I’ve got a new post over at Novel Stance about putting the “economic anxiety” of the Western working class in the greater context of global income trends. A couple excerpts:

Whatever legitimate economic anxiety Brexiteers and Trumpkins have from the last few decades of increasing globalization, it is dwarfed by the historic rise in living standards nearly everywhere else in the world.

In a sense, we can think of the “Western working-class” being pushed aside by an “Emerging Market working-class.” Emerging market economies like China, India, Brazil, and Indonesia are building their own middle classes, simultaneously lifting hundreds of millions out of poverty and displacing the Westerners that used to do that work.

Will Wilkinson:

If, like [Peter] Singer, we are utilitarians, we need not be too vexed by the problem of identifying the best morality. The best morality–the one that produces the largest sum of happiness–is the morality of liberal market societies.

I find Wilkinson’s argument compelling, because liberal market society is the main source of moral progress in the modern world (some people disagree, but I think this is pretty obvious). As Peter Singer and many others have convincingly argued, global poverty is one of the most important ethical issues of our time. Innocent people (including children) suffer and day everyday from preventable causes, such as hunger, disease, and lack of clean water. Singer, being a utilitarian, argues that we all must give substantially more money to charity than we currently do. This seems right. But consider the historical evidence on people escaping severe poverty. How many lives have been saved by the kinds of charitable donations that Singer advocates? Relatively few. How many lives have been saved by societies transitioning toward market liberalism? An astronomical amount. In China alone, virtually the entire population (at the time just under one billion) was in severe poverty at the end of the Cultural Revolution in 1976. Thirty-five years later, according to Singer, just over 200 million Chinese (out of a population of about 1.3 billion) are living on less than $1.25 per day. In China alone, a shift toward market liberalism has brought many hundreds of millions of people out of severe poverty in just a few decades. So if you care about poor people, spreading market liberalism seems like the way to go more so than donating to charity (although the two are not, of course, mutually exclusive).

However, there’s good reason to think that consequentialism and the  morality that serves as the foundation of market liberal societies are mutually exclusive, because the morality of market liberalism is not consequentialist. As David Schmidtz points out, the utility-promoting institutions of market liberal societies depend in large part on their ability to create “conditions under which people can trust each other not to operate in an act-utilitarian way.” Effectively promoting utility depends largely on not acting on the motivation to promote utility.

New statistics on poverty in the United States were released a couple of days ago. Like most news about the economy for the past few years, it’s not good:

.  46-million Americans, roughly one in six, live in poverty

. 49.9-million Americans lack health insurance, up 13.3 million since 2000. 

. The U.S. can boast the highest overall poverty rate of any major industrialized nation; not surprisingly, it also has the highest childhood poverty rate.

. 21.6 percent of American children (that’s more than one-in-five) live in poverty.  Compare that to Denmark, where the number is 3.7 percent.

Depressing. A crucial point about how the Census Bureau calculates poverty statistics, however, is that a lot of anti-poverty programs aren’t taken into account. Only pure cash transfers, like the Earned Income Tax Credit, can affect the official poverty rate statistics. Programs like Medicaid and food stamps are ignored.

This is a problem because poverty rate statistics are used to inform policy debates about anti-poverty programs. But if the effects of many anti-poverty programs are ignored when these statistics are calculated, it significantly limits their usefulness. The numbers quoted above are not directly from the press release about the new poverty statistics. Rather, they were gleaned from a report by Sen. Bernie Sanders. Unsurprisingly, Bernie argues in the report that we are failing the nation’s poor and that we need to protect and improve anti-poverty programs. From the report’s conclusion:

As we look for solutions to reduce our nation’s debt, we must be cognizant of the effects of cutting social safety net programs. Choosing a path that impoverishes hundreds of thousands of people will result in unexpected yet largely predictable expenses in other parts of the budget. Knowing the potential impact of budgetary choices on the lives of individual Americans should help guide us to make not only the morally correct decisions, but also the financially responsible ones.

It would be much easier to be “cognizent of the effects of cutting social safety net programs” and know “the potential impact of budgetary choices on the lives of individual Americans” if these concerns were reflected in the official poverty statistics. But they’re not. We could double the food stamps program between now and the next time poverty statistics are released, and it would change nothing.

Given the state of the economy (especially high unemployment), you don’t really need statistics to tell you that people are struggling and that anti-poverty programs are needed even more now than they were a few years ago. But sound decision making relies on sound information, and in that respect, official poverty statistics as they are currently calculated fall short.

Matt Yglesias is worried about what climate change will do to poor farmers in the developing world:

Farmers have particular land and particular crops they’re accustomed to growing. When the climate shifts, they’ve got a problem. Initially it won’t be an insurmountable problem for farmers in rich countries who’ll be able to draw on a lot of technical resources to try to adapt. But for poor peasants in the developing world, their livelihoods will be ruined quite rapidly.

My understanding is that, sadly, this is true: climate change will have its most damaging effects on countries that are closer to the equator.  The vast majority of these countries are poor.  Yglesias goes on:

[I]t’s worth attending to the problems of the third world and the ethical issues it raises. I doubt many members of the Chamber of Commerce would, if faced with a starving Namibian family on their front doorstep, just refuse to give them any food and say “hey, I’m greedy, get over it.” But when the climate shifts, there will be crop failures and famines and people will die. And the people preventing action to stop that outcome are doing it because it would be financially inconvenient. So how different is that?

The starving family on the doorstep example greatly understates the complexity of the ethical challenge that climate change poses.  Any climate change mitigation policy that actually succeeds in slowing climate change by enough to have a noticeable effect on the well being of subsistence farmers in the developing world will significantly retard economic growth around the world (global collective action is required for any climate change policy to work).  Unfortunately, this is bad for residents of developing countries because it reduces the export demand for their products, making it more difficult for them to rise out of poverty.

So the ethics of the effect of climate change on farmers in poor countries ends up hinging on a comparison of the cost of climate change with the cost of slower economic growth.  Because of all the uncertainties in the science (granting that there’s scientific consensus about the existence of global warming, the exact amount of warming and the extent of the future damages caused by warming are not clear), this is a difficult calculation to make.

Yglesias’s example does help to illustrate that there are moral demands upon the world’s privileged to help the world’s poor, even if the poor are far away.  But the best way to meet this demand is to donate money to charity, or perhaps to lobby for increased legal immigration and an end to farm subsidies (which indirectly hurt poor farmers).  There are just too many uncertainties for climate change action to be a sensible way of fulfilling our moral obligation to help the poor.

“The rich are getting richer and the poor are getting poorer”, self-proclaimed critics of globalization – by which I assume they mean economic liberalization – often argue. While the world hasn’t exclusively seen trade and markets liberalized everywhere, and poverty hasn’t decreased in every village and tribe around the world, there has undoubtedly been a strong move towards economic liberalization in the last thirty or so years. Coinciding with this has been:

Furthermore, by region:

What can we attribute the tremendous dip for “East Asia” to? Has China become more protectionist? Has India increased regulation of industries? Has Singapore dramatically increased wealth distribution? Generally speaking, no. These countries have all shifted away from collectivist, planned economies and more towards market-based systems.

Some regions have improved more than others. Some places are worse off than they were a few decades ago. Fine, blame the IMF, World Bank, or western corporatism. But this doesn’t negate the fact that “globalization” has decreased the number living in poverty by 400 million (even though world population grew).

A paper by Maxim Pinkovskiy and Xavier Sala-i-Martin remarks:

Using the official $1/day line, we estimate that world poverty rates have fallen by 80% from 0.268 in 1970 to 0.054 in 2006. The corresponding total number of poor has fallen from 403 million in 1970 to 152 million in 2006.

Globalization might not be as glorious of a story as its supporters say it is, but those numbers are hard to argue with. “Poor getting poorer”?