by
Jason Hickel
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[...] As Britain and France were withdrawing from their colonies, they needed a new way of explaining the gross inequality that persisted between themselves and the people they had ruled for so long. The story of development--that the nations of the world were simply at different positions along the Great Arrow of Progress--offered a convenient alibi. It allowed them to disavow responsibility for the misery of the colonies, and it was more palatable than the explicit racial theories they had relied on in the past. What is more, it allowed them to shift their role in the eyes of the world: graciously relinquishing imperial power, they would turn to aiding their fellow man.
on development as a clever cover story
Anthropologists tell us that when the structure of a core myth begins to change, everything else about society changes around it, and fresh new possibilities open up that weren't even thinkable before. When myths fall apart, revolutions happen.
I absolutely love the last sentence
[...] It's not that the $128 billion in aid disbursements doesn't exist--it does. But if we broaden our view and look at it in context, we see that it is vastly outstripped by the financial resources that flow in the opposite direction. [...]
[...] in 2012, the last year of recorded data, developing countries received a little over $2 trillion, including all aid, investment and income from abroad. But more than twice that amount, some $5 trillion, flowed out of them in the same year. [...] If we look at all years since 1980, these net outflows add up to an eye-popping total of $26.5 trillion--that's how much money has been drained out of the global South over the past few decades. To get a sense of the scale of this, $26.5 trillion is roughly the GDP of the United States and Western Europe combined.
- debt payments: $200 billion/year or $4.2 trillion since 1980
- foreigners repatriating profits (from foreign corporations, or ownership of stocks/bonds): $500 billion/year
- capital flight (misinvoicing and tax evasion strategies, mainly): $23.6 trillion since 1980 ($875 billion/year due to trade misinvoicing)
[...] the discourse of aid distracts us from seeing the bigger picture. It hides the patterns of extraction that are actively causing the impoverishment of the global South today and actively impeding meaningful development. The charity paradigm obscures the real issues at stake: it makes it seem as though the West is 'developing' the global South, when in reality the opposite is true. Rich countries aren't developing poor countries; poor countries are effectively developing rich countries--and they have been since the late 15th century. So it's not only that the aid narrative misunderstands what really causes poverty, it's that it actually gets it backwards. Just as in Truman's time, aid serves as a kind of propaganda that makes the takers seem like givers, and conceals how the global economy actually works.
[...] Poor countries don't need our aid; they need us to stop impoverishing them. Until we target the structural drivers of global poverty--the underlying architecture of wealth extraction and accumulation--development efforts will continue to fail, decade after decade. [...]
[...] global poverty headcount increased during the 1980s and 1990s, while the World Bank was imposing structural adjustment across most of the global South. Today, the extreme poverty headcount is exactly the same as it was in 1981, at just over 1 billion people. In other words, while the good-news story leads us to believe that poverty has been decreasing around the world, in reality the only places this holds true are in China and East Asia. This is a crucial point, because these are some of the only places in the world where free-market capitalism was not forcibly imposed by the World Bank and the IMF. Everywhere else, poverty has been stagnant or getting worse, in aggregate. [...]
There is a strong consensus among scholars that the $1.25 line is far too low, but it remains in official use because it is the only line that shows any progress against poverty--at least when you include China--and therefore is the only line that justifies the present economic order.
[...] Sudhir Anand and Paul Segal show that if we take China out of the Gini figures, we see that global inequality has been increasing, not decreasing--up from 50 in 1988 to 58 in 2005. This is important, because--once again--China and East Asia are some of the only places where structural adjustment was not imposed by Washington. Instead of being forced to adopt a one-size-fits-all blueprint for free-market capitalism, China relied on state-led development policies and gradually liberalised its economy on its own terms. [...]
[...] If a poor country's income goes up from $5,000 to $5,500 (a 10 per cent increase), and a rich country's income goes up from $50,000 to $54,500 (a per cent increase), the Gini index will show decreasing inequality because the income of the poor country is growing faster than that of the rich country, even though the gap between them has grown by $4,000. In light of this, many economists reject the Gini index as an overly conservative measure. It is possible to correct for this bias by calculating the absolute Gini index. Sudhir Anand and Paul Segal have done exactly that and estimate the global inequality rose from a Gini index of 57 in 1988 to 72 in 2005--a dramatic increase.
[...] achieving this level of growth would mean driving global per capita income up to $1.3 million. In other words, the average income would have to be $1.3 million per year simply so that the poorest two-thirds of humanity could earn $5 per day. This gives us a sense of just how deeply inequality is baked into our economic system.
on the only way we can eradicate absolute poverty (defined as $5 per day) while relying on growth (and preserving the current levels of inequality): GDP would have to be 175 times what it is now (which is obviously absurd)
ofc, by that point, if we maintain the current economic system, inflation will have moved the line much farther upward