Kruse Kronicle

Calmly Considered: Does Social Security Have a Future?

On this episode of "Calmly Considered," Michael and Allan discuss the sustainability of Social Security and the necessity of seeking the common good.

Calmly Considered: 2022 Review, 2023 Preview

Allan Bevere and I look back at 2022 and forward to 2023.

The Middle Class is Disappearing ... Into the Upper Class

U.S. Census Bureau recently released time-series data on household income. All data in the following chart is pegged to 2010 dollars, which is adjusted for inflation - a dollar in 1970 buys the same as a dollar in 2020.

The Census Bureau divides the income distribution into nine segments and three broader categories:

• Poor: $0 - $35,000 (again, 2010 dollars)
• Middle Class: $35 - $100,000
• Rich: $100,000 - and up

Source: Economist Anthony Davies

The percentage of households in the low and middle-income segments has declined while the percentage in the high-income segments has increased. Furthermore, over these fifty years, the average number of people living in a household has been steadily shrinking the further down the income distribution we go and increasing the further up we go. Not only are there more wealthy households, but more people are living in those wealthy households.

The middle class is disappearing into the upper class. I am not making any policy statement here. I am saying that policies based on the perception of the middle class being driven into poverty - "the rich are getting richer and the poor are getting poorer - are demonstrably wrong.

Calmly Considered: Global Living Conditions-- Better or Worse?

Are global living conditions getting better or worse?

There are three simultaneous truths:

1. Living conditions are awful for a great many.
2. Living conditions are better than they ever have been, by far.
3. Living conditions can be improved and the trajectory is in a positive direction.

Join Allen Bevere and me as we calmly consider global living conditions.

The Future of Black-Owned Enterprises

The rate of Black entrepreneurship has always been lower than for other communities due to systemic and overt racism over past generations. This CNBC piece does a good job explaining the ongoing obstacles faced by Black-owned enterprises.

The World Is Becoming A Better Place To Live For Most People

The great majority of people throughout most of human history have precariously been able to subsist. (See Level 1 below.) A great divergence began just over two centuries ago. Global life expectancy at birth has more than doubled, and abject poverty as a percentage of the population has declined. 

The average life expectancy at birth used to be about 30 years. That doesn't mean no one lived to old age. One in four children born alive died before their first birthday, so the average life expectancy at birth was skewed downward. But life expectancy at every age has improved, especially over the past century.

The researchers at Gapminder have constructed this informative chart showing anticipated improving economic status over the next twenty years. (These numbers attempt to account for changes in the value of "a dollar" over time and across national borders.) Each block equates to 100,000 people. As you can see, the population is larger in twenty years, but a higher percentage of people have moved rightward on the continuum to greater prosperity. Many people find these numbers too abstract. What does this mean in practical terms? Gapminder has constructed this helpful chart to describe what life is like at the four levels. 

You can learn more about these four levels here. 

Three truths. The world has become profoundly better in recent generations and is improving. There is much suffering and injustice as vast room for improving our world. We can make the world a better place.

Globalization. Its Passing Has Been Greatly Exaggerated

From researchers Steven A. Altman and Phillip Bastian:

Despite recent trade turbulence, the ratio of gross exports to world GDP is still remarkably close to its all-time high. Even after falling from a peak of 32% in 2008 to 29% in 2019, this measure of global trade integration is still 20% higher than it was in 2000, twice as high as it was in 1970, and almost six times higher than in 1945. ... Globalization can go into reverse—as demonstrated by the trendlines between the 1920s and 1950s—but recent data do not depict a similar reversal. ...

[T]he world is—and will remain—only partially globalized. Globalization can rise or fall significantly without getting anywhere close to either a state where national borders become irrelevant or one where they loom so large that it is best to think of a world of disconnected national economies. All signs point to a future where international flows will remain so large that decision-makers ignore them at their peril, even as borders and cross-country differences continue to make domestic activity the default in most areas.

Economist Timothy Taylor reviews the report and offers other insights: What's Happening with Global Connectedness in the Pandemic?

Why Population Control Is Not The Answer to Climate Change

Population control is sometimes championed as a way to fight climate change. Bernie Sanders recently raised this idea. The world population is growing. There are 7.7 billion people today. According to United Nations estimates, there will be nearly 11 billion in 2100. Extra people mean extra CO2 emissions. While two children per woman may seem reasonable, women in the poorest countries can average five or sex. Sanders and others believe this excess fertility is why the world population is growing. Fewer children will mean less CO2. Unfortunately, this perception is decades out of date.

We are already at "peak children." Globally, there are 680 million children under the age of five. U.N. projections show a peak of 700 million in about 2060. There are projected to be 650 million children in 2100, fewer than today. Yet the overall population will grow by nearly 50%. How can that be? The compounding effect of people already born will drive population growth over the next century, not excessive birth rates.

Trends in Fertility

Assume women have two children over their lifetime. They replace themselves and one other. Population size will be stable from generation to generation. (The actual replacement fertility rate for an affluent nation is 2.1 children per woman.) Throughout history, the total fertility rate has been six or seven children. One-quarter of children died before their first birthday. Another sizable percentage died before age five. Many of those who made it past five died before marrying and having children. High fertility rates ensured a couple of children would survive to continue the family.

As affluence emerged and health practices changed (first in Europe and then spreading elsewhere), more children survived into adulthood. We needed fewer births to perpetuate a family, but it took a while for customs related to fertility to adjust downward. That lag between declining death and fertility rates led to the population explosion that began two centuries ago. That growth accelerated into the twentieth century and continues into its final stages today. As recently as the 1960s, the global total fertility rate was as high as five children per woman.

Today, the global total fertility rate is about 2.4 and dropping, but the rate is not evenly spread worldwide. Europe, the Americas, China, Japan, and other regions have fertility rates below the replacement rate, well below it in many nations. A handful of smaller poor countries have fertility rates of five or six, but they also have some of the highest child death rates. The world average is fast approaching the 2.1 replacement rate. However, because the global fertility rate has usually been higher than the replacement rate for most of us now living, it means the cohort of people born one year is usually larger than those born the previous year. So let us think about what that means for the future.

The Compounding Effect in Future Fertility

To keep things simple, assume going forward that we birth the same number of children each year, the death rate stays the same, and no one lives past one hundred years. Now say there are 100,000 people aged 100. By next year, all will have died. The group that was 99 will now be 100. Because more of them were born, there will now be maybe 105,000 people 100 years old. After two years have passed, the new group of 100 hundred-year-old people will be the people who are 98 years old today. They will be a still larger group. That will continue for one hundred years.

At the other end of the age continuum, we have the largest number of children ever born in a year and the largest age cohort alive. A year later, this youngest age cohort will replace a smaller cohort a year older than them. But keep in mind that the number of women of childbearing age will increase yearly for the next forty-five years. Therefore, each year the total fertility rate will need to fall slightly below the replacement rate if the population is to stabilize. It can then rise to the replacement rate after forty-five years. This will continue until 2120, when each age cohort is the largest age cohort that has ever existed for that age. This is the primary driver of population growth in the future, but there is at least one other key factor. (Clearly, I am oversimplifying to illustrate my point. We are not down to replacement rate fertility, so there is still some marginal population growth due to "excess" fertility.)

Furthermore, actual global death rates are not constant. They are dropping. People are living longer. So not only is each age cohort larger than before, but it is also living slightly longer. This, too, contributes to population growth over the coming decades.

Therefore, we would need considerably less than replacement-rate fertility to limit global population growth substantially. In fact, there are credible projections of a population peak of fewer than nine billion. Demographers once assumed transition to low fertility and death rates would stabilize at about the replacement rate. Instead, the fertility rate has dropped well below the replacement rate in nearly every affluent nation, in some cases nearly one child per woman. This may look like a good thing from the narrow view of CO2 emissions. From a holistic standpoint, many social scientists are troubled. Depopulation can be as destructive to human well-being as overpopulation.

The Depopulation Problem

A vibrant society needs a critical mass of productive workers relative to its dependents (primarily children and the elderly.) This is the dependency ratio (dependents divided by workers multiplied by 100). With excessively low fertility rates, it is possible to have a great imbalance with many seniors and too few workers to provide for society. We have already seen that current U.N. projections say we will have nearly the same number of children now as in 2100, but the overall population will be almost 50% larger at eleven billion. That growth is a consequence of a burgeoning number of elders. A smaller population of nine billion may mean fewer total people but an even worse dependency ratio.

Modest help may come from lengthening the number of years people work or a higher participation rate in the workforce for working-age people but at some point, that will be insufficient. Then consider the possibility of medical breakthroughs that cure cancer or dramatically reduce heart disease. That means more people living longer, intensifying the dependency ratio imbalance.

As an ever-shrinking number of people (potentially a minority of the population) is expected to support everyone else, improving living standards will begin to stall and possibly reverse, making the world ripe for any societal dysfunctions. It will not take eighty years for this challenge to become real. Japan is already struggling with these issues. China is already headed down this road. One can envision China opening up to immigration from the remaining regions with the highest fertility rate and investing its resources in growth economies. However, if every nation is headed to fertility rates well below the replacement rates, it is only a temporary fix. The dependency ratio for a world with eleven billion people is already a challenge. The only way to get a peak population under nine billion people is to achieve fertility rates well below replacement rates, substantially intensifying the dependency ratio imbalance just a generation or two down the road. (For more detail, see the Brookings' piece, How will we cope when there are too few young people in the world?)

Decoupled Economic Growth

At the most basic level, climate policy must be about economic growth decoupled from CO2 emissions. Population growth is one issue driving this need for economic growth. But also consider people are advocating for a $15 living wage for every worker in the United States. That would put nearly every U.S. worker in the top 10% of wage earners in the world. Meanwhile, despite astonishing improvements in human well-being around the world and the dramatic reduction in extreme poverty, there are still hundreds of millions of people in extreme poverty. A couple billion more have more stable lives but still live well below standards we would consider tolerable. If it is a matter of justice that everyone in the U.S. has a $ 15-an-hour living standard, then it is only just that all citizens of the world have something approximating that standard. The only way that happens is through economic growth. Measures like population control are shortsighted and potentially disastrous. The principal mission is decoupling economic growth from fossil fuel consumption and other disruptive measures like decoupling land use from agricultural production.

Extreme Poverty is Vanishing. What Does That Mean in Practical Terms?

Throughout human history, 90% of people have lived at a subsistence level - at or under what economists today call the extreme poverty line. Between 1820 and 1980, that percentage shrank by half to 44%. Between 1980 and 2005, it halved again to about 22%. During the next ten years, it has more than halved to less than 10%. Remember that while these percentages were shrinking, the global population grew from one billion to more than seven billion.

That is all good, but most people don't relate well to statistics. Is there some way to visually capture what this means in concrete terms?

Gapminder has an excellent graph that gives a sense of what it means to move from extreme poverty. The left column indicates how the extremely poor live relative to the features listed on the left. The second column is indicative of the life to which they emerged. 

The graph is also instructive in dividing living standards into four levels. Many of us who went to school in the 1960s to 1990s have tended to see a binary world - developed and undeveloped, first world and third world, rich and poor, the West and the rest. That has ceased to be the case. It has been on a trajectory away from a binary world all during our lifetimes. At the bottom of the graph, you will see seven yellow human figures. Each stand for one billion people. Most of the world is now concentrated in the middle and moving upward or to the right in this chart. The percentage of people in level one is now well below one billion and shrinking rapidly.

Gapminder Dollar Street has visited 264 families worldwide and taken photos of their homes and belongings. The links to photos of the households are arranged in columns like the chart, allowing you to walk through the houses and get a sense of what it means to live at various living standards. It is an excellent resource.

Five Hidden Ways That Globalization is Changing

Interesting infographic from McKinsey Global Institute. For details read Globalization in transition: The future of trade and value chains.

World Social Indicators: Global Per Capita Income

We have seen that life expectancy has been improving all across the planet. It is one of the most important measures of well-being. Yet most people think of income when they think of prosperity. Rightly so. Income is correlated with other factors that allow us to move beyond surviving to thriving.

Today's common refrain is "The rich are getting richer and the poor are getting poorer." It is widely repeated. It is a sentiment that often finds its way into the unison prayers of confession in congregations of my tradition. N. T. Wright, a theologian whose work I've found very helpful, writes:

And now we have the new global evils: rampant, uncaring, and irresponsible materialism and capitalism on the one hand; raging unthinking religious fundamentalism on the other. As one famous book puts it, we have ‘Jihad versus McWorld.” (Whether there is such a thing as caring capitalism, or for that matter thoughtful fundamentalism, isn’t the point at the moment.) …. It doesn’t take a Ph.D in macroeconomics to know that if the rich are getting richer by the minute, and the poor poorer, there is something badly wrong. (Simply Christian, 8)

It also doesn't take a Ph.D. in macroeconomics to verify such claims either. ;-) The truth is much more complicated than this declaration and certainly is not true if we take the long view of multiple generations. What can we say about per capita income on a historical basis?

Comparing income across eras is difficult. Inflation and other variables make direct comparison impossible. Furthermore, comparing contemporary currency-based economies to barter economies will not do. Economic historians have developed a concept called "purchasing power parity" (PPP) to aid this process. The value of a dollar at a fixed point in time is chosen, and the value of income at all other points is pegged to the purchasing power of the fixed dollar. We will use a PPP measure of "2011 International Dollars" (I$) for our purposes. Annual per capita Gross Domestic Product (the total market value of all final goods and services produced within a given country in a given period, usually a year) will be used as a proxy for income.

Not all economists agree on how to achieve parity between the present and more distant eras. Angus Maddison, one of the foremost authorities on this topic, suggested that about I$1,000 per capita (using 2011 dollars) is a subsistence income level and was typical of subsistence living before the industrial revolution. However, economist Brad Delong, who has done his own analysis, claims:

“A large proportion of our high standard of living today derives not just from our ability to more cheaply and productively manufacture the commodities of 1800, but from our ability to manufacture whole new types of commodities, some of which do a better job of meeting needs that we knew we had back in 1800, and some of which meet needs that were unimagined back in 1800.” (Brad DeLong)

Therefore, DeLong puts historic subsistence living at a lower level, but both scholars end up with similar income estimates in recent eras. Here is the change over the last 2,000 years using Maddison's estimates.

 

The following chart shows their estimates between 1700 and 2015:

You can see that the growth accelerates beginning in the early nineteenth century. Many have suggested that the industrial revolution began not long after 1750, and many inventions indeed came into being not long after that time. However, there was a lag time of a few decades between the advent of various technologies and their placement into productive use. Maddison argues for a beginning point of 1820 (as do other economic historians.) Regardless, keep in mind that the world population grew more than sixfold from less than 1 billion to more than 6.6 billion from 1750 to 2000 during this explosion in per capita income.

So in the aggregate, we can see that growth in worldwide per capita income is astounding. But how broadly spread is the economic expansion?

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World Social Indicators: Introduction

Is the state of the world getting better or getting worse? How would you answer that question? What indicators would you use?

For Christians, our mission is to seek the greatest shalom possible in the world, always cognizant that shalom in its fullness will only be recognized at the consummation of the new creation. But how would we measure shalom?

Isaiah 65:17-25 is a statement of what the ancient Hebrews understood as the fullness of shalom.

17 For I am about to create new heavens
and a new earth;
the former things shall not be remembered
or come to mind.
18 But be glad and rejoice forever
in what I am creating;
for I am about to create Jerusalem as a joy,
and its people as a delight.
19 I will rejoice in Jerusalem,
and delight in my people;
no more shall the sound of weeping be heard in it,
or the cry of distress.
20 No more shall there be in it
an infant that lives but a few days,
or an old person who does not live out a lifetime;
for one who dies at a hundred years will be considered a youth,
and one who falls short of a hundred will be considered accursed.
21 They shall build houses and inhabit them;
they shall plant vineyards and eat their fruit.
22 They shall not build and another inhabit;
they shall not plant and another eat;
for like the days of a tree shall the days of my people be,
and my chosen shall long enjoy the work of their hands.
23 They shall not labor in vain,
or bear children for calamity;
for they shall be offspring blessed by the LORD --
and their descendants as well.
24 Before they call I will answer,
while they are yet speaking I will hear.
25 The wolf and the lamb shall feed together,
the lion shall eat straw like the ox;
but the serpent -- its food shall be dust!
They shall not hurt or destroy
on all my holy mountain, (NRSV)

Several themes jump out from this characterization of a world restored to shalom. There are some very practical and specific features:

• God will delight in his people and be attentive to them. (18-19, 24)
• Safety will prevail. (19)
• Infant mortality will cease. (20)
• Life expectancy will increase beyond 100 years. (20)
• There will be a just and prosperous order in society (absence of war and oppression.) (21-24)
• Nature itself will be altered into a more peaceful order. (25)

The New Testament version of the new creation expands this vision even further. In the New Testament, God dwells with humankind, and there is eternal life. But it seems to me that if we look at the features of shalom in this Isaiah, we can get a good sense of whether or not the world is moving in the right direction.

Especially interesting about this Isaiah passage is the direct reference to infant mortality rates and life expectancy. Social scientists frequently turn to these measures for a sense of societal welfare. Why? These two indicators serve as indirect indicators of other societal realities. Many other social variables (i.e., adequate food, health care, environment, social stability, healthy social institutions, and low crime) must be positive for these two variables to be positive.

What is particularly interesting is that every time I hear sermons on this passage, the emphasis is on the declining state of shalom in our world. One sermon I heard a few years back lamented rising inequality, AIDS, poverty in Africa, wars in Iraq and Afghanistan, and polar bears drowning due to melting ice (the last one was in the prayer of confession.) In my Presbyterian tradition, the prayers of confession frequently include lament of our greed and threatened destruction of the plant. I routinely read theologians on social media who decry "neoliberalism" and the deepening dystopia into which it is leading our planet. Public theologian Brian McLaren characterizes the present world order as a "suicide machine." Is this an accurate assessment?

The most common trait I find in these assessments is that they are usually thoroughly subjective. They are without context and awareness of empirical realities. Do not misread me here. I am not saying we are without need of confession. Evil is at work in the world and within us. But what if we collectively found a way to double life expectancy, make infant mortality rare, virtually eliminate extreme poverty, reduce global income inequality, and radically reduce the number of deaths due to war. Would we not celebrate? Yes. The historical reality is that all things have happened or are on the way to happening! Yet I do not believe I have ever heard a sermon extolling and celebrating the profound and unprecedented improvements we have seen in global well-being.

I want to offer some thoughts on how we might measure shalom, at least from the physical and material well-being perspective. In the coming days, I'll write several posts that look at key indicators. As you will see, I conclude that we live in an era of unprecedented expansion of global shalom.

That is not to say we are at some Francis Fukuyama-like "End of History" moment, but the idea that global well-being is in decline is indefensible. Unprecedented positive change is underway and has been for some time. Yet there are still more than a billion barely touched by these world events. There is so much more that needs to happen. We have learned a great deal and need to learn a great deal more. In my estimation, the biggest threats to the continuation of these advances are radical populist movements from the right and left, disconnected from facts and history. We need to be informed about the world's true state before joining movements to "fix" it. We must lift up achievements as morale builders and learn lessons from successes as we press ahead.

I hope you will join me for some conversation.

[Series Index]

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Don't Forget the Good Stuff

It is easy to become obsessed with the challenges and threats we see before us today. It is easy to lose sight of the bigger picture and not see the tremendous good happening in the world. Here are six social indicators pointing to improving the quality of life for billions around the globe. Setbacks and brief reversals are inevitable, but increasingly, the challenges we face are of our own making, like tribalism and authoritarianism. Let us be vigilant in addressing our challenges without losing sight of the bigger picture.

Shrinking the World, 1800-1930

Satirist and humorist Douglas Adams, probably best known for The Hitchhiker's Guide to the Galaxy, once wrote:

"Anything that is in the world when you're born is normal and ordinary and is just a natural part of the way the world works. Anything that's invented between when you're fifteen and thirty- five is new and exciting and revolutionary and you can probably get a career in it. Anything invented after you're thirty-five is against the natural order of things."

We tend to view our era as a time of unprecedented change while assuming the world before our birth was virtually stagnate. In fact, rapid, radical change has been the norm for at least the past few centuries. The case can be made that the generations living just before our generation experienced changes every bit as disorienting as ours.

I recently came across this graphic from The Atlas of Historical Geography of the United States, published in 1932. These maps show the improvement in travel times from New York from 1800 to 1930.

I remember first coming across similar maps in Allan Pred's Urban Growth and the Circulation of Information: The United States System of Cities, 1790-1830. Pred demonstrates that not only did travel times shrink, but the cost per mile of travel shrank as well.

Early in the nation's history, most travel was by water. We built cities on major waterways. Most states in the eastern half of the United States have a major river or the ocean as a boundary. This meant that each state had access to the water transportation superhighway. Traveling by land was exceedingly difficult. There were few roads. It took days to reach even nearby cities by stagecoach, and each night meant fees for food and lodging that were not part of the stagecoach price. You had the labor of a driver spread across a few people. The cost of travel for even short distances could consume a week or more of wages for a typical working person. Only the wealthy and merchants could afford such travel.

I believe it was Pred who said travel from New York to Pittsburgh did not typically take a route across Pennsylvania. It involved boarding a boat in New York, sailing down the east coast around Florida to New Orleans, and then navigating up the Mississippi and Ohio to Pittsburgh. Boats could handle far more people per trip, required no extra lodging expenses, food was generally provided on board, and laborers per person were much smaller. Water travel was also far more energy efficient and thus less costly.

As turnpikes and canals were built, and with the advent of the steamboat in the 1820s, travel times shrank, and so did the prices. Depending on travel destinations, Pred shows the cost of travel per mile between 1800 and 1840 dropped by 50-90%. Railroads shrank the distance and decreased costs even more. Today, we can fly from New York to Los Angeles in a few hours for one or two days' wages for someone earning around the US median Salary.

The world continues to change significantly but let us not fool ourselves into thinking that our age is the first to encounter sweeping technological and economic changes.

[Note: If you are interested in American economic history, you need to investigate the interactive Atlas of the Historical Geography of the United States.]

You may also find this clip by Louis C. K. sums up well our lack of appreciation.

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The Future of the American Dream

For most Americans today, there has been a presumption that our children's lives will be more prosperous than ours. The American Dream, whatever particularities might include, has always included this assumption. It is virtually a social contract. Is the idea that most of our children will have a more prosperous life than we did really valid?

Robert Gordon, economic historian at Northwestern University, released a book earlier this year, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War. Gordon's mammoth tome documents changes in American living standards over the past 150 years. His research leads him to conclude that not all innovations significantly improve living standards. From 1870-1970, a wave of technological and social innovation emerged that radically improved worker productivity, improving our living standards. There has been innovation since 1970, but most of it, apart from communication and entertainment, has been an extension and a deepening of the innovations before 1970. The period from 1870 to about 1920 was a period of development and implementation of innovations that began to have a full impact after 1920. Gordon estimates the average annual growth rate in output per hour like this:

1890-1920 = 1.50%

1920-1970 = 2.82%

1970-2014 = 1.62%

For those familiar with American history, you will remember that income inequality was relatively high going into the 1920s. Inequality shrank steadily and substantially over the next fifty years until the mid-1970s. This corresponds with Gordon's estimates of rapidly improving worker productivity. Since the 1970s, there has been slower growth, which is more related to capital investment than improving worker productivity. We have seen income inequality grow since the 1970s.

Gordon is doubtful that we will ever again have a convergence of innovation as we had from 1870-1970. This and certain demographic headwinds will make sustainable high growth improbable for present generations. I hope to write more about this in the coming days, but this graphic posted by William Easterly on Twitter caught my eye. It comes from an article by David Leonhardt, The American Dream, Quantified at Last. I take it as more evidence consistent with Gordon's thesis.

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Why Are We Not Running Out of Farm Land?

One of the most persistent worries about population and economic growth is that we will eventually use up all our resources and land. It is based on the intuitive (but false) assumption that if it takes X acreage of land to feed a person today, then it will take two times X acreage to feed double the population in the future. This thinking does not allow for ongoing innovation and adaptation.

This graph shows the total global hectares used in farm production from 1960-2009. Note that the global population grew from three billion in 1960 to 6.8 billion in 2009.

(Source: Nature Rebounds)

The population will likely grow again by half over the next fifty years. Note that the projections are for the number of hectares used for farming to actually decline. The alternative projection assumes we adopt more efficient food consumption and stop growing crops for fuel. In either case, we will use significantly less land than in 1960.

This is one example of decoupling, where two seemingly connected trends become disconnected. We see this in water consumption, CO2 produced per dollar of produced goods, and the amount of natural resources we use. The direst predictions about resources and climate tend to minimize or ignore these decoupling developments. We should not allow dire predictions that ignore decoupling to frighten us away from growth and achieving prosperity for the whole world.

Challenges? Yes. But we are not at the edge of doom.

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More Evidence of an Improving World - HDI

The world is becoming a better place. It is not a utopia. We are not without substantial challenges. But we are becoming (as in movement along a trajectory) better (as in measurably improved according to a standard.) 

The Human Development Index is a United Nations measure of well-being combining income, literacy, education, and life expectancy data. Here is the index for the world nations in 1980 and 2012. The reality is that we are living through the most astonishing transformation toward human well-being in all of history. You can find the interactive version of the chart at Our Data.

 

Rosling Univeristy (How to be smarter than a chimp)

Are you smarter than a chimp? There is a good chance you are not when it comes to knowledge about global socioeconomic trends. For years, Swedish global health expert, Hans Rosling, has been giving Ted talks and making presentations about global trends. One of his favorite teaching tools is to ask people a question like this:

Globally, over the past 20 years, the rate of extreme poverty has:

1. Doubled.
2. Stayed the same.
3. Decreased by more than half.

Now chimps will randomly select, giving each answer a 33% chance. Yet when Rosling asks audiences, at least half will say A, a sizable percentage will say B, while a few will say C. Yet C is the correct answer! This is the case with one variable after another. Audiences routinely score worse than chimps, choosing the most negative option.

An old adage states, "It isn't what we don't know that gets us in trouble. It's what we know that ain't so." That we routinely pick the wrong answer more often than chimps shows that we have bias.

In the Ted talk, How not to be ignorant about the world, Hans' son Rosling notes that part of the problem is our education system. Teachers go to college at a particular point in time and learn the state of the world at that time. But they tend not to learn about ongoing developments. The data has often been hard to come by and hard to interpret. So teachers are biased by what they learned years ago. (Reporters have the same problem.) But there are other factors.

During our evolutionary history, our brains became wired to notice threats. Hunters walking through the brush who were attentive to the possibility of tigers lying in wait likely survived those who went about carelessly enjoying a beautiful day. So when we reflect on broad human trends, we fixate on perceived threats. What was useful for us in the wild is counterproductive as we try to interpret socioeconomic trends. If you want to outscore a chimp on an exam about global well-being, Ola Rosling suggests that you must drop your predispositions and adopt these four rules of thumb:

1. Assume most things are improving.
2. Assume most people are in the middle of a distribution, not a binary of rich and poor.
3. Assume social development precedes becoming wealthy. (Don't assume that a population must be rich before meeting basic social needs.)
4. Assume you are exaggerating the threat if the topic is something you personally fear.

Additionally, Hans, Ola, and others have been working to build the Gapminder website to provide you with data that can be presented in meaningful ways. But one of the most important contributions the Roslings have made is their collection of entertaining and informative videos. In this post, I include every video I can find with a brief annotation. (I'll add more as I find any.) Many videos overlap or cover similar data but are all well worth viewing. So here is your resource for becoming smarter than a chimp. Don't say I never gave you anything.

(This link also has links to most of these videos, including some shorts not listed here: Gapminder Video)

Hans Rosling's 200 Countries, 200 Years, 4 Minutes (2010)

If you are just getting acquainted with Rosling, I'd begin here. This four-minute presentation gives you a quick sense of what he is talking about.

 

Hans and Ola Rosling: How not to be ignorant about the world. TED June 2014

This is the second video to watch. The front half is Hans making his case that the world is improving, and the back half is Ola explaining, as I recounted above, why we are so disinclined to see positive change.

 

Hans Rosling: The magic washing machine. TED December 2010

This is the third one to watch. This is one of my favorites. While fully embracing the concern about the environmental impacts of economic growth, Rosling shows the importance of economic growth through the story of the washing machine.

 

THE REST ARE IN CHRONOLOGICAL ORDER

Hans Rosling: The best stats you've ever seen. TED February 2006

The TED presentation that kicked it all off. He focuses on the positive changes underway in the world. He points to his efforts to liberate, integrate, and animate data and to find ways to present data the public finds understandable.

 

Hans Rosling: New Insights on Poverty. TED March 2007

Rosling shows that social development tends to precede economic development. He addresses the issue that, unfortunately, economic development has always been based on fossil fuels. Higher yields, technology, and markets are key to ending poverty, but more dimensions like human rights, environment, governance, economic growth, education, health, and culture need our attention. The ending has a great surprise!

 

Human Rights and Democracy Statistics- Gapminder c. 2008

Rosling describes why human rights are so hard to describe and evaluate.

Source

Yes they can! - Gapminder c. 2008

Rosling explains that poor nations will one day become prosperous, and we should welcome that.

Source

Poor Beats Rich in MDG Race - Gapminder c. 2008

Rosling shows that countries that have developed from poverty to well-being have done so faster than Western nations. Poor countries today can make the transition much quicker because of what previous countries have learned.

Source

What stops population growth? - Gapminder c. 2008

Small families are the key to ending population growth, and the key to small families is childhood survival.

Source

Hans Rosling: Insights on HIV, in stunning data visuals. TED February 2009

Uses Gapminder data to show nuances in how AIDS has spread and what it takes to defeat it.

 

Hans Rosling: Let my dataset change your mindset. TED June 2009

This is the third video you should watch. Rosling deconstructs the dichotomy of wealthy and developing nations and challenges the idea of thinking in sweeping terms like "Africa."

 

The Joy of Stats with Professor Hans Rosling - Gapminder c. 2010

Rosling shows how making data available and animating empowers people to make better decisions, sometimes without realizing they are using statistics.

Source

Hans Rosling: Asia's rise -- how and when. TED Nov 2009

Rosling forecasts when China and India will catch up with the USA and UK.

 

 Hans Rosling: Global population growth, box by box. TED June 2010

 Rosling says that child survival is the new green. This video explains why.

 

Hans Rosling: The good news of the decade? We're winning the war against child mortality. TED September 2010

Rosling breaks down the remarkable trends in child mortality. Education of women accounts for at least 50% of the drop.

 

 

Hans Rosling: Religions and babies. TED April 2012

Religion is not a factor in family size. There is no significant difference between Islamic and Christian countries regarding births per woman. The defining difference is economic well-being.

 

 DON'T PANIC — Hans Rosling showing the facts about population. BBC November 2013

 A one-hour investigation into the dynamics of population growth using stories about real live families interspersed with Rosling's entertaining presentation of data.

 

Don't Panic - How to End Poverty in 15 Years. BBC September 2015

No embed is available.

You can view the video here.

Here is a link to a series of short videos on how to use development data visually.

An introduction to visualising development data

 

Hans and Ola Rosling: How not to be ignorant about the world

Hans Rosling and Ola Rosling are truly brilliant and entertaining. The first part of this video highlights how poorly we assess what is happening in the world. The back half gives some simple tips on how to avoid developing false perceptions and suggests why it is important that we do so. Enjoy!

 

Half of Global Wealth Owned by 62 People: How Oxfam Lies While Telling the Truth

Once again, Oxfam is circulating that 62 people have as much wealth as the bottom half of the world's population. Think about that for a moment. When you read that, what do you think that means? Particularly, what is wealth?

Many people will interpret "wealth" as financial assets. Many others realize wealth includes the value of our non-financial possessions. Therefore, Oxfam says that if you add up the value of all our possessions, 62 people own half. Right? Wrong! Though that is the message they want you to hear.

Terminology lesson. The sum of your financial and non-financial possessions is your total assets. Wealth is your total assets minus your debt. Wealth is your net worth. Oxfam misconstrues wealth as total assets. (As this has been thoroughly documented in the press for years, we can only assume the misrepresentation is intentional.)

Thanks to Reuters reporter Felix Salmon, who dug into Oxfam's sources, we know Oxfam uses Credit Suisse Global Wealth Databook to calculate their numbers. Here is how it works (using the 2015 Databook):

• Step 1: Find the global wealth total. Page 90 says it is $263 trillion.
• Step 2: Find the percentage of wealth owned by the bottom 50%. Here are the percentages of global wealth for the bottom five deciles of wealth ownership from lowest to highest (p. 148): -0.3 + 0.1 + 0.1 + 0.3 + 0.5 = 0.7%.
• Step 3: Calculate the amount of wealth for the bottom half. Multiply $263 trillion by .07%. That gives $1.84 trillion.
• Step 4: Get a list of the wealthiest people in the world and then add them up until you get to $1.84 trillion.

That may seem right at first glance but look at this graph from Credit Suisse's Global Wealth Report 2015. (p. 15) It shows what percentage of each decile lives in which region of the world. I've added two notations.

Note that the United States has 10% of the world's least wealthy people (circle 1). China has none of them (circle 2)! How is that possible? Because the bottom number for wealth on the left side of the chart is not zero. It is a negative number. The middle-class American with a mortgage, student loans, and consumer debt totaling more than the value of her home, bank account, and other possessions, is less "wealthy" than a Chinese peasant farmer who owns virtually nothing but also has no debt. The entrepreneur who borrowed a million dollars for his business is even "poorer" than these two. This is who Oxfam is grouping in its bottom 50% of wealth. It is a meaningless comparison. But the deception does not stop there.

Oxfam builds a narrative that the increasing concentration of wealth at the top has the corresponding negative effect of making people poorer at the bottom. Their misrepresentation of wealth as total assets gives us no insight into this claim. I will suggest that income is a more critical issue for the poorest people in the world than wealth or total assets. One must have an income that at least meets basic needs before she can begin to save, invest, and buy capital goods.

Extreme poverty, measured by income, is rapidly disappearing. The percentage of people living on less than $1.90 per day has shrunk from almost 40% in 1990 to less than 10% today (and we have added an extra 2 billion people.)

(Source: Washington Post)

Furthermore, the global income distribution has been progressively moving toward a bell curve distribution and away from a bi-modal distribution, with wealthy people clustered at the top and very low-income people clustered at the bottom.

(Source: Business Insider)

And this chart shows how the mean and median global per capita income numbers keep rising, also noting that the global GINI coefficient declined from 68.7 to 64.9 between 2003 and 2013. (Lower GINI number means more equality.)

(Source: Conversable Economist)

As I have continued to learn about these issues, I keep coming to this graph as a discussion starter on economic inequality.

(Source: Pew Research)

To me, this chart suggests that recent trends in technology and globalization have benefited billions of people who once lived in bare subsistence poverty. There is a small minority of people at the left of the chart who are not being touched by these changes, most of them living in counties with turmoil and failed nation-states. At the extreme right are the owners of capital who have benefited from productivity and expanded trade. Middle-class people in developed nations have experienced downward pressure on their wages due to technology and a burgeoning labor supply in a global economy. However, living standards are not just a function of wages but also the cost of living. A case can be made that the developed world middle class had improvements in living standards because globalization kept the cost of living lower than it otherwise would have been. That does not show up in this chart. It is more complex, but a chart like this is a better place to begin a discussion.

In short, Oxfam wants to promote a narrative that casts global capitalism primarily as an exploitative enterprise, a zero-sum game where the growth of wealth at the top necessarily means the reduction of wealth at the bottom. The narrative intuitively makes sense. Some version of this thinking is common, but it is virtual gospel on the left where the moral compass is directed predominately by equalization rather than a robust conceptualization of justice. But it is wrong. It is as ideologically myopic as the "free markets and democracy fixes everything" mantra on the right.

Finally, let me be clear about what I did not say. I did not say I thought that the growing concentration of wealth at the top was good, that there are not masses of people who need substantial improvement in their economic well-being, that global capitalism is an unqualified good, or that there are not profound economic injustices in the world. I did not speak to any of Oxfam's proposed policy solutions. Discernment of economic issues is complex and requires our best efforts at sound analysis to bring lasting and just change. Oxfam's misuse of the data to support ideologically predetermined policies does not help. They are telling the truth about the numbers they use, knowing the numbers they use will lead most of us. That is what I'm addressing.

 

It's The End Of The World As We Know It, So Why Don't We Feel Fine?

It’s the end of the world as we know it – because it is improving remarkably! Almost every indicator of human well-being shows improvement on a global basis. We live in the best era in human history. How does that make you feel? Like the old REM song, does it make you feel fine? Or does it maybe make you feel incredulous? Defensive? Offended?

I’ve been writing and linking stories about global improvements on social media for at least ten years. I’ve learned that people usually respond with a sad acknowledgment of a problem if I point to a negative trend. But if I mention a positive trend, I routinely get pushback. I get everything from personal anecdotal evidence to accusations of callousness toward those who continue to suffer from some particular problem. This becomes particularly true if a strong political agenda is connected with a trend. Conservatives don’t want to hear that crime is in steady decline. Progressives don’t want to hear there is a steady decline in church arson, race motivated or otherwise.

Why is it so hard for us to see and accept that the overall state of the world is improving? A recent article at Slate again documents the improving state of our world, The World Is Not Falling Apart: Never mind the headlines. We’ve never lived in such peaceful times. (Now I know that it is because the article is from Slate that my conservative readers already have their defenses up. When the exact same information gets presented by groups like CATO, progressives go into the same mode. That is yet another feature of the problem.) The data is interesting and well worth reading, but I think the following four paragraphs are particularly insightful. It goes a long way to explaining why it’s the end of the world as we know it and we don’t feel fine.

How can we get a less hyperbolic assessment of the state of the world? Certainly not from daily journalism. News is about things that happen, not things that don’t happen. We never see a reporter saying to the camera, “Here we are, live from a country where a war has not broken out”—or a city that has not been bombed, or a school that has not been shot up. As long as violence has not vanished from the world, there will always be enough incidents to fill the evening news. And since the human mind estimates probability by the ease with which it can recall examples, newsreaders will always perceive that they live in dangerous times. All the more so when billions of smartphones turn a fifth of the world’s population into crime reporters and war correspondents.

We also have to avoid being fooled by randomness. [Roger] Cohen laments the “annexations, beheadings, [and] pestilence” of the past year, but surely this collection of calamities is a mere coincidence. Entropy, pathogens, and human folly are a backdrop to life, and it is statistically certain that the lurking disasters will not space themselves evenly in time but will frequently overlap. To read significance into these clusters is to succumb to primitive thinking, a world of evil eyes and cosmic conspiracies.

The only sound way to appraise the state of the world is to count. How many violent acts has the world seen compared with the number of opportunities? And is that number going up or down? As Bill Clinton likes to say, “Follow the trend lines, not the headlines.” We will see that the trend lines are more encouraging than a news junkie would guess.

To be sure, adding up corpses and comparing the tallies across different times and places can seem callous, as if it minimized the tragedy of the victims in less violent decades and regions. But a quantitative mindset is in fact the morally enlightened one. It treats every human life as having equal value, rather than privileging the people who are closest to us or most photogenic. And it holds out the hope that we might identify the causes of violence and thereby implement the measures that are most likely to reduce it. Let’s examine the major categories in turn.

6 New Rules of Business for the Next Industrial Revolution

Alan Murray at Fortune summarizes a lengthier piece by Geoff Colvin called Why every aspect of your business is about to change. Here is my summary of Murray's summary:

1. You don't need a lot of physical capital. ...

2. Human capital will matter more than ever. ...

3. The nature of employment will change. For the rest of your employees, gig work will grow. ...

4. Winners will win bigger, and the rest will fight harder for the remains. ... McKinsey Global Institute puts it: "tech and tech-enabled firms destroy more value for incumbents than they create for themselves."

5. Corporations will have shorter lives. The average life span of companies in the S&P 500 has already fallen from 61 years in 1958 to 20 years today. It will fall further.

6. Intellectual property knows no natural boundaries. 

Fascinating stuff.

Global Inequality in Decline

This chart comes from Timothy Taylor's post, The Shifting World Distribution of Income. One notable thing I saw was that median annual income (measured in purchasing power parity dollars) doubled from 2003 to 2013. This chart suggests it will double again within about 20 years. Of course, the most obvious change is the collapse of the spike at the low end of the chart, indicating the rapid decline in the number of people living in or near extreme poverty. See Taylor's post for more details.

World Bank: Extreme poverty 'to fall below 10%'

BBC: World Bank: Extreme poverty 'to fall below 10%'

The World Bank has said that for the first time less than 10% of the world's population will be living in extreme poverty by the end of 2015.

The bank said it was using a new income figure of $1.90 per day to define extreme poverty, up from $1.25.

It forecasts that the proportion of the world's population in this category will fall from 12.8% in 2012 to 9.6%. ...

... However, the report's authors said the "growing concentration of global poverty in sub-Saharan Africa is of great concern".

Extreme poverty in that region is seen as falling from 46.2% in 2012 to 35.2% at the end of 2015. ...

... The World Bank says the downward trend is due to strong growth rates in developing countries and investments in education, health, and social safety nets. ...

... And the bank warned that poverty is "becoming deeper and more entrenched in countries that are either conflict ridden or overly dependent on commodity exports".

1990: 1,959 billion = 37.1% of world's population.
1999: 1,747 billion = 29% of world's population.
2012: 902 million = 12.8% of world's population.
2015: 702 million = 9.6% of world's population.

The world has improved since 2000 – but not because we planned it (Think Bonsai)

The Globe and Mail: The world has improved since 2000 – but not because we planned it

Millennium Development Goals: ...

... The headline goal, of cutting the proportion of people living in poverty in half, was achieved five years early, in 2010, by which time a billion people had left absolute poverty. And now the rate of poverty has fallen to less than a third of its 1990 level (that is, from 47 per cent of the world's people to 14 per cent).

The other MDGs saw impressive outcomes. The percentage of malnourished people has been cut in half. So has the number of children dying before the age of five, and the percentage of people without access to clean drinking water. The maternal mortality rate has almost dropped by half. The number of primary-age children out of school fell from 100 million to 57 million; the primary enrollment rate in sub-Saharan Africa rose to 80 per cent from 52 per cent. New HIV infections annually fell from 3.5 million in 2000 to 2.1 million in 2013. ...

... There's a problem with all the self-congratulation, though: Nobody has been able to find any connection between those impressive outcomes and anything done by the UN since 2000.

Charles Kenny and Andy Sumner of Washington's Center for Global Development have spent the decade tracking the progress of the UN's goals. In a series of studies, they've found that in most areas the goals had little or nothing to do with the outcomes. ...

... What did cause the world to improve so dramatically between 2000 and 2015? In large part, two things: After 1990, the old closed, nationalist economies of the postcolonial era and the Cold War broke down (with ugly results at first) and gave rise to the set of phenomena we call "globalization." And after 2000, countries in Asia, South America, Eastern Europe and much of Africa started developing better institutions of government, education and health. Stronger liberal economies and stronger states worked wonders.

The UN's new post-2015 goals at least recognize that economic growth is crucial (they call for an astonishing 7-per-cent growth a year in the poorest countries). It may, in fact, be the only key factor – and it's the one the UN can't control.

In fact, what is needed is a healthy economic ecosystem grounded in efficient and just soci0-economic structures, with markets providing a real-time feedback loop through which a society can be adaptive to ever changing priorities. That ecosystem needs to be justly connected to the larger ecosystem of global productivity and exchange.

There is a common tendency to believe that development can be achieved through top-down analysis, planning, and implementation. This is generally the U.N. Millennium Development Goals model. Such projects are rarely effective. It presumes that experts can correctly identify the most critical needs, that the priority of those needs will stay constant, and that they can identify which levers to flip to get the optimal outcome.

Mohammad Yunus uses the image of the Bonsai tree to illustrate the problem. The tiny Bonsai tree grows from the same seed as the tall tree in the forest. The difference is that the Bonsai tree has only the nutrients of the tiny pot in which to grow. The poor are Bonsai people. They can grow as strong and tall as anyone else if planted in the right soil. The right soil is healthy socioeconomic structures and inclusion in networks of productivity and exchange.

The U.N. approach has elements of paternalism. The poor can reasonably address their own needs if the "right soil" is present. Because of geopolitical concerns or pure ineptness, the West has too often played a role in "degrading the soil." This article again reminds us how impotent so many of our "big idea" solutions are. The critical factors lie in the less-than-glamorous work of building healthy institutions.

How GDP shares have shifted across the world since 1000 AD

Business Insider: How GDP shares have shifted across the world since 1000 AD

Interesting graph.

Don't Panic - How to End Poverty in 15 Years (Hans Rosling)

YouTube: Don't Panic - How to End Poverty in 15 Years (This World documentary)

"The legendary statistical showman Professor Hans Rosling returns with a feast of facts and figures as he examines the extraordinary target the world commits to this week - to eradicate extreme poverty worldwide. In the week the United Nations presents its new goals for global development, Don't Panic - How to End Poverty in 15 Years looks at the number one goal for the world: eradicating, for the first time in human history, what is called extreme poverty - the condition of almost a billion people, currently measured as those living on less than $1.25 a day.

Rosling uses holographic projection technology to wield his iconic bubble graphs and income mountains to present an upbeat assessment of our ability to achieve that goal by 2030. Eye-opening, funny and data-packed performances make Rosling one of the world's most sought-after and influential speakers. He brings to life the global challenge, interweaving powerful statistics with dramatic human stories from Africa and Asia. In Malawi, the rains have failed as Dunstar and Jenet harvest their maize. How many hunger months will they face when it runs out? In Cambodia, Srey Mao is about to give birth to twins but one is upside-down. She's had to borrow money to pay the medical bills. Might this happy event throw her family back into extreme poverty?

The data show that recent global progress is "the greatest story of our time - possibly the greatest story in all of human history". Hans concludes by showing why eradicating extreme poverty quickly will be easier than slowly.

Don't Panic - How To End Poverty In 15 Years follows Rosling's previous award-winning BBC productions Don't Panic - The Truth About Population and The Joy Of Stats."

Latin America’s middle class grows, but in some regions more than others

Pew Research: Latin America’s middle class grows, but in some regions more than others

Three interesting graphs:

Trends in Extreme Poverty (Spoiler: The Poor Are Not Getting Poorer)

Globally, the number of people living in extreme poverty ($1.25 a day) is shrinking. The global poor are not getting poorer. The world population grew from 4.5 billion people in 1981 to 6.9 billion in 2010 - a 60% increase. The percentage of people living in extreme poverty in developing nations dropped from over 50% to 21%. (From about 1.95 bil. to 1.2 bil., estimates are now well below one bil. in 2015.)

That doesn't mean life just above the extreme poverty line is desirable. That doesn't mean there isn't a great deal more to do. But let's be honest about the trajectory. And let's also be honest that central to the decline in extreme poverty has been the inclusion of the poor in networks of productivity and exchange - that is to say, they embraced some form of market capitalism. Unqualified dismissal of "capitalism" (rarely defined by critics), as some religious leaders are prone to do, should be challenged.

Source: World Bank - State of the Poor

GDP Decoupling from Energy and Resource Use

Harvard Business Review: Stuff: When Less Is More

One of the most persistent economic misconceptions I see is the presumed fixed relationship between a unit of GDP and the energy/resources consumed in the process. This false relationship is projected into the future to show that growth is leading to total collapse in the near future. These graphs dispel the validity of that relationship.

However, the article points out that this incredible increase in productivity makes products cheaper, so consumption of the products grows dramatically. That does create a greater aggregate demand for energy/resources. The question is whether or not the decoupling of energy and resources can one day get out ahead and then go into decline through some combination of innovation and slowed demand. These two graphs were especially interesting.

"Material intensity continues to fall dramatically. In the U.S., the amount of resources extracted per dollar of GDP has decreased by nearly 75% over the past 90 years."

"Energy intensity, the portion of the total energy supply required to produce a material, has also dropped markedly. For example, the manufacture of 1.5 gigatons of steel would have gobbled up one-fifth of the world's total primary energy supply (TPES) in 1900. In 2010 it used only about one-fifteenth."

'Great Decoupling' of Wages and Productivity Driven by New Technology

Huffington Post: 'Great Decoupling' of Wages and Productivity Driven by New Technology

Interesting chart.

Why "Sustainable Development" is Not the Answer

New York Times: A Call to Look Past Sustainable Development - Eduardo Porter

If billions of impoverished humans are not offered a shot at genuine development, the environment will not be saved. And that requires not just help in financing low-carbon energy sources, but also a lot of new energy, period. Offering a solar panel for every thatched roof is not going to cut it.

"We shouldn't be talking about 10 villages that got power for a light bulb," said Joyashree Roy, a professor of economics at Jadavpur University in India who was among the leaders of the Intergovernmental Panel on Climate Change that won the 2007 Nobel Peace Prize.

"What we should be talking about," she said, "is how the village got a power connection for a cold storage facility or an industrial park."

Changing the conversation will not be easy. Our world of seven billion people — expected to reach 11 billion by the end of the century — will require an entirely different environmental paradigm....

... The "eco-modernists" propose economic development as an indispensable precondition to preserving the environment. Achieving it requires dropping the goal of "sustainable development," supposedly in harmonious interaction with nature, and replacing it with a strategy to shrink humanity's footprint by using nature more intensively.

"Natural systems will not, as a general rule, be protected or enhanced by the expansion of humankind's dependence upon them for sustenance and well-being," they wrote.

To mitigate climate change, spare nature and address global poverty requires nothing less, they argue, than "intensifying many human activities — particularly farming, energy extraction, forestry and settlement — so that they use less land and interfere less with the natural world."

As Mr. Shellenberger put it, the world would have a better shot at saving nature "by decoupling from nature rather than coupling with it."

This new framework favors a very different set of policies than those now in vogue. Eating the bounty of small-scale, local farming, for example, may be fine for denizens of Berkeley and Brooklyn. But using it to feed a world of nine billion people would consume every acre of the world's surface. Big Agriculture, using synthetic fertilizers and modern production techniques, could feed many more people using much less land and water.

As the manifesto notes, as much as three-quarters of all deforestation globally occurred before the Industrial Revolution, when humanity was supposedly in harmony with Mother Nature. Over the last half century, the amount of land required for growing crops and animal feed per average person declined by half. …

… Development would allow people in the world's poorest countries to move into cities — as they did decades ago in rich nations — and get better educations and jobs. Urban living would accelerate demographic transitions, lowering infant mortality rates and allowing fertility rates to decline, taking further pressure off the planet.

"By understanding and promoting these emergent processes, humans have the opportunity to re-wild and re-green the Earth — even as developing countries achieve modern living standards, and material poverty ends," the manifesto argues. …

Read the whole thing. Decoupling is essential. We have already seen this with land use. We are using no more land for agriculture in the United States than we were 100 years ago. Before that time, it took a fixed amount of land to feed each person. That same decoupling is developing worldwide, but it could be accelerated. The amount of energy consumed per unit of GDP has now begun to decline. We see this decoupling with other resources. Add a move to solar and nuclear power in combination with decoupling, and we have a real chance to drive down carbon emissions drastically.

I haven't yet read the whole EcoModernist Manifesto linked in the article, but the parameters and reasoning laid here are the best articulation of my views on economic development and sustainability that I have read.

The Decentralized Energy Revolution

Forbes: How The Energy Revolution Will Transform How We Live and Work

Revolutions used to be few and far between. James Watt's steam engine, developed in 1781, set the stage for the first industrial revolution. But it wasn't until a century later that the widespread adoption of electricity and the internal combustion engine brought about the second industrial revolution.

The information age didn't really get going until the 1970's and that's led to what to what many are now calling the new industrial revolution, which incorporates computer aided design and advanced fabrication techniques like 3D printing. However, the next revolution, in energy, is already underway.

While the drop in price for fossil fuels has grabbed most of the headlines lately, Citibank predicts that the shale boom will merely serve as a bridge to get us to a new era of renewable energy. This revolution, if anything, will be more far reaching than the others. While the earlier revolutions empowered large enterprises, this one might very well undo them. ...

... The last century was in large part driven by scale advantages. The bigger you were, the more efficient you would become. Those efficiencies would enable enterprises to own and control more resources, which would increase bargaining power and enhance the dominance of the firm.

Initially, information technology bolstered these trends. Only large organizations were able to afford computer systems that could help them administer resources by tracking accounting, maintenance and human resources. However, with the rise of personal computing and the Internet, that began to change. ...

Most populist support for renewable energy comes from concern over climate change. I am not persuaded that apocalyptic doom is certain without a swift and radical global economic restructuring. I am convinced that increasing CO2 at present rates can create highly undesirable but imprecisely understood consequences down the road. I see CO2 as a risk management issue. All things being equal, changes that minimize risk are a good thing. But since things are not equal, other considerations must also be weighed.

Human freedom and well-being are equally important to me, if not more so. Decentralized renewable energy would create enormous opportunities around the world while simultaneously reducing much of the geopolitical strife that emerges from the energy sector. Expanded opportunity has a way of translating into greater prosperity. Prosperous people are better equipped to handle climate change adaptations that may be required. Decentralized renewable energy both reduces the amount of CO2 emitted while improving the chances of smooth adaptation to changes in climate.

Critics are prone to look at renewable energy - and I'll add new generation nuclear power - as incapable of having a significant impact for many decades. Yet I keep imagining myself in 1895, looking at expanding U.S. cities and the problem of horse transportation. A guy is welding a frame between two bicycles and motorizing the contraption so he can become auto-mobile. How many would have predicted what transportation would look like in 1920 and later?

Before the industrial revolution, economies of scale were usually marginal or nonexistent. The Industrial Revolution made centralization and the economies of scale that come with it possible. The Information revolution is decentralizing the economy in some fundamental ways, but it is a networked decentralization. That is why I am skeptical of the doomsayers about the world 50 and 100 years into the future. We overestimate how much change can happen in the near term - say five years - but radically underestimate what can happen in twenty years.

Top 1% Income Share Is The Same As 1999

From a post by Greg Mankiw (The One Percent, Updated):

Over the last sixteen years, the share of pre-tax income earned by the top 1% has ranged between 17% and 23%. I calculate an average of 20% over that time frame, precisely where it is today. Read Mankiw's post for more details.

A peculiar note: I suspect if you were to show this data from 1975 forward without the title and the y-axis label, many people would think this was a graph about global warming.

Globalization and Inequality: Two Complex Decades in One Simple Graph

Pew Research Center: Chart of the Week: How two decades of globalization have changed the world

(Source: Milanovic, B., Lead Economist, World Bank Research Department, Global income inequality by the numbers. Annotations by James Plunkett.)

I have seen the unannotated version of this graph several times, but the annotations really make things clear. The graph shows that much more is going on here than simplistic narratives of "The rich are getting richer, and the poor are getting poorer" (the graph discredits the second half of that statement) and the 1% versus everyone else.

A Richer World... but for whom?

BBC: A Richer World... but for whom?

We are getting richer. Not every human being on the planet and not every country. But the average person has an economic standard of living that's far better than it used to be.

One way of measuring it is to look at the amount of goods and services produced per person - gross domestic product or GDP per capita.

For the global population that rose almost fourfold in the 60 years up to 2010.

There were some marked divergences between countries. In China the increase was a stunning eighteen-fold. South Korea and Taiwan managed even more. On average, they are 25 times richer than in 1950.

A few countries, mainly in Africa, lost ground. In the Democratic Republic of Congo average living standards fell by more than half in the same period. ...

... One benefit from that is that we are living longer. In the middle of the last century a new-born baby could expect to live 50 years. Now the figure is 70. Once again there are large variations between countries but the favourable trend in that period is present in almost every nation - Botswana is the only one where life expectancy declined (by a few months). ...

... There is of course a debate, a rather vigorous one, to be had about just how bad a thing rising inequality really is. That is even more true of the question of what, if any, government policies should be employed to tackle it.

Rising inequality is a reminder that, richer though the world is, some people don't feel it.

This article does a good job of highlighting positive trends while also recognizing that improvements are uneven. The article touches on concerns about inequality, but the environmental impact and resource depletion issues must be raised. The key to wisdom is understanding that these positive and negative trends are all interconnected.

Is the greater concentration of wealth at the top (to the degree it is really happening) a by-product of the same forces lifting hundreds of millions of people out of poverty? If so, blindly attacking wealth inequality may thwart the progress of millions climbing out of poverty.

Is global economic growth improving the living standards of so many people also causing damage to the climate and environment to the point that one day soon, we will all see our living standards diminish? If so, blindly pursuing economic growth may diminish our quality of life.

The key is to think holistically. Populist movements usually take us in the opposite direction.

Invisible Fuel (and "Limits to Growth" Thinking)

Economist: Inivisble Fuel

THE CHEAPEST AND cleanest energy choice of all is not to waste it. Progress on this has been striking yet the potential is still vast. Improvements in energy efficiency since the 1970s in 11 IEA member countries that keep the right kind of statistics (America, Australia, Britain, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands and Sweden) saved the equivalent of 1.4 billion tonnes of oil in 2011, worth $743 billion. This saving amounted to more than their total final consumption in that year from gas, coal or any other single fuel. And lots of money is being invested in doing even better: an estimated $310 billion-360 billion was put into energy efficiency measures worldwide in 2012, more than the supply-side investment in renewables or in generation from fossil fuels.

The “fifth fuel”, as energy efficiency is sometimes called, is the cheapest of all. A report by ACEEE, an American energy-efficiency group, reckons that the average cost of saving a kilowatt hour is 2.8 cents; the typical retail cost of one in America is 10 cents. In the electricity-using sector, saving a kilowatt hour can cost as little as one-sixth of a cent, says Mr Lovins of Rocky Mountain Institute, so payback can be measured in months, not years.

The largest single chunk of final energy consumption, 31%, is in buildings, chiefly heating and cooling. Much of that is wasted, not least because in the past architects have paid little attention to details such as the design of pipework (long, narrow pipes with lots of right angles are far more wasteful than short, fat and straight ones). Energy efficiency has been nobody’s priority: it takes time and money that architects, builders, landlords and tenants would rather spend on other things. ...

Whether we are talking about climate change or peak resources, the tendency is to project current economic dynamics - like a ratio of energy usage per unit of GDP - indefinitely into the future and then make dire predictions of impending doom.

However, continuous innovation teaches us that such relationships are alterable. Until the early 20th century, there was a consistent linkage between the acreage in agricultural production and human population. It would have been unsustainable with the level of growth the next century would bring. One hundred years later, we now see that the global demand for agricultural land has flattened – and may even decline – even as the global population continues to grow, albeit at an ever-slowing rate.

Similarly, energy use and GDP have typically been closely related. What we see now is that energy and GDP are decoupling. Both are increasing, but energy is at a slower rate than GDP. Even as both global population and living standards rise, it does not follow that energy and resource usage will inevitably follow suit. Through innovations in engineering, nanotechnology, and recycling, nearly everything we use can eventually be made of renewable materials. We have only scratched the surface of power sources that are available to us. Dramatic innovation is underway in energy storage, transmission, and usage.

There unquestionably are challenges, but predictions of impending and inescapable collapse are not justified.

For more on decoupling and a link to an excellent video by Bjorn Lomborg on the fallacy of limited growth thinking, see my post, Limits to Growth: Still Wrong, Still Influential - Bjorn Lomborg.

Why I Won't Shut Up About Positive Changes in The World

Most people are exceptionally illiterate about the trajectory of demographic and economic changes in the world, believing the world is decaying. That leads many to disengage in hopelessness. Globalization combined with investment in human capital and infrastructure has put extreme poverty in rapid retreat. The global poor are not getting poorer. The world is getting better!

I have continuously pointed to evidence of these developments through social media for more than a decade. Not infrequently, posts about positive trends are met with incredulity and even anger. How can I speak of an improving world when so many are suffering? It is as if nothing positive may be acknowledged until total success is achieved. Yet the relentless focus on the negative, attempting to shame and guilt people into action (often with distorted and exaggerated data) drives people away from action into donor fatigue and hopelessness. There must be hope that things can get better.

A recent guest preacher recounted a scene from the end of Schindler’s List. Schindler, who saved 1,200 Jews from the Nazis, reproofs himself as he realizes that he might have saved at least one more person if he had sold his car or other possessions. He finds himself in a difficult place. How can he celebrate the lives saved when so many still died? But how can he not celebrate 1,200 lives that were indeed saved?

Endless fixation on the negative leads to despair and diminishes the value of lives that have improved. Such fixation is unwarranted and counterproductive, so I will continue with stories of hope and improvement. We need balance. We need hope. And based on the Barna data below, there is much work to do.

GDP Growing Fastest in Poor Countries

The world's poorest regions have been growing the fastest for at least twenty years. The Economist forecasts world GDP to be 2.9%, Asia and Australasia (less Australia) at 5.7%, and Sub-Saharan Africa at 4.5%. These rates indicate a considerable slowing of growth from recent years. The US forecast is 3.2%. This is more evidence that global inequality is shrinking, even though inequality within many nations is increasing. As the bottom of the economic ladder rises, so does the distance between the bottom and the top. A recent article forecasted that there would be no poor nations by 2050. I think that is likely. See: Gauging growth in 2015

The World is Not Falling Apart

Slate: The World is Not Falling Apart

Never mind the headlines. We've never lived in such peaceful times.

I've repeatedly revisited the theme in my blogging that the world is improving in many ways. That is routinely met with skepticism, even outrage. How can I be so insensitive as to say the world is getting better while millions are suffering and dying? Of course, the short answer is that I didn't say that the world has achieved perfection but only that it has gotten better.

I love these five paragraphs in the intro to this lengthy article:

... How can we get a less hyperbolic assessment of the state of the world? Certainly not from daily journalism. News is about things that happen, not things that don't happen. We never see a reporter saying to the camera, "Here we are, live from a country where a war has not broken out"—or a city that has not been bombed, or a school that has not been shot up. As long as violence has not vanished from the world, there will always be enough incidents to fill the evening news. And since the human mind estimates probability by the ease with which it can recall examples, newsreaders will always perceive that they live in dangerous times. All the more so when billions of smartphones turn a fifth of the world's population into crime reporters and war correspondents.

Amen!

We also have to avoid being fooled by randomness. Cohen laments the "annexations, beheadings, [and] pestilence" of the past year, but surely this collection of calamities is a mere coincidence. Entropy, pathogens, and human folly are a backdrop to life, and it is statistically certain that the lurking disasters will not space themselves evenly in time but will frequently overlap. To read significance into these clusters is to succumb to primitive thinking, a world of evil eyes and cosmic conspiracies.

Human beings are natural pattern seekers. Psychological studies show we often identify patterns where none exist.

Finally, we need to be mindful of orders of magnitude. Some categories of violence, like rampage shootings and terrorist attacks, are riveting dramas but (outside war zones) kill relatively small numbers of people. Every day ordinary homicides claim one and a half times as many Americans as the number who died in the Sandy Hook massacre. And as the political scientist John Mueller points out, in most years bee stings, deer collisions, ignition of nightwear, and other mundane accidents kill more Americans than terrorist attacks.

The only sound way to appraise the state of the world is to count. How many violent acts has the world seen compared with the number of opportunities? And is that number going up or down? As Bill Clinton likes to say, "Follow the trend lines, not the headlines." We will see that the trend lines are more encouraging than a news junkie would guess.

I love the distinction between trend lines and headlines! Consider that adage stolen.

To be sure, adding up corpses and comparing the tallies across different times and places can seem callous, as if it minimized the tragedy of the victims in less violent decades and regions. But a quantitative mindset is in fact the morally enlightened one. It treats every human life as having equal value, rather than privileging the people who are closest to us or most photogenic. And it holds out the hope that we might identify the causes of violence and thereby implement the measures that are most likely to reduce it. Let's examine the major categories in turn. ...

The quantitative mindset is indeed the most morally enlightened. It compensates for the human tendency to privilege information on what is happening to those geographically and culturally nearest to us. But it also counters a "parochialism of the present," where we discount the often greater suffering of those in the past relative to those who suffer in the present because the present is our context.

Be sure to read the whole thing. Here are just a few charts:

Chronic Hunger Falling, But One in Nine People Still Affected

World Watch: Chronic Hunger Falling, But One in Nine People Still Affected

Although the proportion of people experiencing chronic hunger is decreasing globally, one in nine individuals still does not get enough to eat. The United Nations Food and Agriculture Organization estimates that 805 million people were living with undernourishment (chronic hunger) in 2012–14, down 209 million since 1990–92 (Figure 1).

Keep in mind that the global population grew by one-third during the same period. About 18.7% of the world lived with chronic hunger in 1991, while 11.2% do so today. Had the percentages stayed the same as in 1991, there would be 1,340,000,000 people in hunger instead of 805,000,000. Things are getting better, but we have a long way to go.

People in Emerging Markets Catch Up to Advanced Economies in Life Satisfaction

Pew Research: People in Emerging Markets Catch Up to Advanced Economies in Life Satisfaction

People in emerging economies are considerably more satisfied with their lives today than they were in 2007. A Pew Research Center survey finds that publics in emerging nations now rival those in advanced economies in their self-reported well-being. The rise in happiness among middle income countries is driven in large part by attitudes in Asian nations, such as China, Indonesia and Malaysia. People in developing economies are also happier today than they were seven years ago, though the improvement has been more modest. ...

Here are graphs that summarize key findings:

It's Time To Admit It: The World Is Becoming A Better Place

Business Insider: OK, Haters, It's Time To Admit It: The World Is Becoming A Better Place

The article includes this graph:

Then this one about poverty:

Many other graphs could be shown about a host of important social indicators, but the article closes with the most important one: life expectancy. Improvements in life expectancy require that a wide range of variables move in a positive direction. For that reason, improving life expectancy is often a proxy for overall well-being.

The author closes with the following:

So complain all you want about how horrible everything is. There's certainly a lot left to fix. But as you complain, remember:

The world is getting better all the time.

Preach it!

23 Charts That Show Why This Is The Best Moment In History To Be Born

Business Insider: 23 Charts That Show Why This Is The Best Moment In History To Be Born

Here are a few of my favorites. Click through to see the rest. The big question is not how to stop the world from spiraling into chaos. The big question is how we get an improving world to improve more quickly and broadly. We have challenges ... climate and ecosystem impacts, evolving energy challenges, shift to renewable/recyclable resources ... but we have always had challenges. This is the golden era of humanity as it relates to material, physical, and political well-being. We just have to keep pushing to make it golden for everyone.

 

How not to be ignorant about the world - Hans and Ola Rosling

Hans Rosling, and his son Ola, nail it again. Excellent video. I have more to say about this in a coming post.

Since 1990, billions more have access to clean water

Christian Science Monitor: Since 1990, billions more have access to clean water

Over the past couple of decades, easier access to clean water has become a reality for a huge portion of the world’s population.

According to a publication released by the World Health Organization, an arm of the United Nations that monitors the health and well-being of people around the world, more than 2 billion people have gained access to an improved source of drinking water since 1990.

An “improved” water source is a water source that is likely not to be susceptible to outside contamination, especially by human waste, according to the UN’s WHO/UNICEF Joint Monitoring Program.

In addition to improved water sources, about 4 billion people have achieved the gold standard in clean water access: clean water piped directly into their homes. That’s well over half the world’s population.

This extraordinary step toward providing universal access to clean water has been the result of a massive global effort on behalf of governments, philanthropists, and nongovernmental organizations. ...

And you might want to add market exchange to the mix. It has also played a role.

Deforestation: Brazil is a success story for conservation

Christian Science Monitor: Deforestation: Brazil is a success story for conservation

"In the 1990s, tropical deforestation claimed 40 million acres each year, according to a report released in June by the Union of Concerned Scientists (UCS). Today, about 32 million acres of forests fall each year, a drop of about 19 percent. ...

...  The report cites a number of efforts that have led to deforestation’s decline. The researchers looked primarily at political policies, incentive programs, and economic reforms, limiting the scope of their study to countries and regions that displayed clear, tangible successes.

“Ultimately, the report shows that every euro, dollar, peso, rupee, dong, and African franc invested in these programs and policies is money well spent,” said Doug Boucher, the lead author of the study, in a news release. “The rewards far outweigh the costs.”

Brazil has effectively employed a suite of conservation methods. ...

Reasons to Be Cheerful

Matt Ridley: Reasons to Be Cheerful

We are prone to fixate on problems and threats. The news concentrates on Ebola, the Middle East and Ukraine violence, and the discord in Ferguson, Missouri. But it is important to keep present challenges (and they are more decidedly real) in context. Matt Ridley offers twelve reasons to be cheerful when we look at broader trends.

So let’s tot up instead what is going, and could go, right. Actually it is a pretty long list, just not a very newsworthy one. Compared with any time in the past half century, the world as a whole is today wealthier, healthier, happier, cleverer, cleaner, kinder, freer, safer, more peaceful and more equal.

1. The average person on the planet earns roughly three times as much as he or she did 50 years ago, corrected for inflation. If anything, this understates the improvement in living standards ...

2. The average person lives about a third longer than 50 years ago and buries two thirds fewer of his or her children (and child mortality is the greatest measure of misery I can think of).

3. The amount of food available per head has gone up steadily on every continent, despite a doubling of the population. Famine is now very rare.

4. The death rate from malaria is down by nearly 30 per cent since the start of the century. HIV-related deaths are falling. Polio, measles, yellow fever, diphtheria, cholera, typhoid, typhus — they killed our ancestors in droves, but they are now rare diseases.

5. We tell ourselves we are miserable, but it is not true. ...

6. education is in a mess and everybody’s cross about it, but consider: far more people go to school and stay there longer than they did 50 years ago.

7. The air is much cleaner than when I was young, with smog largely banished from our cities. Rivers are cleaner and teem with otters and kingfishers. ... Forest cover is increasing in many countries and the pressure on land to grow food has begun to ease.

8. We give more of our earnings to charity than our grandparents did.

9. Violent crimes of almost all kinds are on the decline — murder, rape, theft, domestic violence.

10. Despite all the illiberal things our governments still try to do to us, freedom is on the march.

11. The weather is not getting worse. Despite what you may have read, there is no global increase in floods, cyclones, tornadoes, blizzards and wild fires — and there has been a decline in the severity of droughts. ... there has been a steep decline in deaths due to extreme weather.

12. As for inequality, the world as a whole is getting rapidly more equal in income, because people in poor countries are getting richer at a more rapid pace than people in rich countries. ...

By all means, let us address the problems at hand, but let us also tap down the tendency to see only the negative and give in to gloom and despair.

The Hockey Stick of Human Prosperity

From MRUniversity, Everday Economics:

"We are pleased to announce a brand new course at MRUniversity, Everyday Economics. The new course will cover some of the big ideas in economics but applied to everyday questions. The first section, premiering now and rolling out over the next several weeks, features Don Boudreaux on trade. Tyler will appear in a future section on food. You can expect more from me as well. Indeed, you may spot both Tyler and I in some cameos (ala Stan Lee) in some of Don’s videos!

Here’s the first video on trade and the hockey stick of human prosperity."

The Poor Will NOT ALWAYS Be With Us

Excellent!

The Poor Will Not Always Be With Us - Dr. Scott Todd from Compassion International on Vimeo.