Number of People in Extreme Poverty Drops to Record Low

CascadeNewLogoBy Steve Buckstein

Malthus must be turning over in his grave after the World Bank announced this month that the percentage of the world’s 7.3-billion-plus people living in extreme poverty is likely to fall to a record low this year of under 10 percent.

Using an updated international poverty line of US $1.90 a day, the Bank projects that “global poverty will have fallen from 902 million people or 12.8 per cent of the global population in 2012 to 702 million people, or 9.6 per cent of the global population, this year.”

The Bank’s president attributes this good news to “strong growth rates in developing countries in recent years, investments in people’s education, health, and social safety nets that helped keep people from falling back into poverty. He cautioned, however, that with slowing global economic growth, and with many of the world’s remaining poor people living in fragile and conflict-affected states, and the considerable depth and breadth of remaining poverty, the goal to end extreme poverty remained a highly ambitious target.”

An ambitious target, for sure. But it is refreshing to learn that strong growth rates are recognized as an important part of the formula to end poverty. As Cato Institute’s HumanProgress.org blog notes,

“The key to the improvements in the lives of ordinary people over the last 200 years were industrialization and trade, which generated historically unprecedented rates of growth. And the importance of growth cannot be overemphasized. There is not a single example of a country emerging from widespread poverty without sustained economic growth.”

Most Americans never experience the kind of extreme poverty other parts of the world are trying to climb out of. But it would be nice if more of us, including our elected officials in Washington, D.C. and Salem, understood that economic growth, generated by a system of free markets and property rights in a capitalist economy, is a necessary condition to improve living standards.

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Posted by at 05:00 | Posted in Economy, Free Trade | Tagged , , , , , | 10 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Dick Winningstad

    Good for the world. And the spread of property rights with a market economy will help even more.

  • Bob Clark

    When folks become materially better off they tend to have fewer children, and it seems material wealth precedes the having of fewer children (roughly speaking). Fewer people than otherwise should lead to less material resource draw and extraction, as per capita material wealth increases are more than offset by the multiplier of total population. A prosperous economy may be the best environmental tool in the tool kit. (Unequal economic outcomes allow the signals for the efficient allocation of resources, making Equity of dubious merit.)

    • guess who

      Ah yes, the silk purse made of the pigs ear

    • DavidAppell

      Bob Clark wrote:
      “A prosperous economy may be the best environmental tool in the tool kit.”

      The data show that to be false. The affluent of the world create more pollution, more garbage, and more carbon, and then in the US they whine about paying for it.

  • Jack Lord God

    It’s funny, as socialism is in decline world wide, world prosperity grows. As socialism gains a final foothold in America, we have more people not working than ever before, wages falling, more children in poverty than when Obama took office. The “I’m so science” crowd must be quite annoyed. The facts are unarguable, the history complete, capitalism lifts people out of poverty, socialism perpetuates it.

    • DavidAppell

      You presented no “facts” — just generalizations that accord with your political biases.

      Let’s see you prove something for once: your claim that “we have more people not working than every before.” Then explain why it’s a bad think that some people go back to school, retire, or decide to spend more time with their children and grandchildren. There is more to life than work, work, work.

      Some data for you to start:

  • DavidAppell

    Free markets don’t bring this growth — regulated markets do.

    There wasn’t much growth in the Great Recession, was there, caused by a lack of Wall Street oversight?

    • Along the sway to DA’s Forum

      Left wing nuts believe Mother Earth ought be flat as water with no economic features other than nipple oasis provided for orgasms seeking landfall.

    • thevillageidiot

      Oh how little you know about free markets. stick to global warming.

      • Markit Place

        Appell’s core values can be profound at a nerd buy RM store.

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