It’s one of the greatest achievements in human history — and no one is talking about it

As a child of the 80s, I remember We Are the World. Yeah, the song is terrible, but it was nice to see rock stars care about charity. Back then poverty in Africa was in the news all the time. But things have been changing in Africa and in other “third-world” countries. More countries are opening up their markets. China, Russia, India, and Botswana are all much freer economies than they were in 1970.

But even I was shocked when I saw this graph:

worldpoverty2

 

Mark Perry, an economics professor at UM-Flint said it best:

Well, the chart above could perhaps qualify as the “chart of the century” because it illustrates one of the most remarkable achievements in human history: the 80% reduction in world poverty in only 36 years, from 26.8% of the world’s population living on $1 or less (in 1987 dollars) in 1970 to only 5.4% in 2006. (Source: The 2009 NBER working paper “Parametric Estimations of the World Distribution of Income,” by economists Maxim Pinkovskiy (MIT) and Xavier Sala-i-Martin (Columbia University).

Wow. An 80% drop in world poverty since 1970. Just astounding.

And if you have a few minutes, you really must watch this video… It explains why great data like we see up above is NOT enough to persuade people to move away from socialism and central planning. We need a moral argument for the free enterprise system.

As Arthur Brooks says: Don’t Eat Your Dog.

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Categories:Economy

14 thoughts on “It’s one of the greatest achievements in human history — and no one is talking about it

  1. Joe says:

    So what’s the impact of inflation on that $1.00 since 1970? Less than a minute’s research points me to roughly 1:5. In other words, your $1 in 1970 is about $5.00 in 2006. What would the graph look like with that adjustment? I’d be really glad if things really did improve but making claims based on incorrect data doesn’t do it for me. Don’t take my word for it. Check the figures yourself. Here’s one inflation rate impact calculator http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=1970&year2=2006

    1. J M says:

      Actually the graph is labeled as using 1987 dollars so you are looking at about 1.77$ now not 5$

    2. John Monroe says:

      The heading says “in 1987 dollars”. The numbers have been adjusted for inflation.

  2. Eric Maurer says:

    Simultaneously, the US tried to fix poverty with handouts. “Fifty year and $20 trillion later, LBJ’s goal to help the poor become self-supporting has failed.” From today’s WSJ: http://online.wsj.com/news/articles/SB10001424052702303345104579282760272285556

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