The End of Poverty — Revisited

To a previous piece , “The End of Poverty“, my friend Indradeep added a few thoughtful and thought-provoking comments. I take him seriously since he’s a fellow member of my tribe (namely, economists). In the following, I will do my best to address the points that he has raised. But first, here’s what I wrote in summary in my piece:

Technology is advancing at an exponential pace. Therefore the cost of energy will continue to drop. Therefore the cost of production of stuff will monotonically decrease, until a point that it will be practically close to zero. Therefore all the basics of life will be available for consumption at zero price. Therefore extreme poverty will be solved. This will happen in about 15 years.

I reproduce Indradeep’s comment here for reference:

Hard to argue with the idea that technology will reduce cost to near-zero levels. But the rest of it borders on wishful thinking. Especially, the expectation that some system of distribution will magically appear, sounds almost as sanguine as the familiar and now roundly discredited argument advanced by free-market fanatics that free trade is surely beneficial and the matter of how the winners compensate the losers is only a minor wrinkle that we do not need to worry about. Political economy, voice, agency – these things are nowhere in the picture. Does not a system of representation of voice have to precede the appearance of a system of distribution? If the rich have no intrinsic interest in alleviating poverty, how will that first system come into existence?

Let’s examine the “now roundly discredited argument advanced by free-market fanatics that free trade is surely beneficial”. Continue reading

The Growth of Inequality

In the context of exponential technological growth (a topic that I explored in the piece “The End of Poverty“), Akshar asked in his comment, “Don’t you think the gap between a poor person in India and a poor person in say USA would only increase ?”

Yes, I think that the gap will only increase with time. But that is just part of a broader trend of increasing inequality in numerous dimensions — within and between nations. In technical terms, the Gini coefficients (a measure of inequality, where 1 means perfect inequality and 0 means perfect equality) will continually increase.  Continue reading

The End of Poverty

This is an optimistic piece — a rarity for sure around this blog. Here I claim that in 15 years or so, extreme poverty which afflicts around one billion people, mainly in the so-called third world, will be eradicated. That problem has plagued mankind since the beginning but the end is in sight.

Technology

Global extreme poverty will be eliminated as a side-effect of technological advances, primarily made by people who probably neither care about poverty nor do they intend to solve that problem. Which is good news for India. India has the largest number of people suffering extreme poverty in the world. Around half of the billion extremely poor people of the world live in India.

There are two kinds of problems. There are hard problems and there are impossible to solve problems. Given time, with advances in knowledge, all hard problems will be solved. Poverty is a hard problem but not an impossible problem since in many parts of the world it has been solved for all practical purposes. The critically important key to eradicating poverty is knowledge.

Knowledge

Knowledge is what economists call a “public good.” Once produced, knowledge can be repeatedly used without diminishing the available stock. It is “non-rival” in consumption. Technology increases monotonically because of the accumulation of knowledge. And technology (which is essentially knowledge of how to do something) developed somewhere gets adopted in the rest of the world with surprising rapidity. It is very cheap to use once developed.

Consider the cell phone, internet and computer technologies that were developed in the Western economies (they are called developed economies partly because they developed technology) but those advances spread to every part of the globe. Just like the computation and communications technologies, it will be people in rich countries who will develop the technology to eliminate poverty in poor countries, albeit not by design nor intent.

That means India’s dire poverty will be solved not by Indians — least of all by the insanely inept, criminally corrupt government of India which is arguably the fountainhead of India’s poverty — but by others. I note in passing that India’s telecommunications problem was created by the government but it was solved using foreign technology.

In the following I conjecture how the end of poverty will happen.  Continue reading

AMA – the Ducklings Rescue Edition

Welcome to 2018. The past year was good but this one is likely to be much better. I think in 2018 I will get a good deal of stuff done. One of the major tasks is the cleaning up of this blog. There’s too much stuff here, some of which needs to be sorted, rewritten, polished up and published.

I will write more frequently. Also, I will post interesting videos, and extended quotes, audio, etc. Here’s a quote from Frank Herbert’s “Chapterhouse: Dune.” (1985):

All governments suffer a recurring problem: Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible.

Humans do bad stuff. But not all the time. Sometimes they are good. They become superheros and rescue a brood of ducklings. I wonder how did they fall into the storm drain in the first place, considering the fact that ducklings are precocial — they are born with eyes wide open and are able to fend for themselves within hours of hatching.

Anyway, this is the first ask me anything this year. What’s on your mind?  Continue reading

Censorship on the Internet

Freedom of speech, expression, and the press is a distinctive mark of civilization. It distinguishes — and indicates the degree of civilization achieved among — the nations of the world. Nations that valued the Enlightenment traditions of the likes of Kant and Voltaire prospered and became culturally (not to mention militarily) powerful enough to profoundly impact, and indeed create, the modern world.

Just compare where the Islamic nations are in relation to the Western nations in terms of social, cultural and economic well-being. The Islamic nations fail miserably. They languish in the bottom of the heap suffering terrorism and imposing it on the rest of the world. Part of the explanation must be that their civilization lacks the freedom of speech and expression.

“Congress shall make no law …”

And consider that the most powerful nation in the world, the United States of America, is what it is partly because of the wisdom of its Founding Fathers who included the critically important First Amendment in the “Bill of Rights” of the US Constitution which says, in part, “Congress shall make no law … abridging the freedom of speech, or of the press …”.

Say what you may (and you may say whatever pleases you) but I am a freedom of speech fundamentalist. It is non-negotiable, it is off the table, it is not for sale, trade, barter or exchange. I reserve the right to say whatever I wish, and I defend your right to say whatever you wish. And equally importantly, I reserve the right to choose to hear, read and watch whatever others freely choose to express in whatever form. The operative word is choose. You choose to speak, and I choose to hear, without compulsion on either side.

Freedom

I recognize no authority over me that will dictate to me what I may say or listen to, read, write or watch. I will resist any government that attempts to take away my right to free speech, and the corresponding right to listen to the free speech of others.

Now that I have expressed my position on the matter, let me get down to why I did so. Continue reading