Diseases of Poverty: Neglecting the Obvious
Before blogging Ebola, I’ve been reading up on the broader category of “diseases of poverty.” The low-point of the Wikipedia entry:
There are a number of proposals for reducing the diseases of poverty and
eliminating health disparities within and between countries. The World
Health Organization proposes closing the gaps by acting on social
Their first recommendation is to improve daily living conditions. This
area involves improving the lives of women and girls so that their
children are born in healthy environments and placing an emphasis on
early childhood health. Their second recommendation is to tackle the
inequitable distribution of money, power and resources. This would
involve building stronger public sectors and changing the way in which
society is organized. Their third recommendation is to measure and
understand the problem and assess the impact of action. This would
involve training policy makers and healthcare practitioners to recognize
problems and form policy solutions.
On etymology alone, you’d think that economic growth – i.e., producing more wealth per person – would top the list of cures for “diseases of poverty.” But it isn’t even mentioned. Instead, we get to choose between:
1. Targeted redistribution to women and children.
2. General redistribution/bigger public sectors.
3. Better policy evaluation and training of policymakers and health workers.
It’s almost like the last two centuries never happened. Quick recap: During the last two hundred years, living standards exploded even though the distribution of income remained quite unequal. How is such a thing possible? Because total production per person drastically increased. During this era, no country escaped dire poverty via redistribution, but many escaped dire poverty via increased production. And while the effect of moderate redistributive policies on growth is unclear, there is no doubt that populist and socialist movements determined to “tackle the
inequitable distribution of money, power and resources” and “change the way that society is organized” sharply retard growth. As I told the Gates Foundation when they asked for my input:
serious about reducing world poverty must come to grips with a single key fact:
Redistribution from rich to poor has not and cannot solve more than a tiny
fraction of the problem. Even if you
could perfectly equalize income in
Third World nations with zero effect
on production, the citizens of Third World countries would remain mired in
poverty. Take Bangladesh. With a GDP of $256B and a population of 164M,
equalization would at best give each citizen an income of $1561 per year –
about $4 a day. Countries do not overcome
poverty by sharing production more equally.
They overcome poverty by increasing production – what economists call “economic
Diseases of poverty are sadly real, but happily curable. Avoiding populism and socialism is a good first start. Economic freedom, especially for reviled multinational corporations, is also vital. And if First World countries want to lend a hand, nothing cures global poverty faster than open borders.