Wednesday, July 16, 2008

Goldman Sachs bulletin: these are the good old days

Every now and then, the facts get in the way of near-universal pessimism about humanity's prospects for world peace and prosperity. Preoccupied with the admittedly very real specters of nuclear terror and proliferation, global warming, the rising power of police states, etc. etc., we tend not to notice that fewer and fewer people are dying of war, hunger or disease.

In today's Financial Times, courtesy of Goldman Sachs' chief economist Jim O'Neill comes a reminder, in the midst of rich-world economic turmoil (alarmingly surveyed on the same page by Martin Wolf), of the continued rapid spread of middle-class prosperity worldwide - and the continued reduction of poverty. Citing Goldman research, O'Neill writes that 70 million people year are joining the "world middle class"; allowing for a global slowdown, Goldman still forecasts acceleration to 90 million per year by 2030. Even more encouraging:
It is also evident that poverty is dropping dramatically around the world. According to our calculations, the number of people living on incomes of less than $1,000 dollars a year ($2.75 a day) has already dropped significantly from about 50 per cent of the world's population in the 1970s to 17 per cent by 2000. According to our numbers, it could be as low as 6 per cent by 2015. On the more familiar World Bank definition of one dollar a day, the same dramatic shift is evident. Probably no more than 5 per cent of the world's population now suffers this indignity. Of course, this is too much, but as long as the forces of globalisation continue we expect it to drop further.
Now, O'Neill is pushing Goldman research, and Goldman is pushing Bric and other emerging market economies, and these forecasts do raise as many questions as they answer. (For one thing, is 2 billion more people joining the world middle class by 2030 such a wonderful performance? How much will world population rise by then? A quick check on Google turns up forecasts of increases in the 1-2 billion range, e.g. an increase of 1.7 billion forecast by the Free World Academy). But the broad current trend of rapidly rising global wealth and "significantly declining" global inequality seems clear.

I've long felt that in that notwithstanding the horrific setbacks of the twentieth century, Hegelians (and more recently, Fukuyamans, if there's more than one) are essentially right: humanity is trending toward universal liberal democracy, peace, prosperity, and shared scientific enhancement of body, mind and conditions of life. The threats outlined above, or yet-unimagined horrors, could obviously derail this rosy scenario. But belief in human progress is not naive. It's where the evidence points.

2 comments:

  1. Andrew,

    You said: specters of nuclear terror and proliferation, global warming, the rising power of police states, etc. etc., we tend not to notice that fewer and fewer people are dying of war, hunger or disease.

    and

    belief in human progress is not naive. It's where the evidence points.

    Those threats don't begin to address the very real threat of too many people chasing too few resources. Oil, water and food are all in increasing demand by the very recent and rapid rise of the "world middle class". It's not just that we're bumping up against increasingly scarce resources, but our ability to produce those resources is being diminished by the haphazard way that we've gone about managing them up to this point.

    Best,
    Bunker

    ReplyDelete
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