Archive for January, 2011

Washington Post Op-Ed: The Secret Success of Falling Poverty

My colleague Laurence Chandy and I have an op-ed in today’s Washington Post, which is based on some ongoing research we’ve been doing on updating global poverty data. (Our main findings are here.)

The central point we’re making is that our sense of current global poverty is dramatically out of date, since the World Bank hasn’t updates its global poverty figures since 2005.  In the past six years developing countries have enjoyed remarkable growth, especially those countries home to the highest number of poor people, such as India, China, and Ethiopia.

On our estimates close to 500 million people have escaped poverty since 2005, and the Millennium Development Goal of halving global poverty has already been achieved.

Go read the whole thing.

“Pro-business” and “pro-market” are not the same thing!

Earlier this week, the White House and Cass Sunstein launched a new initiative to streamline regulations.  For many on the  left, this was viewed as Obama pandering to / wooing the business community. But I think this is another case of failing to distinguish between “pro-business” and “pro-market”.

A priori, there’s no particular reason to believe removing regulations is any more “pro-business” than it is “pro-consumer”.  In fact, a dirty little secret of the business community – meaning those people who currently own/run businesses – is that there are lots of regulations they actually really like, because they make it more difficult for potential competition to enter the market, which would drive down their profits (to the benefit of consumers).  Sure, businesses chafe at the idea of the government telling them what they can and can’t do, but the reality is today’s business owners benefit greatly from countless rules that keep would-be competing owners from opening up their own businesses.  Indeed, in some senses “pro-business” and “pro-market” policies could be considered opposites: remember that one of the key features of a truly free market in the ECON 101 definition of perfect competition is that profits equal zero.  Obviously businesses wouldn’t be too happy about that.

(As a side note, it’s important to remember that “the business community” doesn’t represent the interests of the abstract/theoretical/potential business owner, but rather the entrenched interests of actual business owners.  Likewise labor unions don’t represent the abstract worker but rather a specific group of current workers, which is why many of their policies – such as efforts to set pay based on seniority rather than performance – aren’t focused on transferring rents from owners/consumers/etc to workers, but rather about transferring rents from one group of workers to another.)

But while the left’s tendency to dismiss market-friendly reforms as pandering to the business community is a problem, the opposite tendency – the right’s attempts to mask pro-business policies as being blessed by Adam Smith – is even more pernicious.  Far too often you hear Republican politicians try to sell policies that will benefit specific business owners by talking about the virtues of the free market and capitalism.  The fact is, most truly market-friendly reforms aren’t going to be backed by the Chamber of Commerce, because those reforms would take away its members’ profits.

(FYI, Matt Yglesias is at his best in explaining the progressive case for eliminating bad regulations, especially on the stupidity of barber and dental hygienist licensing.)

 

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J’accuse! (though mostly jokingly)

So I was looking through the current issue of Foreign Policy, and came across some words that sounded surprisingly familiar.

Here’s Gideon Rachman, chief foreign affairs columnist for the Financial Times, in the cover story of FP, on America’s decline:

The Japanese population is less than half that of the United States, which means that the average Japanese person would have to be more than twice as rich as the average American before Japan’s economy surpassed America’s. That was never going to happen.

And now here’s me, on this blog, some seven months earlier:

Japan’s population is less than half of that of the US; in order for Japan’s economy to overtake that of the US, it would therefore need to be twice as rich on a per capita basis.  This was never going to happen.

Hmmm…  I’m guessing it’s probably just a coincidence, but still, I’ve heard of plagiarism accusations that are a lot flimsier.  Moreover, not only are the words almost identical, but they’re being used in the same context: we’re both making the point that comparing China’s challenge to the US with that of Japan a few decades ago isn’t particularly useful, given the demographic differences between the two countries.

And how cool would it be if a) of the three readers of this blog, one of them was Gideon Rachman, and b) he found it so insightful/well-written that he felt the need to copy it nearly word-for-word…

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Resurrected!

New year, new me, new blog.  Or, more precisely, new interest in bringing the old blog back to life.  I know I went silent for a while, but with grad school applications now (mostly) out of the way, I’m hoping I’ll have some more time to devote to this.  So look out for more postings in 2011!

 



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