What is Poverty?: "The Disappearance of the Third World"

In my second book, Faith in the Future: Christianity's Interface with Globalization, I argued that this latest round of globalization (Globalization 3: 1991-present) was ushering in "the disappearance of the Third World."  By this, I meant that we now live in a world where the vast majority of people live decently, if not comfortably in many of the places we used to call "Third World."  The fact is that the average human being today lives longer and healthier than at anytime in human history.  "After thousands of years of virtually no fluctuation, the world's per capita income has exploded since 1800; it is nine times greater today.  While it is true that the rich are getting richer and the gap between the richest and the poorest is widening, it must be noted that the poor themselves are also getting richer" (p. 29).  Today, 70% of the world's poor live in middle-income countries.  That's a huge difference from the world I was born into where most of those middle-income countries were totally poor, "Third World" nations with a wealthy class that was practically unmeasurable.

By this, I do not mean that there are not poor people or poor countries.  What I do mean is that the stagnant view of entire countries being locked in absolute poverty ("poor China," "poor India," "poor Nigeria") is out-moded.  We now live in an era where a country of 1 billion peasants (who were suffering famines and eating tree bark around the time I was born) now have the 2nd largest economy in the world:  China. Just think about that for a second.  The world has changed so that countries can be more quickly upwardly mobile, and most populations in the world do have access to enough food and money--if man-made conditions are right as opposed to the old age where poverty was the norm despite what man did.

Recently I told someone that apartment prices in Luanda, Angola were like  Hong Kong or Paris.  I mentioned rents of $2,000 per month.  Well, I just read an article today saying that rents in some apartments in Luanda are now at $40,ooo per month.  Why? Because of Chinese investment and oil discoveries.  Now of course, Angola is filled with poverty--but it is also increasingly filled with modernity and wealth even amongst the Africans themselves.  Because of this latest round of globalization, it is hard for whole countries, and large swaths of those countries populations to truly be disconnected and poor with no food.

Having been in shanty towns in Zambia, Kenya, China, Guatemala, India and many other places--I'm very aware that poverty exists.  Had I not been adopted, I could be in a shantytown now--if I had even survived my severe case of malnutrition. But today's poverty is often the result of bad governance, personal choice, or cultural factors rather than being the result of a pre-technological age of food scarcity. India has been able to feed its 1 billion people for the past 20 years, but 80% of the food supply is lost to corruption.

In all of these places, you will often find a booming, underground economy full of entrepreneurship. Of course there are places like Somalia, Central African Republic, and Afghanistan--but once again, this is primarily human-inflicted poverty as opposed to man living in areas that are incapable of providing for people. Even Somalia and the barren parts of Ethiopia could survive and thrive in the harshness of the climate in ways that were not possible in say 1700 or even 1980.

Or a quick way to say this is:  the poor people of centuries past would recognize each other, but they would not recognize the majority of today's global poor.

With so many people still calling for huge financial aid packages to third world nations, a study was recently done to find out what poverty really is in the 21st century.  They used a far more nuanced approach to examining poverty which goes in line with where I am at.  An excerpt from Foreign Policy:


"One reason the poverty trap might not exist is that most people have enough to eat. We live in a world today that is theoretically capable of feeding every person on the planet. In 1996, the FAO estimated that world food production was enough to provide at least 2,700 calories per person per day. Starvation still exists, but only as a result of the way food gets shared among us. There is no absolute scarcity. Using price data from the Philippines, we calculated the cost of the cheapest diet sufficient to give 2,400 calories. It would cost only about 21 cents a day, very affordable even for the very poor (the worldwide poverty line is set at roughly a dollar per day). The catch is, it would involve eating only bananas and eggs, something no one would like to do day in, day out. But so long as people are prepared to eat bananas and eggs when they need to, we should find very few people stuck in poverty because they do not get enough to eat. Indian surveys bear this out: The percentage of people who say they do not have enough food has dropped dramatically over time, from 17 percent in 1983 to 2 percent in 2004. So, perhaps people eat less because they are less hungry.

And perhaps they are really less hungry, despite eating fewer calories. It could be that because of improvements in water and sanitation, they are leaking fewer calories in bouts of diarrhea and other ailments. Or maybe they are less hungry because of the decline of heavy physical work. With the availability of drinking water in villages, women do not need to carry heavy loads for long distances; improvements in transportation have reduced the need to travel on foot; in even the poorest villages, flour is now milled using a motorized mill, instead of women grinding it by hand. Using the average calorie requirements calculated by the Indian Council of Medical Research, Deaton and Drèze note that the decline in calorie consumption over the last quarter-century could be entirely explained by a modest decrease in the number of people engaged in heavy physical work.

Beyond India, one hidden assumption in our description of the poverty trap is that the poor eat as much as they can. If there is any chance that by eating a bit more the poor could start doing meaningful work and get out of the poverty trap zone, then they should eat as much as possible. Yet most people living on less than a dollar a day do not seem to act as if they are starving. If they were, surely they would put every available penny into buying more calories. But they do not. In an 18-country data set we assembled on the lives of the poor, food represents 36 to 79 percent of consumption among the rural extremely poor, and 53 to 74 percent among their urban counterparts.

It is not because they spend all the rest on other necessities. In Udaipur, India, for example, we find that the typical poor household could spend up to 30 percent more on food, if it completely cut expenditures on alcohol, tobacco, and festivals. The poor seem to have many choices, and they don't choose to spend as much as they can on food. Equally remarkable is that even the money that people do spend on food is not spent to maximize the intake of calories or micronutrients. Studies have shown that when very poor people get a chance to spend a little bit more on food, they don't put everything into getting more calories. Instead, they buy better-tasting, more expensive calories."


The point is that 20th century technologies, combined with better government, and medical and environmental breakthroughs are making pre-20th century poverty obsolete.  This is not to say that the poor don't matter, or that it's their fault.  Rather it is an indictment against the simplistic "Live Aid" approach to poverty:  Raise $50 million and give it to Ethiopia because they are all starving.

In today's world, dealing with poverty means factoring in a lot of human elements in a nuanced way.  Rarely is the problem simply a lack of food and opportunities.  And rarely is the best solution simply giving money.