People in the developing world are lifting themselves out of poverty wherever they have the economic freedom to do so.
No Discernible Rise in Well-Being? Look at the Data…
Economist Jeffrey Sachs of Columbia University recently made this claim:
“We’re so rich in our total production and in our capacities to do things that we could solve absolutely fundamental challenges, such as ending extreme poverty or addressing climate change or preserving biodiversity without much effort … it cannot be the most important issue in the world whether the U.S. grows at another 3% or 3.5% or 2.9% a year, when over the last 65 years there’s been no discernible rise in wellbeing.”
That is the theme of his new book, The Origins of Happiness.
By “we” Sachs appears to mean the U.S. and other rich countries and calls for their governments to engage in wealth transfers to poor countries and a plethora of environmental projects. What he does not seem to realize is that humanity is already making swift progress—through the free actions of billions of individuals—toward ending poverty and better preserving the environment.
As global GDP per person has skyrocketed, global poverty has plummeted. Fewer people live in extreme poverty than ever before, both as a share of the population and in absolute terms. In other words, although there are more people alive, the number of people living in extreme poverty is lower than it has even been. If current trends continue, extreme poverty will be practically eliminated by 2030.
After China liberalized its economy, hundreds of millions of its people escaped extreme poverty. Once India moved towards economic freedom in the early 1990s, its population saw a remarkable decline in poverty as well. It’s tempting to want to make this story about “us” in the U.S. and other rich countries acting as saviors for the global poor, but the reality is that people in the developing world are lifting themselves out of poverty wherever they have the economic freedom to do so. In contrast, no country has ever become rich through foreign aid, which is plagued by many problems.
As incomes rise and people move past worries of basic survival, more of them come to care about the environment. Technological progress is also helping to improve environmental stewardship, by boosting agricultural yields per hectare of land and increasing water productivity, among other things. We are now witnessing numerous trends that give cause for environmental optimism, from expanding forest area in China to falling emissions in the United States.
Once again, Sachs’ well-meaning call for state intervention seems misguided. The U.S. emits less CO2 today not because of EPA regulations or costly subsidies for unreliable wind and solar energy, but because the market delivered a technological breakthrough (hydraulic fracturing) that reduced reliance on more polluting energy sources.
Despite Sachs’ protests, there has been a discernible rise in wellbeing over the last 65 years. Even the amount of progress achieved just in my own lifetime is astounding. Sachs’ book presents data suggesting that higher incomes and better education do not heighten people’s happiness as much as sound health and strong interpersonal relationships do. From this he concludes that despite being richer and better educated, people today are not any better off than their fore-bearers.
Actually, even in terms of health and interconnectedness, we are still better off today. Consider health. Life expectancy is at an all-time high. More infants survive to see their first birthday and more mothers survive childbirth. Cancer takes the lives of fewer men and women. We lose fewer lives to droughts, hurricanes, lightning, tornadoes and extreme temperatures. Safety advances also mean fewer traffic fatalities and fewer fatal plane crashes. Infectious diseases that were once common causes of death have been defeated by better treatment and prevention methods.
As for relationships, despite having more disposable income, today people work less and enjoy more leisure time to spend with loved ones. In 1950, an average American worker worked 1,983 hours in a year. In 2016, that had fallen to 1,774. That’s 209 fewer hours of labor—and 209 more hours to spend with family and friends.
Technology, although much maligned for providing distracting alternatives to social interaction, also makes it possible to remain in contact with others even across vast distances. Access to electricity, mobile phones and the Internet has never been more widespread, connecting more lives across the planet.
Technology not only makes it easier to maintain relationships, but to form them. Just last month I attended a wedding where the bride and groom had first met through a dating app on their smart phones. They were not unusual—online dating now brings about more than a third of U.S. marriages, and the rapid spread of communications technology has also facilitated the formation of many friendships.
To make his case Sachs also cites data showing that people don’t identify as happier today than a half-century ago. If true, that is perhaps evidence in favor of the “hedonic treadmill” theory of psychology, which claims that people quickly get used to improvements in their lives and take them for granted. A year after winning the lottery, for example, many people are no happier than they were previously. In a sense, just being alive right now means you’ve won the lottery—the average American today is richer in many ways than John D. Rockefeller a century ago.
Sachs is too quick to dismiss the incredible progress that humanity has made by practically every measure, and also too quick to assume that government intervention is the best way to bring about progress. You can find even more data showing how far humanity has come at HumanProgress.org.