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Mota Boy
03-05-2008, 05:21 AM
So. The topic of increasing income inequality is an oft-referenced phenomenon, especially in the United States, where almost all of the economic gains in the '90s went to the wealthiest 1% of Americans. Average income, in fact, is lower now (taking inflation into account) that it was a generation ago. Unlike past years, a majority of Americans don't believe their children will be better off than themselves.

And yet, all is not as it seems. The Economist ran an interesting article (http://www.economist.com/finance/displaystory.cfm?story_id=10328935) on the income gap a few months ago. Now, certainly, this doesn't excuse the biased US tax structure or mean that everything is hunky-dory, but it does toss in a couple ideas to keep things in pespective, and actually makes the case that the overall gap between the rich and poor is declining. Certainly, this is a case I've been making about the third world. For all the complaints of wealth concentration in the first world, over the past century, those in the third world have made enormous gains in terms of average daily calorie consumption, access to basic health care, literacy rates and other factors that income alone does not take into account. It would seem that these factors also reduce the overall lifestyle discrepancy within the first world also. I don't know if this can really launch a discussion, but it's something to keep in mind, and a bit reassuring that the world isn't actually going to hell.

wheelchairman
03-05-2008, 06:48 AM
This is the most important paragraph in the article, in that it sums up the entire article.

This compression is the predictable consequence of innovations in production and distribution that have improved the quality of goods at the lower range of prices faster than at the top. New technologies and knock-off fashions now spread down the price scale too fast to distinguish the rich from the aspiring for long.

This would then raise two immediate thoughts in my head.

1. That this neither negates nor affirms a widening of the gap between poor or rich. This is an historical process that has happened as long as we've had coins. It's as obvious as pointing out that there was a bigger difference between the Landed Aristocracy and their Serfs back in the middle ages, than there is between the Business Owner and his Employees. You progress forward in time and more items can be produced cheaper and more effective making them more available. (And at the same time the Serf becomes free and can eventually move up the social ladder etc. etc.)

2. The ever-growing market to make things cheaper (well I suppose the market is static since the cheap no-brand end has been around forever.) However the fact that more and more things are available for less and less would suggest that the major market lies in the lower income levels. (Which of course, it always has been since there will always be more lower-income people than upper-income people.) Just something interesting that I noted.

But it's about as telling as the income comparisons or the spending comparisons. What it does mean though is that even if our children earn less, they might not have a worse quality of life, so that's okay I guess.

Jesus
03-12-2008, 09:49 AM
WCM points are obviously correct.
But the Krueger study on which the Economist bases their article uses the the CEX (consumer expenditure) surveys, this has been basically debunked as useful for inequality studies. It shows for instance a savings rate of around 17% while it's in reality actually more around 1%. So a lot of stuff is missing. So this article is as dodgy as a Tom Friedman book on globalisation.

sKratch
03-12-2008, 06:42 PM
I have to note that at the time of this posting, Jesus has 666 posts. Shoot me.

HornyPope
03-12-2008, 09:54 PM
Good topic. There are many pieces I can pick on now, but I'm about to commence a paper on international development... I'll get back to you after I'm a bit more inspired from the readings or when I'm looking to procrascinate.

HornyPope
03-14-2008, 01:10 PM
My paper can wait. Few points that I wanted to squeeze in are the following:

First off, if the author wants to look beyond the consumption numbers, where better to start than with life expectancy index. A 100 years ago, everyone lived 50-60 years. Today, the first world has a life expectancy of about 75 whereas the third world has stagnated at 50... that kind of kills his entire argument, no? But let's continue...

Regarding the calorie intake, I don't know where you pulled your numbers from, but I think you're conclusions are dubious at best. A 100 years ago, the agrarian society, excluding periods of famine and war of course, had at least provided basic food for everyone. Today, the third world farmers are increasingly struggling with the question of what to grow for oneself versus what to export. And with the corn prices and grain prices going up on the international index, it becomes that much harder to keep the crops for yourself. Because you have to sell enough so you can afford to buy the grains for the future!!!

Regarding the measurement utility-derived satisfaction... how the fuck can you make a comparison when you're not comparing the same goods? That the rich are less satisfied with owning so much wealth is possibly due to the fact that it's more common to encounter a multi-millionaire nowdays, thereby reducing the prestige of such status. However, you cannot measure satisfaction across classes when the poor, for the most part, are ignorant of the some of the toys the rich have and therefore could not rate their own toys in a head-to-head comparison. This entirely invalidates this particular study.

Now the drop in prices is true, and although a lot of it was induced due to lower technology and production costs that we can think first-world R/D departments for, much of it is still owed to the low, low labour costs and the low (albeit rising) cost of raw materials, which are fixed by multi-nationals and financial markets. While this relationship of poor-providing-for-the-rich continues, how can one talk about equality?

Now, as far as the health goes, my argument is ethical more than anything... but, how the fuck call it "progress" when the poor receive only a fraction of the medical benefits available to the rich? How can you call it progress when millions of people still die of preventable diseases every fucking day? That we've gone from 5 million a week to 2 million a week dying from preventable diseases, while the global expenditure on plastic surgery increased from 1 billion a year to 500 (not actual statistics), is not fucking progress. It means our "health" providers are developing in all the wrong directions. It means thousands of hours in labour and billions in R/D and investment in new machines that could have gone towards curing actual diseases has been wasted away on stupid, useless bullshit. How the fuck is this progress?
The rich can buy a kidney for 40k on the black market, while the poor folks who sell it earns about 500$ (factual stats). The rich travel to India or Eastern Europe for a surgery that costs a third of what it costs in America, but in the process they raise up the prices in these developing countries for the local population. How the fuck is this progress?

Hmm... anything else I'm forgetting?

Mota Boy
03-14-2008, 02:23 PM
Jesus - don't know much about the CEX surveys, I'll have to look that up.


My paper can wait. Few points that I wanted to squeeze in are the following:

First off, if the author wants to look beyond the consumption numbers, where better to start than with life expectancy index. A 100 years ago, everyone lived 50-60 years. Today, the first world has a life expectancy of about 75 whereas the third world has stagnated at 50... that kind of kills his entire argument, no? But let's continue...According to this handy-dandy map (http://en.wikipedia.org/wiki/Image:Life_Expectancy_2007_Estimates_CIA_World_Fac tbook.PNG) I found on wikipedia, the only place with the life-expectancy you cited was sub-Saharan Africa, not only one of the last places to be touched by globilization (though the economy has recently been growing at a 6% clip for several years now), but also the place most ravaged by AIDS, which artificially skews the numbers. In all other respects, it seems that, by your own definition, the third world is movin' on up quite nicely.


And with the corn prices and grain prices going up on the international index, it becomes that much harder to keep the crops for yourself.[/b] Because you have to sell enough so you can afford to buy the grains for the future!!!So, wait... high food prices are bad for farmers? Are you actually saying that farmers are selling an increased percentage of their crop because the prices are so good they can't afford not to? And that these farmers having more money (as they're selling a higher percentage of their crop at a record price) is a bad thing?

I can't track down the exact numbers, but this (http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VC6-4F02KWN-8&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=d2424b729e9a980e6555ea1f5699dd0e) seems pretty on-track. 100 years ago, periods of famine and war were fairly common. Almost certainly once a lifetime, if not once a generation or once a decade. In the intervening decades, transportation costs have shrunken dramatically, allowing food to become relatively equally distributed across an entire nation (much harder to accomplish in the third world at the turn of the last century). Meanwhile, revolutions in fertilizers and industrialization have caused the price of food, relative to the average wage-earner's income, shrink dramatically, as well as introducing a wider variety of foodstuffs into the average person's diet.

Over the past century, calorie consumption in the third world has increased dramatically, with great beneficial effects on the population, even as it's... what, quadrupled?


However, you cannot measure satisfaction across classes when the poor, for the most part, are ignorant of the some of the toys the rich have and therefore could not rate their own toys in a head-to-head comparison. This entirely invalidates this particular study.All you're saying here is that this isn't fair because the poor are happier than you think they should be... if they were as miserable as you think they should be, then they'd be miserable enough to fit your argument.

[QUOTE=HornyPope;1089181]Now the drop in prices is true, and although a lot of it was induced due to lower technology and production costs that we can think first-world R/D departments for, much of it is still owed to the low, low labour costs and the low (albeit rising) cost of raw materials, which are fixed by multi-nationals and financial markets. While this relationship of poor-providing-for-the-rich continues, how can one talk about equality?[QUOTE=HornyPope;1089181]Because equality in life expectancy, calorie consumption, health care, infant mortality, literacy rates and happiness have a much great impact on overall equality than the commodities market does, and because a great many of those gains of the former come from cheap commodity prices.

[QUOTE=HornyPope;1089181]Now, as far as the health goes, my argument is ethical more than anything... but, how the fuck call it "progress" when the poor receive only a fraction of the medical benefits available to the rich?[QUOTE=HornyPope;1089181]Because medical care isn't a relative good, it's an absolute good. Fifteen extra years of life expectancy is good even if someone else gets thirty. Also, it's a historical fact that, over time, medical advances trickle down from the wealthy (individuals and nations) to the poor. Technology has been advancing at an increased pace, so the wealthy today have a disproportionately more advantaged position than they ever have, but it's only temporally disproportionate. The same advances that push vaccines into the furthest reaches of the globe and dump anti-viral drugs in Africa will eventually make today's most expensive procedures increasingly affordable. Compared to a century ago, people from ever social strata, in almost every country, have made enormous strides in their overall health. I sure as hell consider that progress.

HornyPope
03-14-2008, 05:03 PM
According to this handy-dandy map (http://en.wikipedia.org/wiki/Image:Life_Expectancy_2007_Estimates_CIA_World_Fac tbook.PNG) I found on wikipedia, the only place with the life-expectancy you cited was sub-Saharan Africa, not only one of the last places to be touched by globilization (though the economy has recently been growing at a 6% clip for several years now), but also the place most ravaged by AIDS, which artificially skews the numbers. In all other respects, it seems that, by your own definition, the third world is movin' on up quite nicely.
My point is : we have a large disrepancy between life expectancy throughout the world, most noticeably between the first and the third world. Although, in general, it has gone up, it hasn't gone up for everyone, creating a wide gap that probably wasn't as wide a century ago--back when everyone in the world had the same life expetancy.


So, wait... high food prices are bad for farmers? Are you actually saying that farmers are selling an increased percentage of their crop because the prices are so good they can't afford not to? And that these farmers having more money (as they're selling a higher percentage of their crop at a record price) is a bad thing?

I can't track down the exact numbers, but this (http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VC6-4F02KWN-8&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=d2424b729e9a980e6555ea1f5699dd0e) seems pretty on-track. 100 years ago, periods of famine and war were fairly common. Almost certainly once a lifetime, if not once a generation or once a decade. In the intervening decades, transportation costs have shrunken dramatically, allowing food to become relatively equally distributed across an entire nation (much harder to accomplish in the third world at the turn of the last century). Meanwhile, revolutions in fertilizers and industrialization have caused the price of food, relative to the average wage-earner's income, shrink dramatically, as well as introducing a wider variety of foodstuffs into the average person's diet.

You have to ask yourself who is able to afford this food and who isn't. Today, many of us can afford to buy fruits and veggies in the off-season. Many, but not everyone. A century ago, no one was able to buy fruits and veggies in the off-season.

So tell me: did the divide increase or did it narrow?

Isn't this what your article arguing: that everyone is now richer and happier as a result of progress, and while progress wasn't proportionatly distributed along the world, this progress nevertheless benifited everyone. Right? Well, I'm saying, it made life much better for some, somewhat better for others, but then there are also those who were completly left off by the system; and not a small number either.


Because medical care isn't a relative good, it's an absolute good. Fifteen extra years of life expectancy is good even if someone else gets thirty.
That's not what you said here...

[The article] actually makes the case that the overall gap between the rich and poor is declining. Certainly, this is a case I've been making about the third world.
Contradictions aside, I'll come back to what I said earlier: I don't think our society is evolving when the expenditure in cosmetic surgery grows something like 100 times faster than in medicine (not actual stats). That you should tell someone he should be happy that, in the process, he gains another 15 years of life expectancy is the kind of ethno-centric (for lack of a better word) argument I expected from you.
Hmm... I'm tempted to finish this paragraph with a bang but I'm not sure how to phrase it and I've studied all day and... eh, it doesn't matter. I'm sure I'll get back to it later.

Mota Boy
03-14-2008, 11:20 PM
My point is : we have a large disrepancy between life expectancy throughout the world, most noticeably between the first and the third world. Although, in general, it has gone up, it hasn't gone up for everyone, creating a wide gap that probably wasn't as wide a century ago--back when everyone in the world had the same life expetancy.You claimed life expectancy in the third world has remained stagnant at 50 years, for a century. The facts of the matter in no way confirm that. To suddenly backtrack and claim "Well, it probably wasn't as wide a century ago" - completely without any proof other than your own conjecture, is a bit ludicrous in light of your original premise being so flat-out wrong.


You have to ask yourself who is able to afford this food and who isn't. Today, many of us can afford to buy fruits and veggies in the off-season. Many, but not everyone. A century ago, no one was able to buy fruits and veggies in the off-season.

So tell me: did the divide increase or did it narrow? The buying-fruit-in-the-off-season divide? I can buy any type of fruit here on the streets in China, in the off-season, for pennies. Where's the gap? You seem to be claiming here that a technological breakthrough should either be available to all or none - that it's fundamentally unfair for one person to have something while another doesn't.

I'm pointing out that everyone is getting better, even if some are (at any one moment) getting better faster. Any "gap" will be covered in a few years or decades. Again, I completely fail to see how this is a bad thing.

And back to my original point - yes, high food prices are bad, but not for farmers. Citing subsistence farmers as being hurt because they're suddenly able to charge much more for their crops is a ridiculous argument.


Isn't this what your article arguing: that everyone is now richer and happier as a result of progress, and while progress wasn't proportionatly distributed along the world, this progress nevertheless benifited everyone. Right? Well, I'm saying, it made life much better for some, somewhat better for others, but then there are also those who were completly left off by the system; and not a small number either.And I'm saying that you're wrong. But that's what all these other arguments are for - showing that step by step.


That's not what you said here...You're mixing up my arguments. The first one you quoted was specifically referring to access to the latest medical technology; the second quote referred to calorie consumption, life expectancy, literacy rates, etc. - the overall gap. Just because one facet of the gap may be increasing it in no way means that the overall gap is increasing. Relative to overall happiness, being able to read, having your children survive to adulthood and getting sufficient nutrition is fucking miles beyond access to open-heart surgery. And even though the access to medical technology may be increasing, that's only one facet of overall health. Again, access to the polio and smallpox vaccines closes a gap much, much more important than the access to gene therapy gap.


Contradictions aside, I'll come back to what I said earlier: I don't think our society is evolving when the expenditure in cosmetic surgery grows something like 100 times faster than in medicine (not actual stats). That you should tell someone he should be happy that, in the process, he gains another 15 years of life expectancy is the kind of ethno-centric (for lack of a better word) argument I expected from you.Of course that isn't an actual stat! You haven't cited a single actual stat or historical fact in any of your arguments - they consist entirely of unresearched conjecture overlaid with tones of moral superiority. It's as if you believe that the gap is so obvious to anyone who merely *thinks* about it that bothering to confirm your hypothesis would merely be superfluous.

And accusations of "ethno-centrism" (or an idea that roughly approximates it) are quite ironic considering that I'm writing this from my apartment in a third-tier Chinese city, while you're writing yours from an apartment in Canada, one of the wealthiest nations in the world. From this vantage point, I can witness progress firsthand. In the past three decades, China alone has moved 500,000,000 people out of poverty. Seriously Vlad, you've gotta come out here and see what's going on (and yes, in the countryside too, I've been out there) - it's absolutely unbelievable.

HornyPope
03-16-2008, 09:56 PM
You claimed life expectancy in the third world has remained stagnant at 50 years, for a century. The facts of the matter in no way confirm that. To suddenly backtrack and claim "Well, it probably wasn't as wide a century ago" - completely without any proof other than your own conjecture, is a bit ludicrous in light of your original premise being so flat-out wrong.
Life expectancy in the third world has remained stagnant. I never backtracked from that statement. Here is what I said in previous post along with some edits for easier reading: "we have a large disrepancy between life expectancy throughout the world, most noticeably between the first and the third world. Although, in general [around the globe], it has gone up, it hasn't gone up for everyone [like in Africa, for example], creating a wide gap [between the third and the first world] that probably wasn't as wide a century ago--back when everyone in the world [first and third alike] had the same [more or less] life expetancy".

And here (http://en.wikipedia.org/wiki/Image:Life_expectancy_1950-2005.svg) is the proof if you like. As you see, while most areas around the world has seen increases, the third world hasn't. Well, unless you call 5 years an increase. So yes, the gap in life expectancy between the poor nations and the rich nations has widened.


The buying-fruit-in-the-off-season divide? I can buy any type of fruit here on the streets in China, in the off-season, for pennies. Where's the gap? You seem to be claiming here that a technological breakthrough should either be available to all or none - that it's fundamentally unfair for one person to have something while another doesn't.

I'm pointing out that everyone is getting better, even if some are (at any one moment) getting better faster. Any "gap" will be covered in a few years or decades. Again, I completely fail to see how this is a bad thing.

And back to my original point - yes, high food prices are bad, but not for farmers. Citing subsistence farmers as being hurt because they're suddenly able to charge much more for their crops is a ridiculous argument.
Typically, there are international prices set for most imported goods. For instance, according to this graph in the end of the page (http://www.unctad.org/infocomm/anglais/banana/prices.htm#retail), bananas are sold for anywhere from 200 to 500 dollars a ton, depending on the producer. This translates to retail prices ranging from a dollar to two dollars according to the same article. So while the western world can afford to pay these prices for imports, can the third world (pay these prices)? Of course not.
So like I said in my quote: a hundred years, none of us could have fruits and veggies in the off-season because transportation and storage costs made it prohibitive. Today, the first world can afford as much banana as they can eat, but not the third world. Therefore, the devide only grew.

Anyways, that was just an example. I just wanted to show you how we're all subject to international economy, except only certain of us can afford the supply and demand conditions created under this international economy. The third world and most of the developing world can't.


You're mixing up my arguments. The first one you quoted was specifically referring to access to the latest medical technology; the second quote referred to calorie consumption, life expectancy, literacy rates, etc. - the overall gap. Just because one facet of the gap may be increasing it in no way means that the overall gap is increasing. Relative to overall happiness, being able to read, having your children survive to adulthood and getting sufficient nutrition is fucking miles beyond access to open-heart surgery. And even though the access to medical technology may be increasing, that's only one facet of overall health. Again, access to the polio and smallpox vaccines closes a gap much, much more important than the access to gene therapy gap.

I don't have a background in medicine so I don't know much about specific diseases, but I do know they account for millions in death in the third and developing world. Numbers that are way, way higher per capita than we have in the West. No, I'm not up in arms that not everyone has equal access to open heart sugery. But I am pissed off that the pharmaceutics and the comesticals invest billions for all kind of shit for the West, while millions of Africans don't have access to basic vaccination. No, I don't have statistics. I read it somewhere but I don't remember where. Look it up yourself if you care.
Like I said initially, it's an ethical argument more than anything. I don't know what rate of malaria was 100 years ago, but I read that the estimates for 2005 are anwyhere from 300 to 500 million (killing between 1-5 million people annually). If you're happy to call it progress, go ahead and call it progress. I'm not going to argue ethical arguments.

Jesus
03-17-2008, 06:03 AM
Jesus - don't know much about the CEX surveys, I'll have to look that up.


Here are 2 good short introduction papers
http://www.cbpp.org/11-28-06inc.pdf
http://www.nber.org/papers/w10338.pdf
(edit: in case you don't have subscription access to nber, here is the same paper without one: http://www.homepages.ucl.ac.uk/~uctpjrt/abi_0204.pdf)

Mota Boy
03-17-2008, 06:25 AM
And here (http://en.wikipedia.org/wiki/Image:Life_expectancy_1950-2005.svg) is the proof if you like. As you see, while most areas around the world has seen increases, the third world hasn't. Well, unless you call 5 years an increase. So yes, the gap in life expectancy between the poor nations and the rich nations has widened.Vlad, that graphic shows that the life expectancy gap has shrunk. North America and Europe went from about 69 to 77, and 66 to 75, respectively, while South America went from 54 to 72, Central America 50 to 73 and North Africa, the Middle East and Asia all shooting upwards from 44 to 67. The gap from the top to bottom is now ten years, where as fifty years ago it was two and a half times that amount.

You'll note that the only region I'm leaving out - the outlier that you seem to have assumed represented the third world - is Sub-Saharan Africa. As I mentioned earlier, this is due to the AIDS epidemic, which is a special case (and, in fact, it's wealthy nations, led by the United States that are delivering condoms and subsidized anti-viral drugs to the continent).



Typically, there are international prices set for most imported goods. For instance, according to this graph in the end of the page (http://www.unctad.org/infocomm/anglais/banana/prices.htm#retail), bananas are sold for anywhere from 200 to 500 dollars a ton, depending on the producer. This translates to retail prices ranging from a dollar to two dollars according to the same article.Vlad, I'm telling you - bananas here cost about twenty-five cents each. I can go outside right now, walk a two blocks and come across three fruit stands selling them at that price. And yes, most everybody can afford that. Remember! The third world is exporting the bananas, the first world importing. Bananas are much cheaper in the countries that grow them (though I don't believe China is a banana-growing nation).

And not just that, but look at the countries that are importing, verses the ones that are exporting! France, the UK, the US, Japan - the countries listed as banana importers are all first world, whereas the banana exporting countries - Columbia, Costa Rica, the Phillipines - are all third-world nations! The higher banana prices are helping the banana growers! High banana prices are good for the third world economies!


So while the western world can afford to pay these prices for imports, can the third world (pay these prices)? Of course not.
So like I said in my quote: a hundred years, none of us could have fruits and veggies in the off-season because transportation and storage costs made it prohibitive. Today, the first world can afford as much banana as they can eat, but not the third world. Therefore, the devide only grew.OK, first of all, isn't it a bit silly not to measure progress in terms of life expectancy, caloric intake, literacy or infant mortality, but in terms of which months a person can buy a strawberry? That's like saying "Yeah, sure everyone can read now, but the Wii gap is 30 to 1!" We're well within the range of diminishing marginal returns when we stop discussing the proper nutrients received and the relative variety of certain flavors by the month.

Secondly, the dichotomy is a false one. Once again, there isn't much of an off-season here in China. Also, a century ago, most people in the third world didn't have access to any exotic foods at any point during the year. There was no fruit season at all! The third world now has a much greater variety of food than it did a century ago, thanks to international trade and technology advances.



I don't have a background in medicine so I don't know much about specific diseases, but I do know they account for millions in death in the third and developing world. Numbers that are way, way higher per capita than we have in the West. No, I'm not up in arms that not everyone has equal access to open heart sugery. But I am pissed off that the pharmaceutics and the comesticals invest billions for all kind of shit for the West, while millions of Africans don't have access to basic vaccination. No, I don't have statistics. I read it somewhere but I don't remember where. Look it up yourself if you care. They're lower. Disease rates are lower, globally. Which is why the life expectancy for over half the world (the Middle East and Asia) has increased by over 58% in fifty years.

Also, I think you have the wrong perspective on this, here. The wealthy nations of the world have helped fund billions of dollars of health initiatives in the developing world, not to mention produced the vaccines and the medicines in the first place that help citizens around the globe. Polio is no longer a scourge anywhere, smallpox (which killed an estimated 300 to 500 million people in the 20th century) is a memory.

Malaria is a tropical disease - it is simply unable to survive in the Northern hemisphere. It's like pointing out that there's a huge gap in earthquake deaths between California and Kansas, so Kansas must be more advanced than Cali.


If you're happy to call it progress, go ahead and call it progress. I'm not going to argue ethical arguments.I don't think whether or not to call a 58% increase in life expectancy for a majority of the planet's population "progress" is an ethical argument. I think it's a debate over semantics, because if an unprecedented upswing in life expectancy isn't the dictionary definition of "progress", I don't know what it.

Jesus
03-17-2008, 07:33 AM
Sure there is worldwide 'progress', despite the system, not because of it. Just as the lives of slaves improved despite slavery, not because of it.
It just could be achieved better and faster.

(although nationally the 'despite of' doesn't seem to hold anymore regarding some countries, including the US as most actual research shows)



I'm pointing out that everyone is getting better, even if some are (at any one moment) getting better faster. Any "gap" will be covered in a few years or decades. Again, I completely fail to see how this is a bad thing.


To quote Keynes: In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.



High banana prices are good for the third world economies!


Not necessarily, it depends on how you define an economy (just standard GDP, foreign reserves, trade balance, or consumer ppp etc). If you chose the side of consumers for instance then it becomes tricky. Whether high banana prices (or other food prices) are good for the exporting country itself then, depends on the consumer basket of the locals there.

Given that "trade" itself implies a relative decline of import prices and a relative rise in export prices (that's basic economic theory, although scale economies, which implies imperfect markets, alter it a bit) it depends on the relative weight of goods in a consumer basket. Given that poor people generally have a basket that leans towards food or basics (thus export), it means a decline in purchasing power and living standards. Because cheaper lcd tv's generally don't have an impact on their consumer basket.

This was basically the reason for the Argentinian beef crisis a few years ago, and recently with Ukraine. And this is obviously the problem in many African countries where cheap (dumped) mostly European food is generally good for consumers, but at the same time it drives local farmers out of business. The opposite results in higher prices for the locals, if they are able to pay it.


Also, I think you have the wrong perspective on this, here. The wealthy nations of the world have helped fund billions of dollars of health initiatives in the developing world, not to mention produced the vaccines and the medicines in the first place that help citizens around the globe.

The amount of foreign aid is negatively correlated to the amount of inequality in a domestic society, so the future isn't that positive though.

HornyPope
03-17-2008, 10:32 PM
I just remembered I have a chemistry paper due tomorrow so I'm working on that... after which, I'll have to revert to my original paper over international development. Actually, the heading is misleading. What I really am going to write about is crime and corruption in the third world and its relation to development.
Speaking of the third world, I think both you and I don't use the same lingo. I guess it's my fault since I introduced that term into the thread but what I really meant all along was the "least developed countries" (http://www.un.org/special-rep/ohrlls/ldc/list.htm). Hope that clears some confusion.

Anyways, I'll try and get back to the thread next week probably.