GLOBAL POVERTY AND INEQUALITY SPRING 2007

Are less people living in poverty now than they were years ago? Is inequality between poor and rich countries decreasing? Are global poverty and inequality better seen in class rather than country specific terms? What are the reasons for global poverty and inequality Are there any solutions?

Of worlds 6 billion people, 2.8 billion survive on $2/day (about 45 %). 1.2% on $1 (about 20%) US, Europe and Japan are 100 times richer on average than Ethiopia, Haiti and Nepal Richest 10% of Americans to poorest 10% of Ethiopians are above 10,000 to 1.

Critics argue rich are getting richer, poor worse off (within and between countries) Absolute and relative poverty increasing according to critical scholars Mainstream economists, scholars and politicians, spokespersons of IOs like IMF and World Bank provide upbeat assessments.

David Dollar and Aart Kraay (2002) widely quoted study suggests the best evidence shows… that the current wave of globalization, which started around 1980 has actually promoted economic equality and reduced poverty * Others at WB suggest , world income inequality is very high & increasing.

Measuring Global Poverty Income Metrics World Bank only producer of global poverty statistics April 2004 press release The number of poor people in developing countries, less than $1/day had dropped from 1.5billion in 1981 to 1.1 billion in (reduction of poverty from 40 to 21% of total population in developing countries)

$1/day measure Purchasing power parity Extremely low measure of poverty Arbitrary, lacks conceptual foundation Malnutrition/shelter/housing/education – missing from notion of poverty, Problems with measurement of poverty Knowledge about numbers of global poor Bias in current methodology- underestimates incidence of global poverty

CAPABILITY APPROACH Amartaya Sen Goods not important in themselves but what they can enable people to do Social, environmental, personal conversion factors Basic Needs – doings and beings necessary to functioning

Filipino women, nannies International care chain Feed, clothe, shelter, children, families Remittances to Philippine $7 billion in 1999 Global capital flows temper effects on global poverty and inequality

Assess based on achieved functioning's children suffer trauma, emotional hardships, loss of family intimacy, Mainstream economists value income Non-monetary capabilities, democratic agency, respect, well-being, social cohesion HDI – Human Development Index

Inequality/Poverty Distinguishing Inequality/Poverty –Inequality, difference, competition, –Absolute/relative poverty Poverty as deprivation Material? Social? Self? Poverty as scarcity Poverty and scarcity socially produced Absolute scarcity of resources may exist in geographical areas Social (relative) scarcity occurs in context of social (class) relations

The limits of scarcity in discourse on global poverty and inequality Income inequality highest levels –Within nation USA 2000 greater than at any time since 1920s Richest 5% of households receive 6 times more income than poorest 20% households Paul Krugman – 70% of all income growth in the USA in the 1980s went to richest 1% of all families WEALTH – richest 1% of households owned 42% of stocks, 55% of all bonds, 44% of all trusts. 71% of all noncorporate business

Inequality between Nations Nigeria 90.8% lived on less than $2/day India 86.2%

Magnitude Magnitude and Scope Empirical indicators th and 19 th centuries political economists wrote about inequality as the central issue of their times, Links to development, poverty, and social harmony

Wherever there is great property, there is great inequality. For one very rich man, there must be at least 500 poor, and the affluence of the few supposes the indigence of the many »ADAM SMITH

Thomas Paine It is well known that in England, the great landed estates, now held in descent, were plundered from the quiet inhabitants at the conquest… That they were not acquired by trade, by commerce, or by an reputable employment is certain…