If you follow international news you will be accustomed to headlines announcing that world leaders have succeeded in cutting global poverty in half over the past couple of decades. Its sounds like brilliant news, but it’s just not true. The numbers have been furtively manipulated to make it seem as though our economic system is working for the majority of humanity when in fact it is not.
The sustainable development goals, to be decided in September, will take this dubious good-news story a step further. This time, the main goal is not just to further reduce extreme poverty, but to eradicate it entirely — and to do so by no later than 2030. This is a welcome move: it’s about time we finally got around to putting poverty eradication firmly on the agenda. But it also raises some tough questions. Is it possible to end poverty under our current economic system?
A few weeks ago economist David Woodward tackled this question in an articlepublished in the World Economic Review. His findings are shocking. He shows that, given our existing economic model, poverty eradication can’t happen. Not that it probably won’t happen, but that it physically can’t. It’s a structural impossibility.
Let’s assume that we can maintain the fastest rate of income growth that the poorest 10% of the world’s population have ever enjoyed over the past few decades. That was between 1993 and 2008 — after the debt crisis of the 1980s that crippled much of the developing world and before the banking collapse of 2008. During that period, their incomes increased at a rate of 1.29% each year.
So how long will it take to eradicate poverty if we extrapolate this trend? 100 years.