Re: Heard on BBC Worldwide
Topics: Welfare
29 Jan 2006
From: Ervan Darnell
I skimmed the NEF paper. Here are some points that come to mind:
1) By aggregating the data in the way they did whole world growth versus whole world poverty, they are arguing that growth in the G-7, countries with already low poverty rates, does nothing to lower the poverty rate in 3rd world kleptocracies, which have most of the poverty. Of course not! But they twist the data to argue that this means growth is bad. Their solution is to move G-7 governments closer to 3rd world kleptocracies by creating more interventionist governments.
2) They argue that a redistribution of 1% income in many 3rd world countries would be the same as 20% growth. Even if we accept their figures for the year in question, this is a foolish argument. Since once could have 5% growth for several years on end that would be more useful in the long run. But that 1% redistribution is the same 1% forever (without growth). The other thing is that they are again focusing on the most corrupt 3rd world governments to find these numbers. Those are exactly the governments that would never implement such a plan and the governments for which reform to modern industrial status (if possible) would invalidate NEF's argument.
3) It's not really research, they just grabbed some World Bank poverty numbers and wrapped their own what-if redistributionist scheme around. Their level of data digging is about the same as mine in one of these posts.
4) Much of it is a complaint about environmental degradation and the idea that increased wealth comes at the cost of the poor being unmeasured pollution costs. Thus, their $.60 number is based on a lot of questionable assumptions.
5) Their report even says "Why growth? The positive sum game fallacy". My original complaint that this report comes from zero-sum thinking seems on target.
At 06:45 PM 1/28/2006 , Eric Smith wrote:
>I wrote:
> > Yesterday on BBC Worldwide (one of the few worthwhile channels on
> > XM satellite radio), there was a new item about some organization
> > whose name I don't recall issuing a report stating that economic
> > growth is not an efficient way to combat poverty, as for each pound
> > of growth only 60p goes to ending poverty.
>
>A previous search didn't turn up the organization or its report, but now
>I've been able to find it. The New Economics Foundation has a news item
>on their site about the report:
>
> http://www.neweconomics.org/gen/news_growthisntworking.aspx
>
>You can download a PDF of the report itself, "Growth Isn't Working: The
>Uneven Distribution of Benefits and Costs from Economic Growth":
>
> http://www.neweconomics.org/gen/z_sys_publicationdetail.aspx?pid=219
>
>I have not yet had time to read the report, but I must have misheard the
>BBC reporter, as the claim is that there is only 60 cents of poverty
>relief for every HUNDRED dollars of economic growth. On that basis,
>I retract my second and fourth questions.
>
>Eric
>
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====================================================
Ervan Darnell
ervan@kelvinist.com http://www.kelvinist.com
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