Sunday, 11 October 2015

The elimination of poverty will be the triumph of neoliberalism


We are well on our way to eliminating the sort of awful, grinding, absolute poverty that was a feature of human society for most of history:

And check out that World Bank data - from 1980 through to today the rate has dropped from 4 in10 of the world's population to 1 in 10 of the world's population. This is the age of what got called neoliberalism, sometimes 'The Washington Consensus' - over half of the world's absolute poverty ended through sound fiscal policies, property rights and open trade.

Yet the left -or much of it - would have us believe that the very policies that have helped with that spectacular decline in poverty are the reason for us having poverty. This isn't about different rates of tax, it's not about welfare or national health systems - it's about the left's complete failure to recognise what's in front of their eyes. Neoliberalism doesn't create poverty but does the complete opposite - it destroys poverty at a rate never seen before in human history. We need more of it not less.

All the left offer us is a combination of dirigiste protectionism, the portrayal of consumer rights as inferior to workers' rights, and a lowest common denominator approach to the economy. It's not just that neoliberalism's opponents contradict themselves but that they refuse to recognise that, in large part, we are rich because of those 'corporations' they despise not in spite of them. These arguments are trapped in a desire - almost a fervent belief - that there's somehow a better, fairer, less hard way of organising the economy. One like this:

Jobs are in teaching, healthcare and public service – professions that contribute meaningfully to society and directly improve the quality of our lives. All energy production is renewable. Industrial districts are zoned for agriculture and forestry. There are no offices, no shops, and no landfill sites.

The problem is that this group hug sort of idea is fine in utopian fiction but, in the real world, results in economic collapse (although we may get the cuddly world because of all those robots that will do everything for us thereby making us even richer and happier). This doesn't stop people working in "professions that contribute meaningfully to society" getting all hoity-toity about people who work in private businesses. Obviously such folk are exploitative with their shops, offices and factories.

Meanwhile - and often in the teeth of opposition from those in "meaningful professions" - the folk who run those shops, have businesses in those offices and who operate those factories get on with the prosaic business of meeting consumer demand. And in doing so these private business create and innovate with the result that the world around them improves. The application of technology reduces costs, the efforts of entrepreneurs bring new things to ordinary people and folk who once were poor are no longer poor.

Just take that phone in your hand. You probably think of it as a thing of the decadent west. Well think again:

Across the seven countries surveyed, roughly two-thirds or more say they own a cell phone. Ownership is especially high in South Africa and Nigeria, where about nine-in-ten have a cell phone. Since 2002, cell phone ownership has exploded in the countries where trends are available. In 2002, only 8% of Ghanaians said they owned a mobile phone, while that figure stands at 83% today, a more than tenfold increase. Similar growth in mobile penetration is seen in all African countries where survey data are available.

This penetration isn't the consequence of government mandation (although government's have a role) but rather of private business delivering, at an ever lower cost, an essential communications device. And this device and the networks it opens up is central to Africa's economic growth. More so than all the aid money, it's business investment, trade and commerce - capitalism and neoliberalism if you must - that is raising the living standards of ordinary Africans. That economic model, dismissed by libertarian right and Marxist left as ineffective, is delivering for Africa just as it did everywhere else it was tried. Neoliberalism isn't perfect, there's corruption, unhealthy relationships between big business and big government, and environmental exploitation. But these are things that we invented democracy and open government to deal with - throwing the development baby out with the autocracy bathwater only results, as Venezuelans and Zimbabweans have discovered, in more poverty.

Over the next couple of decades absolute poverty will be eliminated. And, at the same time the gap between the developing world and our advanced economies will close. This won't just make the world richer, it will make it fairer too and more equal. Add healthier, longer-lived and happier to that mix and you'll see why carrying on with that "neoliberal agenda" is so important and why dumping it in the face of all the evidence that it works is stupid. Given a chance the elimination of poverty will be the triumph of neoliberalism.


1 comment:

Chester Draws said...

Jobs are in teaching, healthcare and public service|

And there was me thinking my main reason for teaching was to enable people to get educated, so that they get good jobs!