It's entirely possible to have valid questions, complaints even, about inequality.
I might not worry about it much, you might worry more or less than I do, but it's a perfectly reasonable thing to think about. But it's equally possible to have invalid complaints about that very thing, inequality, even if the subject can be a reasonable cause for concern.
Such as the complaint from the Citizens Platforms for the SDGs -- one of these groupings that no one elected or appointed but just spring up like mushrooms after the rain.We might even suspect that one of their demands -- that citizens’ groups for the SDG process gain more government money -- might be the major demand at the heart of their concerns.
But, to the specifics.
Their complaint is that the poorer part of the Bangladeshi population now gain a smaller part of the national income than they used to. This is an increase in poverty, it makes poverty demolition more difficult perhaps. This is, of course, total nonsense.
In more detail, in 1991, the bottom 40% of Bangladesh enjoyed 17.4% of total income to share among them. In 2016 this was on 13.1% of the national income. I've no reason to doubt those figures, it's just that they're an irrelevance. Because that national income has risen, per capita, from $403 to $1,029, over the same period.
Or, in gross terms, that national income has risen from $31billion to $221bn.
Clearly, the Bangladeshi poor are vastly better off today than they were. They are sharing a larger amount of money; they are gaining more each. This is not an increase in poverty nor is it a barrier to dealing with poverty. It's actually the solution to it -- people are getting richer, they are less poor.
We’re here back with an old point. There was a time when there were great plans to solve those problems of poverty. The rich should give up more of what they had for redistribution to the poor. This was said internally to a country. It was also an insistence about global development. That the rich countries should be shuffling resources to the poorer.
This was all allied with varied left wing and socialist plans for planning how the economy should work. Only when the government detailed how all should be done could poverty be abolished.
Then something a little odd happened.
Within the rich countries, it's that economic growth which made them rich,alongside the poor as well. And then the same happened internationally. These past few decades have been called the age of neoliberalism -- that globalized free market capitalism. And it is these past few decades which has seen the largest fall in absolute poverty in the history of our entire species.
In the 1970s some 40% of all humans were in what we call absolute poverty -- living on less than $1.90 a day in today's money. Today, it's under 10% and still falling fast. We do actually think that we will, for the first time in all of history, be able to abolish entirely this level of poverty by 2030 or so.
Actually, we had a plan to halve it by 2015 as part of the Millennium Development Goals. This was going to involve lots of plans and bureaucrats and official foreign aid. And that global free market capitalism just went and did it without permission -- it's the one of the MDGs that was overachieved and before time.
You know, exactly what has been happening in the RMG sector -- people in rich countries buying things made by poor people in poor countries. Everyone gets richer, the poor faster than the rich. Yes, we've even been having falling global inequality over this period.
So, what’s a good leftist, a good socialist, to do? Some other justification for a planned economy, for bureaucrats deciding everything, must be found. Hence, this concentration upon inequality.
For, as Planning Minister MA Mannan pointed out, increased inequality is a side effect of economic growth. That is, if free market capitalism solves the original problem being complained about, we’ve found this other argument against free market capitalism -- inequality.
For, as is obvious to every socialist and bureaucrat, capitalism and markets cannot be the answer. It's just the reason they cannot be the answer which changes.Just to emphasize this. The bottom 50% of America gets some 13% of the national income of the US.
That’s a larger portion of the population getting a smaller portion of everything. And yet, who is better off, a poor person in the US or a poor person in Bangladesh? So, inequality is a problem in dealing with poverty or not?
Well, let's put it this way: We have absolutely no evidence at all that the contention is true, do we?
Tim Worstall is a Senior Fellow at the Adam Smith Institute in London.