Tuesday, March 24, 2009

The growth of poverty

I have heard people say things to the effect that we, the relatively rich of the world, can't continue hogging the worlds resources.

I think this is a misunderstanding of the problem -- not that I do understand it, of course. However, the view from 20,000 feet looks something like:

- 50 years ago, say, there were about 1/2 as many people in the world.
- In the last 50 years, the amount of global wealth has grown a lot.
- In the rich parts of the world, the amount of wealth per person has grown and the growth of the population has stopped.
- In the poorer societies, the wealth of the society has grown, but the wealth per person has not. They have produced more people, not more wealth per person. [I claim that the wealth of the society must have grown, or these societies could not have increased their populations so dramatically.]

Hence I conclude that the problem is that there is something structurally wrong with poor societies that prevents them from bringing their people up from poverty.

In this light, it is actually worth asking why the richer societies have provided more wealth per person when the norm through history is to have large numbers of poor and a few rich people in most larger societies. It seems to me that a large part of the reason is possibly the migration of a reasonably technologically advanced society to a new continent. That by itself isn't enough to explain the difference though, since the US, for example, provides more for its people than Mexico.

Another idea is that of the labor movement, which forced the owners of the means of production to share the proceeds with their laborers.

In more recent history, much of the wealth in the rich societies has come about as a result of skilled labor. These skills tend to be rare, in that they can take years to develop and there tend to be relatively few people who develop any given set. As a result, the people who have the skills tend to be valuable to those that would employ them, resulting in high wages.

In other words, I suspect that a highly technological and specialized society will tend to produce wealth for a larger segment of the society due to the high value of the specialized skills needed to make it work and the high barrier to entry (the time required) to gain those skills.

Tuesday, March 17, 2009

Another guess

So here's another guess at a possible future ...

In the next two to four years, the world economy more or less claws its way back to not shrinking. The US grumbles, but the rest of the world has more trouble.

After a while (e.g. 2-5 years), either China or Pakistan goes unstable. There is widespread civil unrest in those countries. At some point, Pakistan and India go to war.

Then the middle east and north africa go unstable. This causes oil production, which was dropping already, to drop quite a lot.

That in turn, affects food production, which was barely keeping up with population growth, to drop. Asia and Africa see local fighting, of the Somali pirates and Darfur crisis variety in much larger amounts.

The lack of food and civil disturbance drives people into environments, like refugee camps, in which many people are crowded together with minimal sanitation and food. These spawn epidemic diseases, which spread beyond the camps to the cities.

Some people react by forming into militias to take over their neighbors resources. Existing infrastructure (e.g. roads, bridges, farms, oil wells) is destroyed. This reduces the effective carrying capacity of the affected regions.

World population drops, due to starvation and disease, mostly, with some warfare thrown in.