The $/day Game
Let's play a game. There is only one object of the game - to stay alive for a year.
A few ground rules. Pretend for a minute that you were taken back in time to 1996. Say you were given about $2 a day for an annual income of $700. You cannot make more money than that - meaning you cannot trade, buy stocks, etc. The total value of whatever it is that you choose to purchase cannot exceed $700. Say that you had to purchase everything you needed in life with just that money. Oh - and let's make it even tougher. You aren't just concerned with food and shelter. Water is no longer free. Now, how do you win? How do you live for a year?
This is a lot harder than it would seem. You can't just go buy the $1 hamburger at McDonald's on a daily basis. Otherwise you are left with about $350 to find housing and water for a year. Good luck with that. (Not to mention medical bills, etc.)
The thing is, this is precisely the problem faced by nearly 1,000,000,000 people around the world. In fact, hundreds of millions of people face even more dire conditions, with incomes of barely $1/day instead of the $2/day in our example.
Economists use special mathematical techniques to guage the standards of livings in different countries. They usually scale it to the equivalent of living in America in 1996, so that we can get a good comparative sense of what it would be like to live in that condition.
See, really poor people have trouble living from day to day. They aren't quite like the Berkeley bums that we are used to seeing. Most poor countries are in the tropics, where tropical diseases wreak havoc and land is very difficult to cultivate. So now add the fact that natural disasters are a frequent occurrence, and you are stuck with a group of people who can't grow food because of disasters and infertile soil, and can't harvest food because they are too sick and tired from being diseased. By the way, these malnutritioned and diseased guys have trouble going to school and get good jobs. Heck, teachers are malnutritioned and diseased as well, so they can't really teach well. Also, even if they were to carry their undernourished and sick bodies to school half the time the teachers don't show up, and even if they do, the starting salary after an education is only marginally higher than the salary before an education. So it would seem like a moo point - like a cow's opinion.
To all of this, add the fact that they collectively have water shortage problems, and we see that they are stuck being diseased, starving, really really thirsty, and meanwhile they are unable to get an education, can't find good jobs without the education they lack, couldn't find a job even with the education that they can't attain, and have a very difficult time growing food. Now that they are starving, thirsty, and uneducated, they are too tired to actually build themselves a thatched shelter - which, by the way, will likely be knocked over by the natural disasters aforementioned anyway.
Point being - poor people can't buy medicines, can't feed their children, can't get drinking water, can't get a decent education, don't have job opportunities, endure harsh weather, face horrible labour conditions, lack nutrition, endure starvation, frequently become diseased, and after suffering for several decades - poor people die much earlier than their richer counterparts.
This is where economic growth comes in. Economic growth isn't really important in terms of seeing what happens to a rich country's GDP. Economic growth means a larger pie for a poor country. Growth means more slices per person. More food. More medicine. Less hardships. Fed babies. More education. Longer lives. Growth is a means to combat all of the crap that insanely poor people endure. Growth means the capacity to move from merely living on a day-to-day basis to being able to have leisure time to enter in this discussion. Growth means their being able to embrace their humanity. Growth matters.
A few ground rules. Pretend for a minute that you were taken back in time to 1996. Say you were given about $2 a day for an annual income of $700. You cannot make more money than that - meaning you cannot trade, buy stocks, etc. The total value of whatever it is that you choose to purchase cannot exceed $700. Say that you had to purchase everything you needed in life with just that money. Oh - and let's make it even tougher. You aren't just concerned with food and shelter. Water is no longer free. Now, how do you win? How do you live for a year?
This is a lot harder than it would seem. You can't just go buy the $1 hamburger at McDonald's on a daily basis. Otherwise you are left with about $350 to find housing and water for a year. Good luck with that. (Not to mention medical bills, etc.)
The thing is, this is precisely the problem faced by nearly 1,000,000,000 people around the world. In fact, hundreds of millions of people face even more dire conditions, with incomes of barely $1/day instead of the $2/day in our example.
Economists use special mathematical techniques to guage the standards of livings in different countries. They usually scale it to the equivalent of living in America in 1996, so that we can get a good comparative sense of what it would be like to live in that condition.
See, really poor people have trouble living from day to day. They aren't quite like the Berkeley bums that we are used to seeing. Most poor countries are in the tropics, where tropical diseases wreak havoc and land is very difficult to cultivate. So now add the fact that natural disasters are a frequent occurrence, and you are stuck with a group of people who can't grow food because of disasters and infertile soil, and can't harvest food because they are too sick and tired from being diseased. By the way, these malnutritioned and diseased guys have trouble going to school and get good jobs. Heck, teachers are malnutritioned and diseased as well, so they can't really teach well. Also, even if they were to carry their undernourished and sick bodies to school half the time the teachers don't show up, and even if they do, the starting salary after an education is only marginally higher than the salary before an education. So it would seem like a moo point - like a cow's opinion.
To all of this, add the fact that they collectively have water shortage problems, and we see that they are stuck being diseased, starving, really really thirsty, and meanwhile they are unable to get an education, can't find good jobs without the education they lack, couldn't find a job even with the education that they can't attain, and have a very difficult time growing food. Now that they are starving, thirsty, and uneducated, they are too tired to actually build themselves a thatched shelter - which, by the way, will likely be knocked over by the natural disasters aforementioned anyway.
Point being - poor people can't buy medicines, can't feed their children, can't get drinking water, can't get a decent education, don't have job opportunities, endure harsh weather, face horrible labour conditions, lack nutrition, endure starvation, frequently become diseased, and after suffering for several decades - poor people die much earlier than their richer counterparts.
This is where economic growth comes in. Economic growth isn't really important in terms of seeing what happens to a rich country's GDP. Economic growth means a larger pie for a poor country. Growth means more slices per person. More food. More medicine. Less hardships. Fed babies. More education. Longer lives. Growth is a means to combat all of the crap that insanely poor people endure. Growth means the capacity to move from merely living on a day-to-day basis to being able to have leisure time to enter in this discussion. Growth means their being able to embrace their humanity. Growth matters.
posted by arun at 2:22 AM
5 Comments:
This comment has been removed by a blog administrator.
Define "Growth" in tangible terms and maybe I'll believe you.
Growth? Oh it is a direct reference to the growth of income. GDP expansion. Sorry, I probably should have been more clear about that. When someone says 'economic growth' they are referring to this.
Are the powerful interests out there that are openly "anti-growth"? Any stealth groups?
actually eric, a lot of anti-growth policies come from the left. to be sure a lot comes from the right too (if not more). it's just, the right brings stupid ideas like full liberalization of capital. they also bring evil. the left just seems to bring stupid only (autarkic policies)
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