Chart of the greatest and most remarkable achievement in human history

January 25th, 2014 at 12:00 pm by David Farrar

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Mary Perry at AEI writes:

Everybody’s featuring their “graphs and charts of the year,” like The Atlantic and theWashington Post (be sure to see Vice-President Joe Biden’s “Graph of the Year” on Amtrak ridership). Well, the chart above could perhaps qualify as the “chart of the century” because it illustrates one of the most remarkable achievements in human history: the 80% reduction in world in only 36 years, from 26.8% of the world’s population living on $1 or less (in 1987 dollars) in 1970 to only 5.4% in 2006.

And what has been the major reason for this huge success?

So what did that? What accounts for that? United Nations? US foreign aid? The International Monetary Fund? Central planning? No.

It was globalization, , the boom in international entrepreneurship. 

Yet so many who profess to care about the poor fight so hard against free trade.

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24 Responses to “Chart of the greatest and most remarkable achievement in human history”

  1. Pete George (23,567 comments) says:

    Ah, but that’s only up to 2006. Everyone on the left knows that since 2008 in New Zealand poverty and inequality have been deliberately increased by National so their rich mates can get richer.

    The grand aim is to make 99.9% of people paupers so the rich will be able to exploit them and make themselves heaps more dosh off people with no money.

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  2. unitedtribes (30 comments) says:

    Is it inflation adjusted?

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  3. SGA (1,039 comments) says:

    the 80% reduction in world poverty in only 36 years, from 26.8% of the world’s population living on $1 or less (in 1987 dollars) in 1970 to only 5.4% in 2006.

    So if you are earning more than $1 (in 1987 dollars), you are no longer in poverty?

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  4. Ross Nixon (559 comments) says:

    Increasing CO2 has helped – more plant growth!

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  5. Tautaioleua (305 comments) says:

    Ironically, China alone is responsible for three quarters of this achievement, DPF.

    “Its economy has been growing so fast that, even though inequality is rising fast, extreme poverty is disappearing. China pulled 680 million people out of misery from 1981-2010, and reduced its extreme-poverty rate from 84% in 1980 to 10% now”.

    http://www.economist.com/news/leaders/21578665-nearly-1-billion-people-have-been-taken-out-extreme-poverty-20-years-world-should-aim

    Other impoverished societies could learn from her. China has done in a few decades what Africa has tried now for centuries.

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  6. OneTrack (3,107 comments) says:

    Pete – “Everyone on the left knows that since 2008 in New Zealand poverty and inequality have been deliberately increased by National so their rich mates can get richer.”

    Even though the Nats haven’t materially changed most of the previous governments policies. Maybe Helen wanted her rich mates to get richer too?

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  7. F E Smith (3,305 comments) says:

    China has done in a few decades what Africa has tried now for centuries.

    I am not sure that is correct.  Much of Africa tried the socialist route in the 1960s, 70s, and even into the 80s (Ethiopian Famine, anyone?), and before that was colonial (which in some places was more successful).  Very little attention was or is paid to growing the respective national economies; indeed, in some places they have regressed significantly.

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  8. flipper (4,067 comments) says:

    Check out the similar graph that I posted below on “fisking”…it gives income and populatio9n data…up to date.

    The hole Oxfam/Kelsey/Green garbage……is, well, just that.

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  9. Sam Buchanan (501 comments) says:

    “It was globalization, free trade, the boom in international entrepreneurship. ”

    Simplistic. China’s poverty reductions rest mostly on changes in rural areas, especially dropping fixed prices for rice. Certainly, this is a matter of reducing government control of the market, but it’s more a matter of “don’t do anything completely ridiculous” than a win for free markets. There had been several decades of government-led development while globalisation and international trade is a fairly new phenomena for much of China – it seems a little too early to pass judgement on its impacts. China has a long way to go before it could be considered a real free-maket economy.

    The ‘dollar a day’ figure is a difficult one as it measures income, rather than quality of life. With urban drift many are moving from a mostly non-cash economy to a strictly cash one, doesn’t mean an urban beggar getting a dollar a day is better off than a rural farmer living a mostly subsistence lifestyle. A person living in, for example, Bangkok, on a dollar a day is still desperately poor.

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  10. PaulL (5,981 comments) says:

    The gates foundation annual letter covers similar themes – and is pretty clear on the hope they see for Africa.

    http://annualletter.gatesfoundation.org/?cid=bg_pt_ll0_012122/#section=home

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  11. PaulL (5,981 comments) says:

    All true Sam Buchanan, but it remains true that someone living on $1 (inflation adjusted 1987 dollars) a day is much better off than the same person living on 33c a day, or some other lower amount. That is the point that’s being made – not that $1 a day is enough, but that we’ve made enormous progress.

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  12. flipper (4,067 comments) says:

    PaulLis correct.

    What other reliable measure is there?

    The point about free markets and globalisation is that Oxfam and the Kelseys of the world claim globalisation/trade is setting back under developed nations.
    The reverse is true, but defining g points for each aspect of change is fraught.
    .
    It is the overall trend that is important. If the trend were in the opposite direction Kelsey et al would have a point.

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  13. Johnboy (16,597 comments) says:

    It’s all a filthy rightwing plot. Poor folk have only been getting just rich enough so they can spend their excess money on a widescreen TV to swell the incomes of the 1% cronies that make them! :)

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  14. SPC (5,619 comments) says:

    According to this most of the gain was realised between 1970 and 1985. A period of high inflation, when the value of a dollar changed a lot.

    The reduction in poverty has been profound, but this graph does not capture it well.

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  15. wat dabney (3,769 comments) says:

    Is it inflation adjusted?

    According to this most of the gain was realised between 1970 and 1985. A period of high inflation…

    The piece explicitly states it’s inflation adjusted.

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  16. SPC (5,619 comments) says:

    If it is not the impact of inflation in the 1970-1985 period, then what is it?

    Because we in New Zealand did not embrace free trade until 1984 and we were one of the first to open our markets to the world.

    Much of the decline was in China and India, China’s reforms prior to 1985 were internal and India was late to globalisation as well.

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  17. SPC (5,619 comments) says:

    One suspects it was improvement in food production in the developing world that led to the initial decline in poverty.

    This is the base allowing participation in the global market.

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  18. wat dabney (3,769 comments) says:

    New Zealand did not embrace free trade until 1984

    That’s hardly true. NZ has been exporting refrigerated goods since the 19th century, and before that there was wool exports.

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  19. SPC (5,619 comments) says:

    wat, you don’t think import licensing and our tariff regime – assembly of cars and electronics etc and the currency regime was of a pre global market era?

    Even Cuba exported cigars in the 1960’s/70’s. Every country exported and imported some goods before 1970.

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  20. tvb (4,422 comments) says:

    It was not socialism that did this it was China and India embracing capitalism and the huge turnaround in wealth. Now in NZ we have politicians think socialism can prevent global warming. If destroying an economy is required then maybe socialism might be the answer.

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  21. Sam Buchanan (501 comments) says:

    Hmmmm… does seem that when globalisation really got going, the rates of decrease in poverty fell. While during the ‘oil shock’ phase (1973-85), poverty declined sharply. Wonder what this means?

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  22. Bad__Cat (140 comments) says:

    I’ll believe there is actual poverty in NZ when all the “poor” people who live in state houses cannot afford to feed their (usually large) dogs, and have to eat them to stave off the hunger pangs.

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  23. wat dabney (3,769 comments) says:

    SPC,

    NZ’s crony capitalism – with all its manifold tariffs and restrictions – was still never a patch on India’s socialism and autarky, or China’s communism.

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  24. Yoza (1,875 comments) says:

    Yet so many who profess to care about the poor fight so hard against free trade

    Yeah, what Sam said. How is this chart an indictment of the corporate model when the largest decline (20%) happened between 1970 – 1985 when the corporate definition of ‘free trade’ was practically unheard of, yet post ’85 after the corporate agenda was imposed poverty rates fell a paltry 2% over the next 20 years?

    If anything this chart proves the exact opposite of the point Farrar is attempting to make.

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