26 December 2012

Is This Progress?

The graph above shows the number of people living on less than $2.00 per day, in apples to apples PPP dollars (see below for details), in 1820 and 2005. There are more than 250% more people today living at this very low level of income than almost 200 years ago.

Is that progress?

The details:

The figure of 2.6 billion people worldwide living at less than $2.00 per day in 2005 comes from a 2008 World Bank paper by Chen and Ravallion (here in PDF) and specifically their Table 5. The $2.00 are expressed in 2005 international dollars (i.e., PPP adjusted).

The figure for 1820 comes from the Maddison global GDP dataset, and actually works out to $1.82 in 1990 international dollars (i.e., PPP adjusted values, which will be closer to $2.00 in 2005 dollars). Maddison estimated total global population in 1820 to be 1.04 billion, so the maximum number of people living at less than $2.00 is 1 billion. The actual value is no doubt less than this, but by how much is not known.

Thus, my conclusion that the number of people living on less that $2.00 per day has increased by 250% over almost 200 years is conservative -- it could easily be 300% or 400%.

Some more details: From 1820 to 2005 global population increased by 620% and per capita GDP increased by 1,045% (again, PPP-adjusted dollars, both figures from the Maddison dataset).

28 comments:

  1. Getting to *live* is a really big deal. Even though the number of poor people has increased it is still an improvement.

    Some of them might include the next Heisenberg, the next Dumas or the next Lincoln. They won't all stay earning less than $2 a day.

    Also each will get to experience the joy and sorrow of life.

    Finally, this is cherry picking as you'd be aware. The number of people of $2-5 a day and the number from $5-10 and the number from $10-20 would have exploded. But even without including the incredible gains in welfare for these people we're still better off.

    Regardless of what Paul Ehrlich might claim.

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  2. Isn't another way of looking at this that the "percentage" of world population living on just $2/day or less has dropped by more than half since 1820..?

    Or, even that the percentage of the world population able to consume/spend/invest more than $2/day into the economy has increased Thousands-fold? (0.04B to 4B = 10,000%)

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  3. I suppose it is all how one looks at numbers. The United Nations estimates that poverty was reduced more in the last 50 years than in the previous 500.

    "Do you know the numbers?," Matt Ridley asked in his opening chapter of The Rational Optimist. "In 2005, compared with 1955, the average human being on Planet Earth earned nearly three times as much money (corrected for inflation), ate one-third more calories of food, buried one-third as many of her children and could expect to live one-third longer. All this during a half-century when the world population has more than doubled, so that far from being rationed by population pressure, the goods and services available to the people of the world have expanded. It is, by any standard, an astonishing human achievement….

    "The rich have got richer, but the poor have done even better. The poor in the developing world grew their consumption twice as fast as the world as a whole between 1980 and 2000. The Chinese are ten times as rich, one-third as fecund and 28 years longer-lived than they were 50 years ago. Even Nigerians are twice as rich, 25 per cent less fecund and nine years longer-lived than they were in 1955. Despite a doubling of the world population, even the raw number of people living in absolute poverty (defined as less than a 1985 dollar a day) has fallen since the 1950s, let alone the percentage living in such absolute poverty. That number is, of course, still all too horribly high, but the trend is hardly a cause for despair….

    "Even inequality is declining worldwide. As poor Asians get richer faster than rich Americans, the global ‘Gini coefficient’, which measures inequality, has been falling rapidly. In another respect, too, inequality has been retreating. The spread of IQ scores has been shrinking steadily — because the low scores have been catching up with the high ones. It is a levelling-up caused by an equalisation of nutrition, stimulation or diversity of childhood experience."

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  4. So if we have another plague, the equivalent of the "black death" and wages increase it would be "progress", if there were only 1.5 billion left alive? (you might try to see what the graphs look like on either side of that event).

    The point is that they are living and not dying or dead. Of course they are contributing to pollution, destroying the earth, whatever evils you would ascribe to any alive person (except to Al Gore who has a huge energy wasting mansion and jets to all the conferences he says we need to reduce carbon).

    Of course war works as well as plague. What IS the carbon footprint of our military? If our troops weren't going 10k miles everywhere could everyone have a better life? If we didn't have vehicles measured in gallons per mile without Check-Engine lights and catalytic converters all over the world? What is the EPA mileage of a military Humvee?

    That said, there is a right to property, and to wealth, but it depends on the rule of law. We don't have that. Billionaires who take huge risks, crash the economy so indirectly impoverish millions are bailed out and pay themselves bonuses via the tax money of the working poor.

    I'm for people keeping what they earn. Not what they lobby for, defraud, extort, rob, steal, or otherwise gain illegitimately. The offspring of such are bastards, but the opprobrium belongs upon the parent.

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  5. One billion people living on less than $2 a day in 1820, and 2.5 billion living on less than $2 a day in 2012.

    "Is that progress?"

    Well, the life expectancy at birth is probably about double what it was in 1820:

    http://blog.1000memories.com/75-number-of-people-who-have-ever-lived

    So unless one thinks that it's better to die (for example, of smallpox, malaria, cholera, etc.) than to live on $2 a day, there has been progress.

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  6. Did someone have to much eggnog over Christmas? I suspect there was a point intended here, but it seems to have gotten lost somewhere in the fiber optic cable.

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  7. How many different goods & services could be bought for $2 (adjusted) in 1820? How many different goods & services could be bought for $2 today?

    Will 6.25 billion be living on less than $2 (adjusted) per day in 200 years'time - or will it be nobody?

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  8. Well, according to at least one of the standard progressive measures it's the opposite of progress. Of course, I'd guess that the folks who are pushing using the Gini coefficient as such a measure have never really considered what a society with a coefficient of near unity would actually look like. But then again, math has never been a progressive strong suit.

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  9. The idea of measuring the social situation in terms of absolute numbers is something of a fashion nowadays in "development" circles. It is wrong, in my view. By the same token, there are more unemployed people now than during the Great Depression, but also many more people now who have all sorts of good things: more people living to be 100, more people having cars, more people having everything from big houses to potato peelers, more people avoiding all sorts of diseases, more people not hungry, more food produced per person (and more people overweight and obese), and so on. Neither list is a good indicator that the world has become better or worse.
    The only real measures of any social malady are relative rates, i.e. prevalence percentages, per capita amounts, or other similar indicators. Which indicators are more telling or more useful will depend on the problem and the intent, but the use of absolute numbers is not usually a good approach.

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  10. I think you forgot to include the /sarc tag.

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  11. Dr Pielke, first, thanks for all the good work you have done.

    Next, using your figures I find:

    World population:

    1820: 1.068 billion
    2012: 7 billion

    Number of people living on MORE than $2 per day:

    1820: ≈ zero

    2012: 5,400,000,000

    As one of the people making more than $2 per day, yes, I'd say that was progress ...

    w.



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  12. To quote Burt Rutan -- "here are the same numbers presented in a way to inform, not to alarm" (regarding his CO2 ppt deck)

    World population in 1820 was 1.07B of which 1.04B lived at < $2/day. That's 97%. In 2005 6.5 people, 2.6B living < $2/day. That's 40%... which is a reduce of 2.4 times! Seen as an increase in those living above > $2, we go from 3% to 60%, factor of twenty (multiples of small numbers are bogus, but even so).

    A child born in 2005 was 20 times more likely to live above the $2/day mark than a child in 1820.

    Yes, I'd call that better.

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  13. @ Willis.

    Shouldn't that be 4.4 billion (4,400,000,000) people living on > $2 per day in 2012 (7 billion people - 2.6 billion people living on less than $2 per day)

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  14. Have you all left your sarcasm detector turned off because of the christmas season or something? Ahahah, mr. Pielke you even fooled everyone in this room (well Tom was apparently not fooled).

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  15. Assuming this isn't a wind up, the increase in poverty may be accounted for by the fact that population growth is higher amongst the poor. For economic reasons.

    World population is predicted to level off around 2050 due to increasing incomes in second world countries like Iran and Argentina.

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  16. As with all these numbers, averaging only tells part of the picture. Growth in income is certainly not evenly distributed, as is increases in life-expectancy, as is caloric intake....

    For some, consideration of the proportion in growth increase, and the proportion of increase in life-expectancy and caloric intake, is not particularly relevant to determining "progress."

    How about for you, Roger?

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  17. --snip--

    The growth process was uneven in space as well as time. The rise in life expectation and income has been most rapid in Western Europe, North America, Australasia and Japan. By 1820, this group had forged ahead to an income level twice that in the rest of the world. By 1998, the gap was 7:1. Between the United States and Africa the gap is now 20:1. This gap is still widening.

    --snip--

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  18. According to this chart,

    http://www.oecdobserver.org/images//920.photo.jpg

    from 1950 to 2001, growth in GDP per capita in "the West" vs. "the rest" wasn't that disproportionate (@4X and @3X, respectively).

    Still, I have to wonder what is not evident in aggregating the data. Not to mention how aggregating the data doesn't reflect the broad differences say, between Asia and Africa, further it doesn't reflect the proportions of growth within specific regions or countries.

    Got anything on that, Roger?

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  19. This article takes an interesting look at starting to break down the aggregated data.

    http://www.oecdobserver.org/news/fullstory.php/aid/884/

    I have to say, the more I read about this stuff the more empty becomes the meme about "cheap energy = fewer starving people."

    Along those lines:

    http://books.google.com/books/about/Development_as_Freedom.html?id=Qm8HtpFHYecC

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  20. For example: relevant to determining "progress?":

    --snip

    WASHINGTON — New government research has found “large and growing” disparities in life expectancy for richer and poorer Americans, paralleling the growth of income inequality in the last two decades.

    --snip--

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  21. The date of 1820 is extremely significant. It is the point at which economic growth here in Britain really started. By 1850 the benefits were being clearly seen in all levels of society. A similar pattern soon spread to some other countries, most notably USA and continental Europe. But only a small minority of the worlds population enjoyed these benefits of rising living standards until after WW2. Thus the global "Gini coefficient" (a measure of inequality) increased from 1820 to 1950, more or less stablised for 30 years, then started to fall in the 1980s. The reason for the fall is that many of the world's poor are in faster growing economies than the developed nations. Principally this is the 36%-38% of the world's population that live in either China or India.
    The older measure of absolute poverty was a dollar-a-day (revised in 2005 to $1.25). In 1820 the vast majority of the World's people would have been below this figure. By 1981 this had fallen to 52.2%, and in 2008 22.4%. Absolute numbers fell from 1.9 to 1.3bn.
    World Bank data is at http://iresearch.worldbank.org/PovcalNet/index.htm?1

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  22. Could I chip in again?
    I have come across a 2009 NBER paper with the catchy title "PARAMETRIC ESTIMATIONS OF THE WORLD DISTRIBUTION OF INCOME" (Pinkovskiy & Sala-i-Martin). From page 46 onwards, there are lots of graphs showing estimates from 1970 to 2006. "Figure 26: World Poverty Counts, Baseline" on page 54, is especially relevant to many of the comments. The authors estimate the numbers a people at or below various values of poverty defined in constant purchasing power dollars per day. There are two opposing elements at work here. As the total population grows, so will the total numbers of total numbers at below any poverty threshold. With economic growth the proportion of the global population below a certain level will decline. Population growth precedes the economic growth, but eventually the economic growth causes the absolute numbers to decline. In Figure 26, those on $2 a day or less peaked at around 1.7bn in the 1970s and is now around 0.9bn. Those on $10 a day or less were about 2.9bn in 1970, 4.1bn in 2000 and 3.9bn in 2006.
    (NB the definition of $2 a day is different to the one Prof Pielke uses)
    The paper (860kb pdf), can be accessed here.

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  23. WASHINGTON — New government research has found “large and growing” disparities in life expectancy for richer and poorer Americans, paralleling the growth of income inequality in the last two decades.

    What is clear is that the poorer Americans are living less often as the suffer the diseases of the wealthy. Wealthy and stupid, to be sure, but still wealthy. Diabetes in particular. Fewer and fewer are dying early of the diseases of the poor.

    It's something the world was not prepared for – that in most places few people would starve, but that many would choose to eat badly and forgo exercise of any sort. Like most social plagues, it will work its way out. It's now considered very low rent to smoke, but OK to be fat. I would suggest that is likely to change.

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  24. Mark,

    "Fewer and fewer are dying early of the disease of the poor."

    If you define "death by violence" as a disease of the poor, I'm not sure that's true.

    But to your basic point, you have to understand that in today's America, obesity is the new hunger.

    http://minnesota.publicradio.org/display/web/2012/01/27/hunger-obesity/

    I know, because public radio said so.

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  25. Comment by email from Tom:

    -----------------
    In 1815, news of the Tambora volcano eruption in Indonesia (bigger than Krakatoa) took 2 years to get back to Europe, because the news had to travel by ship. Lewis and Clark traveled by canoe and foot on their epic journey in 1806 or so, railroads were still decades away.

    In 1820, we were still over a century away from antibiotics, people were dying young everywhere. The notion that most people would die in their old age of cancer and heart ailments, in nursing homes and hospices, would have been uncomprehensible.

    I don't know how to compare today and 1820. I don't think statistics are the right way to think about the differences.

    Which may have been Dr. Pielke's point.
    -----------------------

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  26. The British favor the expression 'too clever by half.' Unless you consider yourself an a level with J. Swift, 'modest proposal'-style writing is best avoided. Laying a trap for one's stupid readers flatters neither one's readers nor one's self. Just sayin.'

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  27. ==]] I don't know how to compare today and 1820. I don't think statistics are the right way to think about the differences. [[==

    Well, statistics are certainly not sufficient - but they are useful. For example:


    http://upload.wikimedia.org/wikipedia/commons/thumb/4/48/U.S._incarceration_rates_1925_onwards.png/800px-U.S._incarceration_rates_1925_onwards.png

    Just one metric, just one country, but certainly measuring "progress" is not easily captured by singular or simplistic metrics.

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  28. I read this post as an exercise in 'understand your dataset.'

    I looked at the background data, and it's all price surveys and consumption rates and the daily wage - the consumer/money economy. The natural economy is a tiny niche in 2013, but not so in 1820. How many fish did they have to catch back then to equal $2.00 a day today? Does it even make sense that we can reasonably make any such assertion at all, that (say) catching 1 fish/day is the equivalent of $2.00/day?

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