Piano instrumental
*phone rings*
Here's something you hear a lot:
"Say what you will about capitalism, you can't deny it's lifted people out of poverty"
I hear that all the time, especially when i'm talking about rising inequality
and the vanishing middle class.
The rates of extreme poverty, we are told,
have plummeted under global capitalism.
We are told that global capitalism has cut poverty by
as much as 80% or 90%.
This reminds me of my mother.
Whenever I ranted about how bad the situation was today,
she would tell me how much worse it had been before.
"Be grateful for the improvements, Richard" she would say.
I wasn't convinced then, and I'm not now.
These champions of capitalism are slick, I'll give them that,
but here's why they're wrong.
Their clever math comes from how they define poverty.
According to the world bank, anyone making under $1.90 a day is considered "poor."
Everyone else is okay!
But that number isn't actually based on the living costs of any actual person.
It's totally arbitrary!
Could YOU live on $1.90 a day?
The United Nations doesn't think so.
They say everyone would need at least 4x times that,
$7.40 a day, to get the absolute minimum for
"basic nutrition and normal human life expectancy."
Using this more realistic number, the number of people in poverty has
actually increased over the last four decades,
to a whopping 4.2 billion.
Poverty has gone up, not down.
"But hey, at least a proportion of people in poverty has gone down," they might say.
But what's actually the reason for that?
Was it REALLY capitalism that was our knight in shining armor?
As a matter of fact, almost all of that reduction in poverty has been in one country:
China.
Not in the countries where American-style capitalism was exported.
China accomplished this with
massive government industrial spending
and social programs that it calls "socialist."
With a few exceptions, the rest of the world has seen very little progress in reducing poverty.
If you exclude China, then not only has the number of people in poverty increased,
but the proportion of people in poverty hasn't fared much better,
ticking down a measly 5.4% over 40 years.
At that rate, experts project it would take more than 200 years to come close to eliminating poverty.
And that's only if there are never any recessions,
and the global economy manages to reach 173x its current size.
No one expects either of those things to happen.
Already, the crisis caused by the Coronavirus pandemic
has made years worth of poverty reduction worthless.
100 million people have fallen right back into extreme poverty.
But the problem isn't the viruses, viruses come and go.
The real problem is *the system,*
a system that implodes every four to seven years,
pushing more and more people into deep poverty,
and which has absolutely no protections for ordinary people
when it collapses.
Even the defenders of the system have started to admit just how flawed it is.
The world bank itself now says that reducing inequality by just 1% a year
would lift more people out of poverty
than increasing economic growth by 1% above current forecasts.
That's not to say some things haven't gotten better,
But where they are, it's because of ambitious government programs.
That's why Cuba, an avowedly socialist country under a decades-long embargo,
has a lower rate of infant mortality,
a higher life expectancy,
and a higher rate of literacy
than the much wealthier United States.
And that's also why the countries with the lowest poverty are
places like Denmark and Finland.
It's no mystery:
no advanced economy has ever achieved low poverty rates
without high levels of government social spending.
And the fact is, capitalists have always fought against those policies.
Against progressive taxation.
Against minimum wages.
Against social welfare programs.
Against union bargaining.
Poverty has been reduced not by capitalism,
but in spite of and against capitalists' opposition.
So it's not just that capitalism doesn't fix poverty,
it plunges more and more people into desperation,
so that the system can survive.
The rising number of people in poverty can attest to that.
And despite what the inaccurate statistics might suggest,
as long as we have a system designed around profit,
That won't change.
*phone rings*
This is Richard Wolff, professor of economics
at the New School University, for the Gravel Institute.
*phone distantly continues ringing*
[techno music plays]