Of course that day is a ways off. Hundreds of millions of people remain in extreme poverty, and getting to zero will require a greater effort than just extrapolating along a ruler. Though the numbers are dwindling in countries like India and Indonesia, they are increasing in the poorest of the poor countries, like Congo, Haiti, and Sudan, and the last pockets of poverty will be the hardest to eliminate.29 Also, as we approach the goal we should move the goalposts, since not-so-extreme poverty is still poverty. In introducing the concept of progress I warned against confusing hard-won headway with a process that magically takes place by itself. The point of calling attention to progress is not self-congratulation but identifying the causes so we can do more of what works. And since we know that something has worked, it’s unnecessary to keep depicting the developing world as a basket case to shake people out of their apathy—with the danger that they will think that additional support would just be throwing money down a rat hole.30
So what is the world doing right? As with most forms of progress, a lot of good things happen at once and reinforce one another, so it’s hard to identify a first domino. Cynical explanations, such as that the enrichment is a one-time dividend of a surge in the price of oil and other commodities, or that the statistics are inflated by the rise of populous China, have been examined and dismissed. Radelet and other development experts point to five causes.31
“In 1976,” Radelet writes, “Mao single-handedly and dramatically changed the direction of global poverty with one simple act: he died.”32 Though China’s rise is not exclusively responsible for the Great Convergence, the country’s sheer bulk is bound to move the totals around, and the explanations for its progress apply elsewhere. The death of Mao Zedong is emblematic of three of the major causes of the Great Convergence.
The first is the decline of communism (together with intrusive socialism). For reasons we have seen, market economies can generate wealth prodigiously while totalitarian planned economies impose scarcity, stagnation, and often famine. Market economies, in addition to reaping the benefits of specialization and providing incentives for people to produce things that other people want, solve the problem of coordinating the efforts of hundreds of millions of people by using prices to propagate information about need and availability far and wide, a computational problem that no planner is brilliant enough to solve from a central bureau.33 A shift from collectivization, centralized control, government monopolies, and suffocating permit bureaucracies (what in India was called “the license raj”) to open economies took place on a number of fronts beginning in the 1980s. They included Deng Xiaoping’s embrace of capitalism in China, the collapse of the Soviet Union and its domination of Eastern Europe, and the liberalization of the economies of India, Brazil, Vietnam, and other countries.
Though intellectuals are apt to do a spit take when they read a defense of capitalism, its economic benefits are so obvious that they don’t need to be shown with numbers. They can literally be seen from space. A satellite photograph of Korea showing the capitalist South aglow in light and the Communist North a pit of darkness vividly illustrates the contrast in the wealth-generating capability between the two economic systems, holding geography, history, and culture constant. Other matched pairs with an experimental group and a control group lead to the same conclusion: West and East Germany when they were divided by the Iron Curtain; Botswana versus Zimbabwe under Robert Mugabe; Chile versus Venezuela under Hugo Chávez and Nicolás Maduro—the latter a once-wealthy, oil-rich country now suffering from widespread hunger and a critical shortage of medical care.34 It’s important to add that the market economies which blossomed in the more fortunate parts of the developing world were not the laissez-faire anarchies of right-wing fantasies and left-wing nightmares. To varying degrees, their governments invested in education, public health, infrastructure, and agricultural and job training, together with social insurance and poverty-reduction programs.35
Radelet’s second explanation of the Great Convergence is leadership. Mao imposed more than communism on China. He was a mercurial megalomaniac who foisted crackbrained schemes on the country, such as the Great Leap Forward (with its gargantuan communes, useless backyard smelters, and screwball agronomic practices) and the Cultural Revolution (which turned the younger generation into gangs of thugs who terrorized teachers, managers, and descendants of “rich peasants”).36 During the decades of stagnation from the 1970s to the early 1990s, many other developing countries were commandeered by psychopathic strongmen with ideological, religious, tribal, paranoid, or self-aggrandizing agendas rather than a mandate to enhance the well-being of their citizens. Depending on their sympathy or antipathy for communism, they were propped up by the Soviet Union or the United States under the principle “He may be a son of a bitch, but he’s our son of a bitch.”37 The 1990s and 2000s saw a spread of democracy (chapter 14) and the rise of levelheaded, humanistic leaders—not just national statesmen like Nelson Mandela, Corazon Aquino, and Ellen Johnson Sirleaf but local religious and civil-society leaders acting to improve the lives of their compatriots.38
A third cause was the end of the Cold War. It not only pulled the rug out from under a number of tinpot dictators but snuffed out many of the civil wars that had racked developing countries since they attained independence in the 1960s. Civil war is both a humanitarian disaster and an economic one, as facilities are destroyed, resources are diverted, children are kept out of school, and managers and workers are pulled away from work or killed. The economist Paul Collier, who calls war “development in reverse,” has estimated that a typical civil war costs a country $50 billion.39
A fourth cause is globalization, in particular the explosion in trade made possible by container ships and jet airplanes and by the liberalization of tariffs and other barriers to investment and trade. Classical economics and common sense agree that a larger trading network should make everyone, on average, better off. As countries specialize in different goods and services, they can produce them more efficiently, and it doesn’t cost them much more to offer their wares to billions of people than to thousands. At the same time buyers, shopping for the best price in a global bazaar, can get more of what they want. (Common sense is less likely to appreciate a corollary called comparative advantage, which predicts that, on average, everyone is better off when each country sells the goods and services that it can produce most efficiently even if the buyers could produce them still more efficiently themselves.) Notwithstanding the horror that the word elicits in many parts of the political spectrum, globalization, development analysts agree, has been a bonanza for the poor. Deaton notes, “Some argue that globalization is a neoliberal conspiracy designed to enrich a very few at the expense of many. If so, that conspiracy was a disastrous failure—or at least, it helped more than a billion people as an unintended consequence. If only unintended consequences always worked so favorably.”40
To be sure, the industrialization of the developing world, like the Industrial Revolution two centuries before it, has produced working conditions that are harsh by the standards of modern rich countries and have elicited bitter condemnation. The Romantic movement in the 19th century was partly a reaction to the “dark satanic mills” (as William Blake called them), and since that time a loathing of industry has been a sacred value of C. P. Snow’s Second Culture of literary intellectuals.41 Nothing in Snow’s essay enraged his assailant F. R. Leavis as much as this passage:
It is all very well for us, sitting pretty, to think that material standards of living don’t matter all that much. It is all very well for one, as a personal choice, to reject industrialisation—do a modern Walden if you like, and if you go without much food, see most of your children die in infancy, despise the comforts of literacy, accept twenty years off your own life, then I respect you for the strength of your aesthetic revulsion. But I don’t respect you in the slightest if, even passively, you try to impose the same choice on others who are not free to choose. In fact, we know wh
at their choice would be. For, with singular unanimity, in any country where they have had the chance, the poor have walked off the land into the factories as fast as the factories could take them.42
As we have seen, Snow was accurate in his claims about advances in life and health, and he was also right that the appropriate standard in considering the plight of the poor in industrializing countries is the set of alternatives available to them where and when they live. Snow’s argument is being echoed fifty years later by development experts such as Radelet, who observes that “while working on the factory floor is often referred to as sweatshop labor, it is often better than the granddaddy of all sweatshops: working in the fields as an agricultural day laborer.”
When I lived in Indonesia in the early 1990s, I arrived with a somewhat romanticized view of the beauty of people working in rice paddies, together with reservations about the rapidly growing factory jobs. The longer I was there, the more I recognized how incredibly difficult it is to work in the rice fields. It’s a backbreaking grind, with people eking out the barest of livings by bending over for hours in the hot sun to terrace the fields, plant the seeds, pull the weeds, transplant the seedlings, chase the pests, and harvest the grain. Standing in the pools of water brings leeches and the constant risk of malaria, encephalitis, and other diseases. And, of course, it is hot, all the time. So, it was not too much of a surprise that when factory jobs opened offering wages of $2 a day, hundreds of people lined up just to get a shot at applying.43
The benefits of industrial employment can go beyond material living standards. For the women who get these jobs, it can be a liberation. In her article “The Feminist Side of Sweatshops,” Chelsea Follett (the managing editor of HumanProgress) recounts that factory work in the 19th century offered women an escape from the traditional gender roles of farm and village life, and so was held by some men at the time “sufficient to damn to infamy the most worthy and virtuous girl.” The girls themselves did not always see it that way. A textile mill worker in Lowell, Massachusetts, wrote in 1840:
We are collected . . . to get money, as much of it and as fast as we can. . . . Strange would it be, if in money-loving New England, one of the most lucrative female employments should be rejected because it is toilsome, or because some people are prejudiced against it. Yankee girls have too much independence for that.44
Here again, experiences during the Industrial Revolution prefigure those in the developing world today. Kavita Ramdas, the head of the Global Fund for Women, said in 2001 that in an Indian village “all there is for a woman is to obey her husband and relatives, pound millet, and sing. If she moves to town, she can get a job, start a business, and get education for her children.”45 An analysis in Bangladesh confirmed that the women who worked in the garment industry (as my grandparents did in 1930s Canada) enjoyed rising wages, later marriage, and fewer and better-educated children.46 Over the course of a generation, slums, barrios, and favelas can morph into suburbs, and the working class can become middle class.47
To appreciate the long-term benefits of industrialization one does not have to accept its cruelties. One can imagine an alternative history of the Industrial Revolution in which modern sensibilities applied earlier and the factories operated without children and with better working conditions for the adults. Today there are doubtless factories in the developing world that could offer as many jobs and still turn a profit while treating their workers more humanely. Pressure from trade negotiators and consumer protests has measurably improved working conditions in many places, and it is a natural progression as countries get richer and more integrated into the global community (as we will see in chapters 12 and 17 when we look at the history of working conditions in our own society).48 Progress consists not in accepting every change as part of an indivisible package—as if we had to make a yes-or-no decision on whether the Industrial Revolution, or globalization, is a good thing or bad thing, exactly as each has unfolded in every detail. Progress consists of unbundling the features of a social process as much as we can to maximize the human benefits while minimizing the harms.
The last, and in many analyses the most important, contributor to the Great Convergence is science and technology.49 Life is getting cheaper, in a good way. Thanks to advances in know-how, an hour of labor can buy more food, health, education, clothing, building materials, and small necessities and luxuries than it used to. Not only can people eat cheaper food and take cheaper medicines, but children can wear cheap plastic sandals instead of going barefoot, and adults can hang out together getting their hair done or watching a soccer game using cheap solar panels and appliances. As for good advice on health, farming, and business: it’s better than cheap; it’s free.
Today about half the adults in the world own a smartphone, and there are as many subscriptions as people. In parts of the world without roads, landlines, postal service, newspapers, or banks, mobile phones are more than a way to share gossip and cat photos; they are a major generator of wealth. They allow people to transfer money, order supplies, track the weather and markets, find day labor, get advice on health and farming practices, even obtain a primary education.50 An analysis by the economist Robert Jensen subtitled “The Micro and Mackerel Economics of Information” showed how South Indian small fishermen increased their income and lowered the local price of fish by using their mobile phones at sea to find the market which offered the best price that day, sparing them from having to unload their perishable catch on fish-glutted towns while other towns went fishless.51 In this way mobile phones are allowing hundreds of millions of small farmers and fishers to become the omniscient rational actors in the ideal frictionless markets of economics textbooks. According to one estimate, every cell phone adds $3,000 to the annual GDP of a developing country.52
The beneficent power of knowledge has rewritten the rules of global development. Development experts differ on the wisdom of foreign aid. Some argue that it does more harm than good by enriching corrupt governments and competing with local commerce.53 Others cite recent numbers which suggest that intelligently allocated aid has in fact done tremendous good.54 But while they disagree on the effects of donated food and dollars, all agree that donated technology—medicines, electronics, crop varieties, and best practices in agriculture, business, and public health—has been an unalloyed boon. (As Jefferson noted, he who receives an idea from me receives instruction without lessening mine.) And for all the emphasis I’ve placed on GDP per capita, the value of knowledge has made that measure less relevant to what we really care about, quality of life. If I had squeezed a line for Africa into the lower right corner of figure 8-3, it would look unimpressive: the line would curve upward, to be sure, but without the exponential blastoff of the lines for Europe and Asia. Charles Kenny emphasizes that the actual progress of Africa belies the shallow slope, because health, longevity, and education are so much more affordable than they used to be. Though in general people in richer countries live longer (a relationship called the Preston curve, after the economist who discovered it), the whole curve is being pushed upward, as everyone is living longer regardless of income.55 In the richest country two centuries ago (the Netherlands), life expectancy was just forty, and in no country was it above forty-five. Today, life expectancy in the poorest country in the world (the Central African Republic) is fifty-four, and in no country is it below forty-five.56
Though it’s easy to sneer at national income as a shallow and materialistic measure, it correlates with every indicator of human flourishing, as we will repeatedly see in the chapters to come. Most obviously, GDP per capita correlates with longevity, health, and nutrition.57 Less obviously, it correlates with higher ethical values like peace, freedom, human rights, and tolerance.58 Richer countries, on average, fight fewer wars with each other (chapter 11), are less likely to be riven by civil wars (chapter 11), are more likely to become and stay democratic (chapter 14), and have greater respect for human rights (chapter 14—on average, that is; Arab o
il states are rich but repressive). The citizens of richer countries have greater respect for “emancipative” or liberal values such as women’s equality, free speech, gay rights, participatory democracy, and protection of the environment (chapters 10 and 15). Not surprisingly, as countries get richer they get happier (chapter 18); more surprisingly, as countries get richer they get smarter (chapter 16).59
In explaining this Somalia-to-Sweden continuum, with poor violent repressive unhappy countries at one end and rich peaceful liberal happy ones at the other, correlation is not causation, and other factors like education, geography, history, and culture may play roles.60 But when the quants try to tease them apart, they find that economic development does seem to be a major mover of human welfare.61 In an old academic joke, a dean is presiding over a faculty meeting when a genie appears and offers him one of three wishes—money, fame, or wisdom. The dean replies, “That’s easy. I’m a scholar. I’ve devoted my life to understanding. Of course I’ll take wisdom.” The genie waves his hand and vanishes in a puff of smoke. The smoke clears to reveal the dean with his head in his hands, lost in thought. A minute elapses. Ten minutes. Fifteen. Finally a professor calls out, “Well? Well?” The dean mutters, “I should have taken the money.”
CHAPTER 9
INEQUALITY
But is it all going to the rich?” That’s a natural question to ask in developed countries in the second decade of the 21st century, when economic inequality has become an obsession. Pope Francis called it “the root of social evil”; Barack Obama, “the defining challenge of our time.” Between 2009 and 2016, the proportion of articles in the New York Times containing the word inequality soared tenfold, reaching 1 in 73.1 The new conventional wisdom is that the richest one percent have skimmed off all the economic growth of recent decades, and everyone else is treading water or slowly sinking. If so, the explosion of wealth documented in the previous chapter would no longer be worth celebrating, since it would have ceased contributing to overall human welfare.