Friday, May 29, 2009

Poverty: It's All Relative

The reason that so many of my leftist friends want to insist that poverty is always just relative is that any objective measure of poverty leads to the conclusion that capitalism is an outrageous success. Only if you raise the sins of envy and covetousness to the status of the moral virtue "fairness" can you make the case that capitalism causes poverty.

The Transformation of Hunger: The Demand for Calories Past and Present

Trevon Logan, Journal of Economic History, June 2009, Pages 388-408

Abstract: According to conventional income measures, American and British industrial workers in the late nineteenth century were two to four times as wealthy as those in developing countries today. Estimated calorie expenditure elasticities of American and British industrial workers based on the 1888 Cost of Living Survey are greater than calorie elasticity estimates for developing countries today, which suggest that yesterday's wealthy workers were hungrier than today's poor. The result is robust to numerous criticisms. The finding implies an extraordinary improvement in nutritional well-being among the poor in the last century that has not been captured by our income estimates.

1 comment:

Sean said...

The trend of capitalism is for overall wealth increases with one group increasing at a faster rate. Our obsession with finding that relative position and "keeping up with the Jones'" is what turns many to redistributive cries. Marx saw agricultural wages soar 40% ten years after writing the Communist Manifesto and switched his argument saying workers would become poorer relative to capitalists--the rich get richer and the poor get richer but the rich get richer more quickly. It seems society either must have some sort of philosophical revolution or we are doomed to larger, more controlling governments through the will of the majority: the relatively poorer.