(/sites/default/files/uploads/2012/03/kim.jpg)Imagine if President Obama appointed radical Noam Chomsky, who has denounced capitalism as a “murderously destructive catastrophe,” to head up a committee on economic growth. That’s less of a stretch than it may seem, considering Obama’s nominee to head the World Bank, current Dartmouth College President Jim Yong Kim.
Kim’s expertise is in health policy, so little is known about his views on economic development, the World Bank’s primary purpose. What is on the public record, however, is deeply troubling. A case in point is a collection of studies that Kim co-edited in 2000, Dying for Growth: Global Inequality and the Health of the Poor. The grim title accurately reflects the book’s radical central premise, namely that capitalism and economic growth is bad for the poor across the world. The introduction, which Kim co-authored with several other academics, states the point bluntly: “The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.”
In this vein, the authors go on to dismiss “neoliberalism” – the preferred left-wing academic pejorative for free trade and free markets – as a failure, particularly for the world’s poor. “Even where neoliberal policy measures have succeeded in stimulating economic growth, growth’s benefits have not gone to those living in ‘dire poverty,’ one-fourth of the world’s population,” the authors assert.
If economic growth hurts the poor, especially in the Third World, what helps their cause? The book answers that question with a chapter touting what it considers a true success: communist Cuba’s health-care system. As the chapter’s author tells it, Cuba’s health care is supposedly on par with that of the United States, an achievement made “possible because of a governmental commitment not only to health in the narrow sense but to social equality and social justice.” Relying on bogus statistics from the Cuban government and distorting the extreme inequities of Cuban health care, where few of Cuba’s poor can either afford or obtain either medicine or doctors’ treatment, the study is revealing mostly of the ideological extremism of its author. Indeed, it might well have been written by Chomsky, which in fact it was: the author is Aviva Chomsky, Noam Chomsky’s eldest daughter. Noam Chomsky himself is quoted in the book’s conclusion, which cites his dismissal of economic growth as “efforts to make people feel helpless.” The book’s authors, including Jim Yong Kim, seem to agree.
They could hardly be more wrong. In fact, there is overwhelming evidence that economic growth raises income levels, which in turn reduces poverty and improves the lot of the global poor. Much of that evidence has been documented by the World Bank, the very institution that Kim has been tapped to lead. Earlier this month, for instance, the World Bank released a report documenting a decline in the poverty rate of the poor in all the regions of the developing world. The finding is especially striking because it comes amidst a global downturn. Economic growth accounts for much of this astounding progress.
And that progress is truly impressive. In 1990, 52 percent of the population in the developing world lived below the poverty rate of $1.25 a day. That number was halved by 2008, when 22 percent lived below the poverty rate. Progress has been most dramatic in East Asia, particularly China, which has seen the greatest surge in economic growth. In the 1980s, according to the World Bank report, East Asia had the world’s highest poverty rate, with 77 percent of the population living below the poverty rate as recently as 1981. By 2008, that number had plunged to 14 percent. The report points out that in China alone, 662 million people are no longer living poverty. Not only is no one “dying” due to economic growth, but literally millions of lives have been bettered thanks to economic gains.
China may be the most spectacular example of economic growth’s unmatched capacity to improve the lives of the poor, but it is not an exception. Africa, so long associated with extreme poverty, is also making strides on poverty reduction thanks to economic growth. In a 2010 study, economics professors Maxim Pinkovskiy and Xavier Sala-i-Martin found that, as a result of sustained economic growth over the past 15 years, Africa has experienced a consistent decline in poverty – so consistent that, if trends hold, Africa could reach the United Nations’ Millennium Development Goal of halving the number of people earning less than $1 a day between 1990 and 2015 by next year, two years ahead of schedule.
Africa’s success is especially noteworthy because it has not been limited to countries with natural resources, such as South Africa’s diamonds or Nigerian oil. On the contrary, the authors note that poverty has fallen “for both landlocked and coastal countries, for mineral-rich and mineral-poor countries, for countries with favorable and unfavorable agriculture, for countries with different colonizers, and for countries with varying degrees of exposure to the African slave trade. The benefits of growth were so widely distributed that African inequality actually fell substantially.”
Poverty reduction through economic growth is thus one of the great success stories of recent decades. And that work is not done. Even with the recent rate of economic progress, an estimated one billion people across the world will still live on less than $1.25 per day in 2015. Achieving sustained reduction in poverty will remain the great cause of the 21st century.
Yet it’s hard to see how the World Bank will help that cause if led by an open critic of economic growth like Jim Yong Kim. The bank doesn’t lack its critics, to be sure, and there is considerable debate about whether the institution is really effective. But it’s hard to see how its reputation will be redeemed by a World Bank president who seems to believe that the greatest danger to the global poor comes from the only proven strategy to improve the quality of their lives.
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