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free_markets
The development of free market economies has been accompanied by a large decrease in poverty around the globe. Extreme poverty is virtually nonexistent in the most industrialized countries.

Many people believe that after the fall of the Soviet Union more than 20 years ago, the world went through a wave of globalized development. Capitalism spread and free markets were adopted in numerous countries. Industries became a focus of countries everywhere.

Thirty years ago, 50 percent of people in poor nations were living in extreme poverty. Since the development of global markets, however, 21 percent of people in poor nations around the world are considered to be living in extreme poverty.

Capitalism has some clear effects on a country’s economic system, and therefore on its citizens. Free markets open up trade opportunities, increase competition for jobs and extend life expectancy.

When countries use free markets, they immediately become a global partner in trade. They are more able to import and export their products to a larger market, thus increasing their economic wealth greatly. Countries with higher economic success generally see less poverty in their citizens.

In a capitalistic system, jobs are given to those who work for them, and the workers only get paid when they complete their requirements. When there are more people than positions available, people will increase their efforts to rise above the rest and claim that position. Creating a competitive environment can increase the effort people put forward. Efforts to alleviate poverty must come from a system that rewards productivity and industriousness.

With the increase of economic prosperity in countries with many people living in poverty, they can move from the lowest global income bracket to the middle-income bracket. Data shows that by moving up in economic status, life expectancy increases. When people are in the lowest bracket, life expectancy is around 40; however, in the middle bracket, it increases to 60.

As seen in past experience, developing the free market system may be the best solution for the countries that are facing large amounts of poverty.

Ismael Hernandez, a writer for News-Press.com, said, “Wherever culture and institutions focus on creative and productive activity, you put in motion processes where great civilizations emerge and the lives of people are enhanced.”

— Hannah Cleveland

Sources: Market Oracle, News-Press
Photo: BlogSpot

inclusive capitalism

Inclusive capitalism is becoming a frequently used phrase to describe a large number of economies around the world. However, in both developing and developed countries, the capitalist system in these places seem to be showing more holes. These economies that claim to support the entire people in a fair way are seeing greater inequalities than ever before.

In its most basic form, capitalism aims to uphold all citizens to the same standards, same opportunities and same rewards.

“[The capitalist system consists of] relative equality outcomes; equality of opportunity; and fairness across generations,” said Mark Carney, the Bank of England’s new governor.

The U.N. Development Programme found that income inequality in developing countries has risen by 11 percent over the past 20 years.

Undeveloped countries using a flawed capitalist system are caught in a bad cycle. The inequality seen in the economy creates a barrier for further development. However, a system that supports all citizens is far more likely to improve than one that focuses solely on the elite. Especially in countries that face severe poverty, if the low-end jobs are not supported by the government or provided substantial pay rates, then people will be less inclined to work in these positions. This deters the people in poverty from attempting to change their situation.

When a country emphasizes the importance of all workers, it provides an investment in its people and their labor.

Problems with capitalism are not contained to developing countries, however. Because 80 percent of countries around the world operate on a capitalist economy, it makes sense that ensuring the principles upon which the ideology is based should be a priority.

At the core of the problem, the effects on society that a person’s occupation has should be taken into consideration when determining pay rates. Often times, those who contribute to society most, such as teachers, nurses and farmers, are the people who are greatly underpaid.

“We should be rewarding those who grow our food and make our stuff, or teach the next generation of children, an amount that reflects the work they have put in, and the value we get out of it,” said writer Deborah Doane of The Guardian.

To achieve true inclusive capitalism, the salary gap between the CEOs and the average worker must decrease. The opportunities for both groups must be equivalent, and the current system does not allow for this equality.

“Inclusive capitalism needs to deconstruct and shed its attachment to the old-style competitive labour theory,”  Doane continued, “which suggests that if labour is in abundance, it should be paid cheaply.”

– Hannah Cleveland

Sources: The Guardian, The Vancouver Sun
Photo: Revive a Sunnah

Poverty in Laos
As one of the few countries in the world that remains communist, Laos is ranked as one of the poorest countries in east Asia.

With the collapse of the Soviet Union in 1991, Laos found difficulty in altering their “political and economic landscape.” Despite various attempts at reforms, Laos remained dependent on international donations following the 1990s. Majority of these donations spur from Japan, China, and Vietnam.

In spite of their conditions, the country has been able to make impressive gains within the past 20 years. In the 1990s, the proportion of poor individuals was 39 percent. By 2010, this number decreased to 27.6 percent.

Over the years, Laos has experienced various complications in reforming their economic state. The government has gradually enforced economic and business reforms since 2005. In 2011, a stock market was also opened in the hopes of shifting towards capitalism.

Although these measures have been taken, economic growth in Laos has reduced poverty on a minimal scale. In 1997, the Asian currency crisis struck a deafening blow to the country, causing them to lose more than nine-tenths of their national currency’s value against the US dollar.

The landscape of Laos adds to it’s state of disparity. Being a heavily mountainous area, the country is landlocked and widely blanketed by tropical forests. Less than five percent is suitable for any sort of agricultural subsistence, furthermore contributing to the 80 percent rate of unemployment.

Outside of the country’s capital, individuals lack electricity or any access to general facilities. In the mountainous areas where majority of the population lives, the poverty rate is roughly 43 percent. This is a significant difference compared to individuals in the lowlands, where the poverty rate is 28 percent.

Majority of the disadvantaged households are located in regions that are constantly plagued by the threat of natural disasters, lack livestock of any form, have a great number of dependents, and are led by women.

In Laos, women work more than men, taking an average of 70 percent of farming and household tasks on, while also caring for young children. The literacy rate of women is generally 54 percent, while being 77 percent for men.

One-third of those living in Laos lives below the national poverty line, lacking resources necessary to lead healthy lives. According to Health Poverty Action, less than half of all women who go into labor have a doctor, midwife, or nurse to support them.

Around 40 percent of the children in Laos are chronically malnourished and suffer from severely stunted growth. In various ethnic groups, this number increases to a disturbing 60 percent.

There is good news for the country of Laos, however. In 2010, a Nam Theun 2 dam scheme was inaugurated, projected to provide $1.3bn to the country. This will be used in order to generate electricity to allow exports to Thailand. This step forward will not only boost the economy, but help develop infrastructure as well.

In early 2011 the country was also set to have the construction of their first high-speed rail begin between Laos and China. With all of the anticipated infrastructure and improvements to the overall economy, many hope that Laos will experience relief soon.

– Samaria Garrett

Sources: BBC, Rural Poverty Portal, Health Poverty Action

christmas_spending
Beyond the messages of goodwill and the narratives of birth and rebirth, Christmas inevitably turns into an Olympics of materialism and consumerism. For now, there are only the hard questions on which to ruminate: What are the top ten gadgets we cannot live without this holiday season? What is the Cost of Christmas?

A Gallup Poll released November 14 revealed that the average amount an American plans to spend on Christmas presents this year totals to about $704. In 2012, Americans individually spent about $764 on average. To put it all in perspective, a Think Progress info-graphic revealed in 2012 that the amount Americans spend on Christmas (about $25 billion) is roughly equal to the cost of permanently ending homelessness in the United States ($20 billion).

The amount that Americans spend on Christmas presents and decorations entirely eclipses the $3.2 billion that the World Food Programme calculates is needed per year to feed all 66 million school-age children living in extreme poverty around the world. The American Christmas budget also dwarfs the annual budgets of the UNHCR, the World Food Programme, the UNDP and UNICEF combined.

Only $60 billion is needed to end world poverty.

The message here is that the extraordinarily privileged people of United States are entirely capable of leading the crusade against global poverty. Within the span of only one month of the year dedicated to holiday shopping, Americans spend enough money to permanently abolish global poverty by 50%.

While Christmastime may mean scrambling to the tree to unwrap the new Playstation 4, Xbox One and Apple products, perhaps it is time to additionally consider that that money can buy lasting world peace and equality—that these are gifts that are worth the investment and within our budget.

Malika Gumpangkum
Sources: TIME, Forbes, Business Insider, NY Times, Think Progress, Oxfam
Photo: Telegraph

Russell Brand Poverty Inequality Capitalism
Celebrity iconoclast Russell Brand says humanity must fundamentally change the way it thinks and operates if it is to repair the environment and serve the world’s poor and working class people. Brand weaves his humor and flattery with populist notions of justice, equity and conservation to challenge proponents of the existing socioeconomic system. “The planet is being destroyed,” Brand said in an interview with Jeremy Paxman on BBC. “We are creating an underclass and exploiting poor people all over the world. And the legitimate problems of the people are not being addressed by our political powers.”

Brand enjoys mocking traditional institutions that seem to have drifted into an habitual groove because of collective complicity. Earlier this year, Brand appeared on MSNBC’s Morning Joe. After enduring several minutes of the hosts’ questioning, Brand gracefully hijacked the interview by addressing the superficiality and lack of journalistic integrity that is inherent in so many network news programs. Desirous of more substantive conversation, Brand appeared peeved by the hosts’ talk of kinky boots and chest hair, though he never failed to see the humor in it all. But his point is made (perhaps without the hosts’ knowledge): the stage, the lights, the hosts and the content are all part of a well-crafted illusion.

The public perception of Russell Brand—especially in the United States—seems to be that of a drug-addled goofball who was once married to Katy Perry. But a closer examination of his interviews, writings and award speeches reveal a deep thinking individual who is very serious about changing society, politics, economics and spirituality. It is also clear he intends to bring about this change with grace and civility, two qualities that seem to be lacking among our current batch of  ‘leaders.’

If anything, Brand is publicly discussing the issues that are too threatening for politicians, preachers or pundits: extreme poverty, wealth inequality, environmental destruction and the corporate corruption of politics. He has adopted the voice of a generation that feels unempowered and overwhelmed by a system that keeps them scrambling for a buck while the poor suffer, the rich binge and the earth begs relief. People that are frustrated and disillusioned are going to find comfort in Brand’s message.

In the end, it is a message of love. If it were up to Russell Brand, there would be no profit or poverty and our collaborative energy would be spent serving the underclass and healing our planet. One can imagine the possibilities—and there shouldn’t be anything wrong with that.

– Daniel Bonasso

Sources: New Statesman, The Guardian, The Independent
Photo: The Sun

 

Incarcerated_US_jails
There are roughly 2.3 million people incarcerated in the United States. Though the U.S. accounts for 5 percent of the world’s population, it is home to nearly a quarter of the world’s prisoners. With one out of every 100 American adults behind bars, the prison system is big business for corporations that own prisons or those that provide services to prisons such as telecommunications, provisions and healthcare. With so much profit at stake, there is a financial incentive to promote incarceration and longer prison sentences while also cutting the costs of services. The result is there are more prisoners serving longer sentences that are being deprived basic necessities, including healthcare and communication with their children and family members.

Why does the U.S. incarcerate so many of its citizens? The New York Times, citing the reports of criminologists, point to a number of interwoven factors such as “higher levels of violent crime, harsher sentencing laws, a legacy of racial turmoil, a special fervor in combating illegal drugs, the American temperament and the lack of a social safety net.”

While these factors certainly help explain the prison-industrial complex, there is one glaring omission: profit. Almost $75 billion per year is spent on corrections in the U.S., and the industry employs more than 800,000 people. Though the prison system was originally designed to incarcerate violent offenders as a public service, it has evolved into a highly profitable industry governed by corporations and special interest groups. The logic becomes simple: more prisoners means larger profits.

A new project spearheaded by The Nation and the American Civil Liberties Union is helping shed light on the adverse implications of profiting off prisons. The project is a video series entitled “Prison Profiteers” and profiles many of the larger corporations benefiting from the prison-industrial complex.

One of these corporations—Corizon Prison Health Management—makes $1.4 billion annually for providing health care services to prisoners. The problem is Corizon allegedly fails to provide adequate treatment for prisoners or refuses medicine or medical procedures in many circumstances. Other corporations profiled in “Prison Profiteers” include telecoms, private prisons and bail bond companies. In all cases, the profits are staggering.

Caroline Issacs, Program Director for American Friends Service Committee, explained: “The profit motive is inherently at odds with the mission of a correctional institution.” As long as prisons remain big business, incarceration rates will continue to grow and the quality of services provided to prisoners will continue to deteriorate.

– Daniel Bonasso

Sources: The Nation, New York Times, The Atlantic
Photo: Ugo

Karl Marx Correct Income Inequality Communism Socialism Wealth Redistribution
Was Karl Marx correct? Considered one of the fathers of modern communism, Karl Marx is not exactly a celebrated figure in western culture. Nor is he well understood. It is not possible to provide an adequate summary of his political or economic theories in this space, but a general discussion of some of his ideas may prove beneficial to understanding the current global economic crisis and the growing crisis of income inequality. Whatever our preconceived notions about Marx may be, one cannot deny the thought-provoking nature of his ideas.

Marx envisioned history as a kind of evolution in the modes of production, each mode being defined or characterized by class struggle. Marx theorized that the capitalist mode of production relies on profits that are generated by the exploitation of workers’ time and labor. The desires of the workers–higher wages and better working conditions–will always be pitted against that of the capitalist, who seeks only to maximize profits.

Naturally, this idea is not popular in western societies where “free markets” and “capitalism” are considered canon. But Marx’s theories may need to be revisited. Since 2008, the world’s economies have experienced sluggish growth, stagnant incomes and widening gaps in income inequality. As a result, there is an increasing tension between the rich and working classes as evidenced by movements such as Occupy Wall Street and the fast-food workers’ strike in the United States and the garment workers’ protests in Bangladesh. Though these events garner little mainstream media attention, they are worth exploring and understanding.

If there is one Marxist idea that is particularly relevant today, it is this–capitalism will impoverish the working masses and concentrate wealth in the hands of a very small but very powerful class of über-rich individuals. According to a study by the Economics Policy Institute, between 1983 and 2010, 74 percent of the gains in wealth in the U.S. went to the richest 5 percent while the bottom 60 percent suffered a decline. There are plenty of troubling statistics like these that evidence a crisis of wealth inequality in the United States and across the world.

Marx wrote, “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole.” Any objective view of global economics today can see how this statement makes practical sense.

This is not to say that Marx developed a perfect worldview or flawless economic theory. But perhaps the critical question is not whether Karl Marx was correct, but whether western policymakers are (at best) the victims of dogmatic groupthink or (at worst) well-compensated puppets of the über-rich.

To change current economic trends, people everywhere will need to come together to generate new ideas and begin thinking about alternatives to capitalism. Marx might be a good place to start.

– Daniel Bonasso

Sources: Time, Economic Policy Institute, Stanford Encyclopedia of Philosophy
Photo: Critical Theory

poverty-reduction
The gap between rich and poor is widening. It takes money to make money, and so inequality is becoming exacerbated as the rich get richer.

Rising inequality has impeded efforts to eliminate global poverty. With a greater share of wealth being captured by those in the highest income bracket, the amount reaching the lowest is continually decreasing. Two nations with equivalent GDP growth rates could have drastically different levels of poverty depending on income equality. For example, in India, the net worth of 46 billionaires is $176 billion. This number represents 12% of the GDP of India, as opposed to 1% fifteen years ago. Half of that amount would be enough to eliminate absolute poverty in India.

The irony of this unchecked growth of the upper classes is that eventually it can result in a restriction of growth. Extreme inequality slows the development of markets and limits investment opportunities for the poor. Inequality also diminishes the political power of the poor. This skewing of power can reduce government efficiency and allow for tax evasion by the wealthy, limiting the government’s ability to invest in necessary infrastructure to sustain growth.

If we’re to see success in the fight against global poverty, then rising equality must be allowed to play its part.

– David Wilson

Source: The Guardian
Photo: Global Post

Ending Global Poverty
1.1 billion people in the world still live in extreme poverty, which means surviving on less than $1.25 per day. While that may seem like bad news, the good news is that that number is half of what it was 20 years ago. Between 1990 and 2010, 1 billion people were lifted out of extreme poverty, and now we need to do it again to wipe out extreme poverty by 2030 to reach the goal set by the World Bank.

So, who is to thank for helping curb poverty around the world? Certainly, the leaders who proposed the Millennium Development Goals have contributed by raising awareness about the problem of poverty and encouraging advocacy by creating goals. And without a doubt, the nonprofit organizations that have raised money and volunteered to help raise less than privileged people out of extreme poverty should be applauded. But, the most significant hero in this scenario may be capitalism.

One of the best ways to help people is to teach them how to help themselves. Sending food, medical care, and other supplies to help the poor helps greatly, but not as much as helping a country grow so that they can create their own food, become doctors to care for the sick, and buy or make their own supplies. When a country’s entire economy grows, individuals’ financial outlooks begin to look brighter as well.

China is a prime example of how capitalism is helping end global poverty. The country has one of the most impressive “rags to riches” stories, bringing 680 million people out of extreme poverty from 1981 to 2010. Furthermore, a staggering 84% of China’s massive population used to live in extreme poverty, and that number has now been reduced to 10%. Most of the reasoning behind this incredible transformation lies in the fact that China’s productivity level drastically increased towards the end of the 20th century, supplying people with jobs to bring them out of extreme poverty.

There is much more to global poverty and the methods of ending it than simply providing jobs through capitalism. There are major issues with inequality and government systems, for example, and there’s not always a simple answer. But, growth remains one of the most significant ways to help a nation lift and keep itself out of extreme poverty.

Katie Brockman
Source: The Economist