How Poor is Poor?
By Amy Willis
Should economists rethink the widely held view that redistribution from rich nations to poor nations makes the world a better place? 2015 Nobel laureate Sir Angus Deaton thinks so. That’s the topic of conversation in this week’s EconTalk episode.
So are you a cosmopolitan prioritarianist? A try-it-out-atarianist? Do you feel more sympathy for your fellow countrymen or those in the poorest parts of the world?
1. Why does Deaton think making the claim that everyone is better off as a result of trade and globalization is “intellectual hucksterism,” and to what extent do you agree?
2. Roberts imagines a farmer in 1900 being offered the following bargain:
A farmer in 1900 who is told, ‘I have bad news for you. Your sector is going to be devastated by technological change. Your children and grandchildren will not grow up to do what you do and what you dream of them doing. But don’t worry: here’s what their life looks like,’ they wouldn’t say, ‘Oh, that’s a terrible deal. Don’t do that to me.’ They’d say, ‘Thank you. My children will live long. They will have rich lives of meaning. And they will also have tremendous material wellbeing.’
While Roberts feels sure of this, Deaton is skeptical. To what extent do you think these hypothetical 1900 farmers would react this way, and why?
3. One of Deaton’s main assertions is that people can (and indeed ought) feel more sympathy with those closer to us. Another famous Scotsman, Adam Smith, wrote the following:
Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connexion with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befal himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own. To prevent, therefore, this paltry misfortune to himself, would a man of humanity be willing to sacrifice the lives of a hundred millions of his brethren, provided he had never seen them? Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference?
What does make this difference, and how does this description of man’s natural sentiments apply to the question of cosmopolitan prioritarianism raised this week by Deaton?
4. How has this episode change the way you think about the poor and how best to help them? Some additional food for thought:
- Whether we decide to attend more to our neighbors or those whom we don’t know, how do we know who’s really poor? Deaton argues that the poor in America are incorrectly perceived to be better off than they are. Morten Jerven, in this 2015 episode, argues that Africa is experiencing much higher growth and standards of living than we typically believe.
- And even if we can determine who’s really poor, how do we know that our efforts to help are truly effective? Will MacAskill argues most aren’t, in this 2015 episode. So how do we best direct our efforts? Would Deaton agree with MacAskill?