Do you ever see this chart? People are fond of whipping this out to show how AWESOME capitalism is by totally WRECKING POVERTY. It seems hard to argue with it! A system that could achieve good like this, even if it has problems, would still be pretty good.

So let’s discuss.

This chart comes from Our World in Data, a Gates Foundation-funded nonprofit. It got really popular after Bill Gates tweeted it out to the world last year, but it’s very similar to other charts that make similar pro-capitalism points.

The chart claims that the percentage of the world’s population living in extreme poverty—earning $1.90 or less per day in 2011 dollars—decreased from almost 95% in 1820 to 9.6% in 2015. That sounds good!

But there are some problems. The first and most obvious is that the World Bank didn’t start collecting comprehensive data on global poverty until the 1980s. The chart is complete and total fiction.

Even if it weren’t fiction, there’s the problem that $1.90 per day is so obscenely low that it cannot provide basic nutritional needs. The cut off is arbitrary; even if the chart reflected data, it still wouldn’t be cause for celebration.

Virtually all of the income gain since the early 1980s has come from China. Now, China is a very populous country, so income gains there are nothing to sneeze at. But this does mean that poverty rates everywhere else have remained constant or increased.

Even if the rate of poverty has decreased, the absolute number of people in poverty has increased as global population grows. This chart obfuscates an enormous amount of human misery in a neat, feel good package.

The biggest problem with this chart is probably the hardest to grasp, because we’re so used to “income” being the primary way we access resources. We work a job, we get paid money, we use that money to buy food and housing. More income is automatically good, right?

Except that most people, for most of history, did not rely on money and markets to access resources. Most people lived in subsistence economies, with abundant resources accessible through personal labor.

Other resources might be accessible through redistribution—as when villages stockpiled grain to hedge against famine—or reciprocity—as when neighbors took care of neighbors.

Cash income represented a nice-to-have, primarily to access luxuries. Lacking money wouldn’t have meant starvation. Ever read Ox Cart Man? The family produces virtually everything it uses, but does sell a small surplus for cash it uses to buy luxuries like an imported needle.

Unlike today, people could pick or choose whatever odd job they wanted on their own terms, because turning down income meant lower access to luxuries, not starvation and homelessness. People generally have to be forced into wage labor. https://www.smithsonianmag.com/innovation/when-robots-take-jobs-remember-luddites-180961423/

So higher wages don’t necessarily translate into a higher quality of life. If wage labor is displacing non-income economies, higher wages can indicate *greater* poverty and lower standards of living.

Consider that the introduction of wage labor and the free market in England led to malnutrition, more brutal working conditions, longer hours—but also higher wages. Those wages did not compensate the workers for their losses. Wages were a step backwards.

https://tinyurl.com/y3x8yu8m 

So the next time someone comes at you with this chart, understand that it is propaganda produced on behalf of a billionaire monopolist who desperately wants to convince you that the system that enriched him is really, really great and no one should consider raising his taxes.