To listen to the Democrats - Americans committed to the reduction of poverty should support their agenda of increased government and social engineering. Unfortunately, for them, as David Brooks points out, the numbers are not on the side of the"do gooders" but on the side of the reviled capitalists who brought us unprecedented growth:
. . . This is having a wonderful effect on world poverty, because when regions grow, that growth is shared up and down the income ladder. In its report, the World Bank notes that economic growth is producing a"spectacular" decline in poverty in East and South Asia. In 1990, there were roughly 472 million people in the East Asia and Pacific region living on less than $1 a day. By 2001, there were 271 million living in extreme poverty, and by 2015, at current projections, there will only be 19 million people living under those conditions.
Less dramatic declines in extreme poverty have been noted around the developing world, with the vital exception of sub-Saharan Africa. It now seems quite possible that we will meet the United Nations' Millennium Development Goals, which were set a few years ago: the number of people living in extreme poverty will be cut in half by the year 2015. As Martin Wolf of The Financial Times wrote in his recent book,"Why Globalization Works":"Never before have so many people - or so large a proportion of the world's population - enjoyed such large rises in their standard of living." . . .
Economists have been arguing furiously about whether inequality is increasing or decreasing. But it now seems likely that while inequality has grown within particular nations, it is shrinking among individuals worldwide. The Catalan economist Xavier Sala-i-Martin looked at eight measures of global inequality and found they told the same story: after remaining constant during the 70's, inequality among individuals has since declined.
What explains all this good news? The short answer is this thing we call globalization. Over the past decades, many nations have undertaken structural reforms to lower trade barriers, shore up property rights and free economic activity. International trade is surging. The poor nations that opened themselves up to trade, investment and those evil multinational corporations saw the sharpest poverty declines. Write this on your forehead: Free trade reduces world suffering.
It's worth reminding ourselves that the key task ahead is spreading the benefits of globalization to Africa and the Middle East. It's worth noting this perhaps not too surprising phenomenon: As free trade improves the lives of people in poor countries, it is viewed with suspicion by more people in rich countries.
And who in the rich countries are complaining about the very engines of growth in poor countries - about outsourcing? They often include those who try to shame us not to buy the products made by the poor only to offer the poor more useless charity in the form of counterproductive foreign aid.
