Trends Every Smart Person Needs to Know (and 67 others you might find interesting). Basically it's constructed as "picture" book with chart/graph depicting the relevant global trend on one page and 250 words explaining it on the opposite page.

  • Horatio Cornblower||

    Very much looking forward to the book, Ron. It will give me a year's-worth of factoids that I can put on my "Good News of the Week" board at work. This past week's came from your reporting of data on life expectancy, peak population, peak farmland, and the increase in tree cover from Reason's 50th Anniversary celebaration podcast. Please keep it up. We have much to be proud of and look forward to as a race.

    Also, props for being one of the few (the only?) Reason writers to post in the comments.

  • LiborCon||

    I read Factfulness last week. Everybody should read it, and 'The Better Angels of Our Nature' by Steven Pinker. They're both great antidotes for the self-pity and whining of spoiled crybabies in the 21st Century.

  • John||

    If capitalism reduces poverty, just change the definition of poverty to make it not true. This is what leftists do. People living on welfare today have more material abundance than my lower middle class son of a widow father did in the 1950s. Yet, leftists are forever pointing to the horros of poverty.

  • a ab abc abcd abcde abcdef ahf||

    Café Hayek has a recurring string of posts on who would want to trade places with John D. Rockefeller, possibly the richest man of all time, adjusted for inflation. If he wanted Thai food, he would have had to take a month or two ship voyage to Thailand, or bring over a Thai cook and a steady supply of Thai food ingredients; we can pick up frozen food from around the world at most grocery stores, and most people could afford to hop on a jet and be in Thailand within a day. He couldn't call Europe for love nor money; even the poorest rube with even the cheapest cell phone can call anyone in the world. President Harding's son died in 1922 from an infected blister from playing tennis; even the poorest homeless person can get that taken care of.

    To claim that no one knows about poverty rates in 1820 is preposterous.

  • Nardz||

    You speak of material abundance.
    Wealth, like poverty, is relative.
    Thai food is an abundant luxury, but it doesn't necessarily fulfill larger concerns like finding a mate, finding successful, finding purpose, etc

  • Brandybuck||

    You just solved the budget problem! Just give the poor good feelz instead of money, because money is materialistic. Yay!

  • ||

    You speak of material abundance.

    No he doesn't. Communicating with Europe isn't a material good, a Thai cook can certainly bring happiness beyond just a plate of food, and additional years after surviving a blister can hardly be measured by wealth or abundance.

    He listed all kinds of abundance and you chose to see it all as material.

  • Austen Heller||

    In Thailand, there is lots of Thai food. Practically all you can get cept some KFC. And there are .... lots of Thai's there. So Thai food causes Thai people. This reductionism is great.

  • Brandybuck||

    Milton Friedman's television series, "Free To Choose", had half hour discussion round tables afterward. In one episode on poverty, an assistant secretary of HEW or something remarked that there will always be a bottom 20% therefore reducing poverty was not mathematically possible therefore her department needed funding forever.

  • ||

    That was a great series, and yes she pretty much admitted to being a racketeer.

  • C. S. P. Schofield||

    Leftists are, for the most part and often deliberately, illiterate and innumerate. They CAN read, but mostly don't, and what they know about history is swamped by what they 'know' that just ain't so. They believe in multiple Golden Ages that never existed, and for which there is absolutely no evidence that another Leftist didn't make up. It has completely escaped their notice that the primary dietary problem of the poor in the United States is that they are too fat...or rather, they noticed but completely fail to comprehend how extraordinary that is.

  • Sevo||

    Someone here was promoting that lefty trope about how 'most Americans are one paycheck away from poverty'. Right up there with '20% of Americans are 'food insecure'.

  • Diane Reynolds (Paul.)||

    Even NPR debunked that-- well, I think they waited until Bill Clinton was elected in 92... but yeah, the only people who believe that are being willfully dense.

  • LiborCon||

    NPR debunking?
    On Martin Luther King Day, NPR had a guest that said 3 billion people go to bed hungry every night and that the world is much worse off than it was 50 years ago. Apparently, he hadn't read Factfulness.

  • Diane Reynolds (Paul.)||

    Again, Bill Clinton was in newly in office, so like Obama's first term, there was a spate of throat-clearing and point-clarifying going on with things that had been screamed in the media over the previous 12 years.

  • Paloma||

    That's why they have a refrigerator in the tv room with cold cuts and cheese and beer. With chips and a bowl of popcorn close to the easy chair so they can be sure they won't have to go ten minutes without stuffing their face.

  • BYODB||

    Look, you gotta lie in order to destroy capitalism since capitalism is evil. Sure, it has better outcomes than any other system known to man, but since it's immoral we must say anything to discredit it's successes so we can move toward our one world socialist utopia!

  • Calidissident||

    I saw this idiot on Twitter earlier.

    Obviously $7.50 a day isn't living large (though COL is generally much lower in places where that's a normal income) by any means, but it's about 4x the $1.90 standard that 42% of people were living under in 1981. Income doesn't easily quadruple overnight even at a low starting point. The data clearly shows progress. In 1981, a majority, maybe around 2/3rds of people making under $7.50 were making under $1.90. Today it's less than 20%, and by the looks of it a majority of that group are making more than $3.20. But this guy wants to pretend that makes no difference because it hasn't yet hit his arbitrary threshold in a major fashion (which he further cherrypicks by excluding China). He also pretends that all these countries are running their economies in some ideal "Western liberal free-market" fashion which obviously is not true. The countries that have done the best job of embracing the market (along with rule of law, peace, etc.) are the ones who have made the most progress. He also doesn't provide any evidence of an alternative solution that will bring about global progress faster. Even setting aside his laughably false claims about how great hunter-gatherism was, it's not exactly a viable solution today considering that it would require the vast majority of people to die off in order to be sustainable. Then again, that might be a feature, not a bug, for this guy.

  • mtrueman||

    " it's not exactly a viable solution today considering that it would require the vast majority of people to die off in order to be sustainable."

    If vast numbers of people die off, not all that unlikely what with human history being what it is, a hunter-gatherer lifestyle may be the only sustainable way to keep body and soul together.

  • Don't look at me!||

    If Bernie could only confiscate all the cash that those Scrooge McDuck billionaires have in their basements, all would be well.

  • LiborCon||

    "When problems become rare, we count more things as problems. Our studies suggest that when the world gets better, we become harsher critics of it,"

    And that, in a nutshell, is the foundation of liberal ideology. They need problems like crime, poverty and racism to be increasing so they can save the world. But since those problems are decreasing, they need to keep moving the goalposts. If the world is getting better, then we don't need their radical schemes to save us, we're doing just fine without them.

    To admit the truth would be to acknowledge that their ideology is pointless and irrelevant.

    We don't need gun control laws, over taxing the rich, social media censoring, SJWs and all the other ideological nonsense to make the world a better place.

  • Sevo||

    'Never let a crises go to waste!'

  • LiborCon||

    And when crises are in short supply, make them out of whole cloth.

  • Nardz||

    Correct.
    Otherwise, what is their purpose? Reason for being? Import?

  • Austen Heller||

    If there is no solution to the problem, then there is no problem.

  • DaveSs||

    As capitalism continues to eliminate extreme poverty, you have to shift to find a new way to demonize capitalism, thus 'wealth inequality'

  • Francisco d'Anconia||

    Ding, ding, ding!

  • girleeee||

    How do those people get faculty positions, when they have zero facility with basic statistics. He laments the gross number of people living at less than $7.40, without even considering the change in prevalence? Who hires these people?

  • girleeee||

    Omg and he knows nothing about econ. When we determine purchase parity, we compare an ability to afford a standard "basket of goods." His bs about how people in the past did so well that they didn't even "need money" makes no sense.

  • Mickey Rat||

    The mythology of the "noble savage" lives.

  • Uncle Jay||

    Global poverty will decline if capitalism continues.
    Is there a better reason why capitalism should be smashed?
    Only through poverty, diseases, ignorance, wars, famine, disco and other catastrophes can socialism be accepted as the true solution to man's plights.
    So let's all march forward to further exacerbate the world's problems so we can usher in a world wide socialist paradise like they are enjoying in Cuba, North Korea and Venezuela and live happily ever after.

  • Freddy the Jerk||

    Only through poverty, diseases, ignorance, wars, famine, disco and other catastrophes can socialism be accepted as the true solution to man's plights.

    Did you mean to put "disco" in there? Because if so...respect!

  • Atlas 2001||

    The reason that this article is way off is that a person working in 1980 could work a reasonable paying full time job and afford to support themselves and a dependent. That is not true today. Wages have not gone up to match what even the cheapest apartment costs today for that same scenario to happen today.

  • Butler T. Reynolds||

    Maybe the question should be why apartments are unaffordable, not why wages haven't risen accordingly.

  • Atlas 2001||

    The reason that this article is way off is that a person working in 1980 could work a reasonable paying full time job and afford to support themselves and a dependent. That is not true today. Wages have not gone up to match what even the cheapest apartment costs today for that same scenario to happen today. Meanwhile the wealthy have steadily gotten wealthier at the expense of the middle class.

  • Mickey Rat||

    How much since 1980 has non wage compensation has gone up? How much has the potential workforce expanded? There are some other factors involved that mean you are not comparing apples to apples.

  • Freddy the Jerk||

    Cite please.

    Or did you just pull that outta your ass? 'cause a simple Google search shows home ownership rates have only decreased 1 percent in the last 60 years, which would not really do much to support your assertion.

  • Paloma||

    Property taxes have gone up too, so much so that they're now almost as much as the mortgage itself. That makes home ownership less attractive for a lot of people.

  • ElvisIsReal||

    It's not surprising that once we went "full fiat", the fake economy started taking over the real one. In the fake economy, the closer you are to the money-making machine, the more better off you are, forever.

  • Sevo||

    "It's not surprising that once we went "full fiat", the fake economy started taking over the real one. In the fake economy, the closer you are to the money-making machine, the more better off you are, forever."
    Amazon has really nice tin-foil hats.

  • Sevo||

    "The reason that this article is way off is that a person working in 1980 could work a reasonable paying full time job and afford to support themselves and a dependent. That is not true today."

    You're full of shit.

  • Quo Usque Tandem||

    What was it Tony posted the other day? "I just want for my basic needs to be taken care of without my having to worry about it..."

    So "poverty" must consider those fundamental human "rights" to housing, [higher] education, health care, a guaranteed monthly income, and self esteem. And if you notice that others may be better off than you, that will adversely affect your self esteem and then something must be done about it so everyone can feel ok about themselves.

    In other words, if everyone is "poor" then no one is "poor."

  • Francisco d'Anconia||

    Basic needs:

    Prime rib and lobster
    A three bedroom in the city
    Columbia U
    $5K/mo spending money

  • Enemy of the State||

    If my need for female companionship is not being met, I'm gonna need some kinda government program so i get my rights met...

  • mtrueman||

    Who ever told you that poverty can be measured in dollars per day? It wasn't an economist by any chance, was it?

  • mtrueman||

    The idea that poverty is something that's out there and can be measured by dividing the number of dollars by the number of days is just the kind of academic flim flammery that is condemned here on a daily basis. Our science correspondent should be able to detect genuine science from social science posing as the real thing.

  • Sevo||

    You're full of shit.

  • mtrueman||

    I'm no stooge.

  • Migrant Log Chipper||

    No one said that, moron. He said and you are full of shit.

  • mtrueman||

    I read that too.

  • Sevo||

    You're full of shit. Read it again and fuck off.

  • mtrueman||

    I READ IT TWICE ALREADY!!!

  • FreeRadical||

    What is so hard about making the pictures links so that you go to the site and see a bigger version? HnR articles always have this problem.

    Come on, Ron, get it done!

  • Flagger||

    I am confused. This article and several others I have recently read tout long-term global progress against poverty. However, I also see articles (eg, Independent article ) citing Oxfam as saying "the total dollar wealth of the bottom half of humanity – some 3.8 billion people – fell by around 11 per cent." Are these both true and just based on different ways of measuring? Perhaps the author or others here could help me understand. Thanks

  • Sevo||

    "However, I also see articles (eg, Independent article ) citing Oxfam as saying "the total dollar wealth of the bottom half of humanity – some 3.8 billion people – fell by around 11 per cent." Are these both true and just based on different ways of measuring?"

    Yes.
    Wealth =/= income. And given Oxfam's declared goal, it is not surprising that they would attempt to conflate the two.
    Further, a decrease in wealth by something very close to 10% could easily be caused by the thug-governments of Venezuela and Zimbabwe causing a huge decrease in wealth by pushing inflation beyond the 1,000,000% annual rate.
    Suffice to say I'd want to see the numbers Oxfam used and how the calcs were done.

  • Austen Heller||

    When opinions change, change the facts.

  • tlapp||

    Let me define what poverty is and I'll make the stats show any poverty rate you want.

  • Butler T. Reynolds||

    Same goes for racism and misogyny. *sigh*

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