The End of Poverty

This blog is actually a book review. I’m putting it on our blog because I think this is an important book.

Ever since I was a child I have heard about how terribly poor people are in Africa and how we had to help them. (If your one of my friends from Faith Church you may be thinking: “Yes, and it was you, Joe who kept telling us that.”) Why have they always been poor, and why doesn’t it ever get better?

I just read a book which has some very interesting answers. It is “The End of Poverty” by Jeffrey Sachs. It turns out, that for most of human history nearly everyone in the world was poor. The per capita income was relative uniform across the world, relatively constant over time (since the invention of agriculture) and very low. Of course there were rich people in every society but they were a small minority. The world economic system barely generated enough wealth for most of the population to live at a subsistence level. About 200 years ago global productivity began an exponential rise lifting much of the world population out of poverty. For a variety of reasons economic growth was not uniform across the globe.

Sachs distinguishes three degrees of poverty:
“Extreme poverty means that households cannot meet basic needs for survival. They are chronically hungry, cannot access health care, lack the amenities of safe drinking water and sanitation, cannot afford education for some or all of their children and perhaps lack rudimentary shelter—a roof to keep rain out of the hut, a chimney to remove smoke from the cook stove and basic articles of clothing like shoes. Unlike moderate and relative poverty, extreme poverty occurs only in developing countries.”

“Moderate poverty generally refers to conditions of life in which basic needs of life are met—but just barely.”

“Relative poverty is generally construed as a household income level below a given proportion of the average national income.” Page 20.

It is extreme poverty that is the focus of this book and that Sachs argues we are finally able to eliminate. The World Bank defines extreme poverty as income below 1 dollar per person per day (adjusted for purchasing power in the country where they live). By this criteria about 1.1 billion people in the world were extremely poor in 2001—roughly 1 of every 6 people in the world. This is down from 1.5 billion in 1981. Dr. Sachs as been involved as an advisor to many international development programs over the past 25 years. Much of the book describes the successes and failures of these efforts and provides insight into what has and hasn’t worked and why.

He describes “the poverty trap”, a situation in which a nation or a community’s capital (human, natural and financial) is so limited that productivity is too low to even replenish capital which wears out. This is the case for subsistence farmers in much of Africa. Soil is progressively depleted of nutrients and farms are sub-divided into smaller plots as population grows. The yield of the farms barely feeds families in good years to there is no income for fertilizer, improved crop varieties, irrigation or other improvements which would boost yields and enable the community to pull itself out of poverty.

The good news is that in many places (for example India) countries are on the economic ladder and climbing. Although there are still many extremely poor people in India the economy as a whole is growing and the number of extreme poor is shrinking. But in other countries, many of them in Africa, the economy is stagnant or shrinking. Sachs argues with data and statistics that this is not due to government corruption or poor policies or lack of modern values. The countries which are “trapped” are those who are too distance from trade lines, lacking in natural resources, lacking in basic infrastructure to attract the kind of international business investment which is lifting countries like India out of the trap.

Sachs argues that the world as a whole is now rich enough get even the poorest countries out of the poverty trap and onto the economic ladder. He close on a very hopeful note recounting three of humankind's previously advances, the abolition of slavery, the dismantling of colonialism and the civil rights and anti-apartheid movements. Each of these initially appeared impossible but was achieved by very persistent grass roots efforts.