Friday, August 21, 2009

Reconsidering the end of poverty

Wall Street Journal:

The lack of growth is hurting the nation's poor. A recent World Bank report estimated that the crisis will push an additional four million Mexicans below the poverty line this year alone.

In a purely quantitative sense, "the poverty line" is a popular concept. If you earn above X amount of income in a sweatshop, you have been lifted out of poverty. Congratulations!

On the other hand, if you grow your own food and trade this with others for the things you need, you may not earn any income at all. Or maybe you earn a little income on the side, as needed. Still, your income is smaller than most, because many of your needs are already met. This is a travesty, and the developed world is doing everything in its power to stop it.

In Mexico, this was called NAFTA. Under this trade agreement, Mexicans now had the luxury of buying their most important staples, like corn, from large industrial growers in the United States. Corn from the United States suddenly became much cheaper than corn sold by small farmers in Mexico, in large part because US taxpayers subsidize it.

This made being a small farmer in Mexico very, very hard. It no doubt contributed to many family members ending up in urban sweatshops and/or somewhere in the Arizona desert in the hopes of sending money back home. It also pushed people into the drug, human trafficking, and other lucrative trades.

All of this contributed handily to economic growth, as intended. After all, there's lots of money to be made off the backs of desperate children. Many have since been featured prominently in the New York Times and elsewhere, detailing how they like the newfound freedom and independence that comes with working for a wage, buying consumer products, and being the heroes of the new global economy.

Such opportunities have contracted in the advent of the financial crisis, which means plenty of poverty to go around, especially now that traditional rural farming is impossible. Still, around the globe, many children are returning home, for lack of any other option. At least they will get to see their families again!

No comments: