If you live in a country like the United States, it’s easy to look around and project your experiences on the world and see it as a pretty good place. But then we see infomercials and hear stories about the state of living some endure in developing countries; it’s easy to feel hopeless at the sheer number of people that live in such conditions. Most circumstances of poverty that we might run across in the Western World typically result from a combination of bad luck and poor choices. But in much of the developing world, poverty isn’t the exception, it’s the expectation. Fragile economies, corrupt governments, general instability, infertile lands, an abundance of exploitable resources, a lack of education, and a degressive outlook on women’s rights all lead to the standard that is poverty for many people in such regions.
To make this debate a little more precise and fairer, we need to define a few things. The most important of these questions is: what is poverty exactly? The United States Census Bureau holds that “if a family’s total income is less than the family’s threshold [the threshold is variable to certain other factors], then that family and every individual in it is considered in poverty.” By utilizing the Consumer Price Index and a multitude of other variables, they can determine if various households are below the poverty line or not. On a world scale, extreme poverty is defined as households that survive on less than $1.90 a day (this is likely the number you’ve heard of before when you think of global poverty). About 10% of the world lives in extreme poverty, while the numbers on regular poverty are not as clear; it seems to be somewhere around the 40% mark given that poverty is more subjective and lacks a clear dollar threshold that extreme poverty has.
We need to do little but look at the West’s past attempts to intervene and provide aid to see how futile much of it has been. In some cases, we have helped some, but for larger-scale relief operations for the countries that need it most, Corruption, selfishness, and inefficiency get in the way. We can dream about what ought to happen or what could happen in a perfect world, but taking reality into account, there isn’t much we can directly do that helps. Not to say that their situation is hopeless, because that is far from the truth. A brief look at world history will reveal how many individuals have been raised above the poverty line, mainly due to passive market forces and industrialization. Spoiler alert: we’ve seen an 80% decrease in extreme poverty globally in the past 200 years, according to Our World In Data.
The change in rates of poverty over history concerns more than just the poor of the third world, but global poverty as a whole. Meaning that any amount of free giving shouldn’t have such a significant effect on the planet, as most of the world was below the poverty line. This leads us to one main contributor to the world’s economic success: passive market influences. The rise of capitalism and democracy in the world has enabled free markets to optimize the financial systems behind everything efficiently, and incentivize progress over stagnation, leading to the success we see today. So, it’s not due to active manipulation and direct contribution, but merely letting the markets work as they might.
To say that the economic situation of many countries is beyond our assistance is to be casting a wide net, and the argument exposes itself to tons of gaps. While it might be true that direct relief efforts and support are riddled with issues, that does not mean that they are fruitless. Furthermore, a reason why we might see little results from all that we spend, put simply, we are not helping the world in the most efficient way possible. First world countries spend a great deal on foreign aid, but how to spend it gets much less attention than how much to spend. President of the think tank Copenhagen Consensus Center and author of The Nobel Laureates’ Guide to the Smartest Targets for the World 2016-2030, Dr. Bjorn Lomborg discusses how we can maximize the good that we do with what we spend because not all aid is the same. The point being: there certainly is more we can do directly to help global poverty (even without spending more).
Whether you are an interventionist or an isolationist, most of us can agree that we ought to do something to help others in the world. But is the route to that end letting the markets run their course and freeing trade and reducing regulations, taking a more active approach and directing aid to poverty-laden countries, or a different strategy altogether? Ironically, either way you look at it, we aren’t genuinely following either of these strategies: trade wars and the raising of tariffs slows the globalization of the economy. At the same time, broad and scattered development goals mean inefficient support for third world nations through the UN, all while funneling resources through corrupt regimes that skim off the top and throw the rest like scraps to their citizens.
Lomborg, Bjørn. The Nobel Laureates Guide to the Smartest Targets for the World: 2016-2030. Copenhagen Consensus Center, 2015.
Peer, Andrea. “Global Poverty: Facts, FAQs, and How to Help.” World Vision, 2 Jan. 2020, www.worldvision.org/sponsorship-news-stories/global-poverty-facts.
Roser, Max. “The Short History of Global Living Conditions and Why It Matters That We Know It.” Our World in Data, ourworldindata.org/a-history-of-global-living-conditions-in-5-charts.
“How the Census Bureau Measures Poverty.” The United States Census Bureau, 27 Aug. 2019, www.census.gov/topics/income-poverty/poverty/guidance/poverty-measures.html.