I came across a fascinating article recently by Johan Norberg writing in the December 2016 issue of the Spiked Review. In it he makes the extraordinary claim, "poverty is going extinct."
For purposes of clarity, the income definition of "extreme poverty" to which he is referring is $1.90 per day, adjusted for local purchasing power and inflation. Of course, that level of income is difficult to comprehend in the United States where only the homeless might qualify. Yet it holds profound implications in places around the world where 700 million still fall under the threshold.
Imagine, yesterday 138,000 people rose out of extreme poverty. Today, another 138,000 people rose out of extreme poverty. And tomorrow, another 138,000 people will rise out of extreme poverty. Every year more than 50 million inhabitants of our planet will climb above the threshold for extreme poverty, but we never hear about this remarkable development. Instead, we are bombarded with news of the latest plane crash or terrorist attack. These events are genuinely tragic, but the number of people directly affected worldwide by such incidents is very small in comparison.
"Since 1990, when social critic Naomi Klein claimed that global capitalism lapsed into its most savage form, the proportion who live in extreme poverty... has been reduced from 37% to less than 10%." Norberg described the United Nations Millennium Summit in 2000 where the assembled nations set a goal of halving the 1990 incidence of extreme poverty by 2015. The goal was achieved by 2010, and "even though the world population grew by more than two billion... the number of people who live in extreme poverty was reduced by more than 1.25 billion people."
Throughout human history, as population grew, the number mired in extreme poverty grew. Not anymore, and now the total number struggling under these conditions is less than it was in 1820. "If this does not sound like progress, you should note that in 1820, the world only had approximately 60 million people who did not live in extreme poverty. Today more than 6.5 billion people do not live in extreme poverty." In percentage terms, the risk of living in extreme poverty has been reduced from 94% in 1820 to less than 10% today. Certainly there is more work to be done, but those statistics are worth sharing, don't you think?!
The views expressed are those of Lindsey Randolph and should not be construed as investment advice. All economic information is historical and not indicative of future results. All information is believed to be from reliable sources; however, we make no representations as to its completeness or accuracy. Discuss all information with your advisor prior to implementation.