Eliminating poverty is the dream of the world. Feeding, clothing, and sheltering every human
being on the planet, creating equitable communities and an equitable international community. Poverty and hunger are both part of everyday
life in regions of the world often called “developing” nations, previously the “third
world” and now most commonly the global south – not the geographic south but instead
the continents of Africa and South America, as well regions like central America and parts
of the Asia. In the global north, we are fed a narrative
that we, the rich nations, are developing the poor nations, and that it is through our
aid and our guidance that the global south can reach that dream of eliminating much of
their poverty. Unfortunately for all of us, this is a fiction. Today, approximately 4.3 billion people – which
is more than 60% of the world’s population – live in crippling poverty, struggling
to survive on less than the equivalent of $5 per day. Poverty is not decreasing worldwide at the
rate that institutions like The World Bank and The United Nations claim, and researchers
and economists have begun to expose this narrative. The global north is not developing the global
south – it is under-developing the global south. Through manipulation of data, crushing debt
traps, covert intelligence operations, military interventions, and a modification of age-old
colonialism tactics, rich nations are keeping poor nations in their current state, and unless
the entire economic system that maintains this inequality is replaced, this relationship,
this exploitation will always continue. Why are some nations rich and some nations
poor? In the global north, those of us living a
relatively comfortable life frequently offer simplistic and uninformed opinions. Maybe they don't work hard enough, some might
offer, but the working poor in impoverished nations generally work long hours with few
of the benefits received in richer nations. Even in the global north, those struggling
to make ends meet will tell you that it is not for lack of trying and that they will
often have to work multiple jobs with little time for rest. Maybe, others might suggest, their values
are backwards and institutions too corrupt, placing the blame on internal culture and
internal matters only, but this ignores globalization, international trade, and other ways in which
nations interact that make internal matters only a piece of the puzzle. Such an argument also betrays an arrogance
about our culture, values and religions being right, and an ignorance about the corruption
that also exists in rich nations. Maybe, some might even suggest, poor nations
simply have always been poor and always will be poor, offering a kind of fatalism in lieu
of evidence and research. Simplistic answers to extremely complex questions
can be comforting, but in order to grapple with why the world is the way it is, both
a longer view of history and the consequences of modern day global capitalism must be understood. The history of the global south is a history
of under-development by the global north. According to The Divide by Jason Hickle, “...if
we rewind to about 1500, a very different story emerges. At that time, there was little difference
between Europe and the rest of the world when it came to the living standards of ordinary
people. In fact, people living in South America, India
and Asia were in many ways better off than Europeans. Even as late as 1800, life expectancy in England
was between thirty-two and thirty-four years – and a dismal fifteen for children born
into working-class families. … Evidence from China, Japan and other parts
of Asia suggests that people in these regions also lived longer, healthier lives than Europeans
did. Japan enjoyed a life expectancy of forty-one
to fifty-five, China between thirty-five and forty, and parts of South-East Asia around
forty-two.” Asia exceeded Europe in transport technology,
better sanitation, public health systems, and nutritional standards. Europe in the year 1500 was emerging from
the Dark Ages and de-population due to the black plague. Massive population loss stunted development
of the continent by annihilating their labor force and weakening their institutions. Partly because of this, Europe in 1500 only
accounted for approximately 15% of the global gross domestic product. China and India together controlled 65%. What happened in the following centuries to
completely rearrange the global economy? Much in the way that Europe suffered from
de-population in the 14th and 15th centuries, Africa, North America and South America were
de-populated by European conquerors in the 16thth century through the 19th century – through
slavery, executions, warfare, and control – all in the service of stripping resources
from other nations, many of which prior to that time were not suffering from poverty. This was the world system of colonialism. Colonialism is a policy of conquering, stealing
and controlling a new territory, often from afar, and snatching power from the indigenous
people, making them either second class citizens or removing citizenry outright in favor of
enslavement. Regions that were colonized suffered centuries
of de-population and dispossession of their resources. For example, between Christopher Columbus'
arrival in 1492 and the early 1600's, Latin America's indigenous population shrunk by
as much as 95%. If Europe's economy could be slowed for centuries
from poor health standards and a loss of 30% of its population, imagine what losing nearly
everyone could do to a region. By the early 1800's, a total of 100 million
kilograms of silver had been stolen from Latin America and inserted into the European economy
– first into Spain, and then out to the rest of Europe as payment on Spain’s debts. Because Spain was indebted to other nations
due to its expensive involvement in the crusades, the riches of the “new world” flooded
to Spain's creditors, eventually enriching much of Europe. In Africa, the continent was de-populated
partly through warfare but also through the rampant slave trade. European historians claim that at least ten
million African slaves landed alive in the Americas, Atlantic islands and Europe, but
this is considered a low estimate and does not take into consideration the full impact
of the slave trade. For example, the figure does not account for
those who died in transit or smuggled slaves or those killed during the banditry of capturing
slaves. Furthermore, this figure does not count the
east African slave trade or the Arab slave trade. Colonization in Africa lasted longer than
in many other regions, as approximately 90% of the continent was under European control
even in the early 20th century. Prior to colonialism, Africa was advancing
and progressing economically and politically. Had the Atlantic slave trade and colonialism
never been imposed on Africa, its development almost certainly would not have stagnated. The global economy post-colonialism is still
affected by colonialism. For example, the terms of trade were ruined
– perhaps forever – for Africa, South America and other regions. Their exports decreased relative to the prices
of goods they imported, spending more to receive less. For another, worker wages remained low. Post-colonialism, the global north could still
impose an unequal exchange on regions that they had only recently colonized and enslaved. Again, from Jason Hickle. “The fact that slavery was used up through
the 19th century further contributed to downward pressure on wages, as workers had to compete
with free labor. And why do poor countries have a comparative
deficit of capital in the first place? Partly because they were plundered of precious
metals, and partly because their colonizers forcibly destroyed local industries so that
they would have no choice but to consume Western exports. Orthodox economic theory presupposes international
inequalities as if they have always existed, but the historical record is clear that they
were purposefully created.” Inexpensive or free labor throughout the history
of colonialism provided the capital for the industrial revolution in Europe and the United
States. This allowed richer nations to develop and
modernize in the 19th century and prevented poor nations from doing the same for a long
time. Defenders of the economic inequality that
greatly favors the global north use “that was then, this is now” rhetoric, ignoring
the long-lasting consequences of colonialism as well as how colonialism set up the current
terms of unequal trade. And once again, these factors are introduced
from external forces, not internal policy. [II. Debt, Privatization, and Economic Control]
Unequal trade deals that poor nations have no choice but to accept create an economic
system that has poor nations produce raw materials, which are then exported to rich nations, which
are then sold back to the poor nations. Historian Clifford Cobb explained it like
this: “One of the legacies of colonialism is that
the poor countries of the third world are continuing to export raw materials, and the
countries of Europe and North America produce and export finished products. This stems from a process that was developed
long ago, and the intention was to make sure that the countries of the third world remained
backward and remained dependent and are never able to develop. So, to this day, they are continuing to survive
on the export of raw materials. That has always been to the disadvantage of
the countries exporting the raw materials, and it gets worse each year.” In other words, independence did not produce
complete liberation. Poor nations have their own political structures
and laws, but they operate under an economic system that continues to make them dependent
on rich nations. The goal of rich nations is to ensure that
poor nations can never become rich enough to be competitors, must be stable enough to
produce raw materials but and poor enough to keep those materials inexpensive. Much of this unequal relationship between
the global north and global south is maintained through debt. Following the end of colonialism, the massive
debts of the rich colonial powers were transferred to the newly-formed, independent nations. This was in violation of international law,
but the new nations did not have the resources to contest this. The global north's solution was to make the
global south even more subservient through new debts with high interest payments. With no other options, poor nations took out
these loans and accrued further debt. In general, it works like this: a rich nation
sees a resource in a poor nation that it requires, such as oil or raw materials for commodities. The rich nation that arranges a loan to that
poor nation with the World Bank. The World Bank provides these loans under
conditions such as forced privatization and agreements that benefit the global north. Then, in order to pay off this enormous debt,
the poor nation makes an agreement with the rich nation to sell that resource for very
little. It's a kind of debt trap that always keeps
the global south subservient to the global north. These debts give rich nations the power to
impose policy on poor nations, such as monopolies by foreign corporations. A layman observer might also object to this,
claiming that rich nations provide foreign aid to poor nations, but the devil is truly
in the details. Aid to poor nations is vastly out-numbered
by what is taken from poor nations. According to Global Financial Integrity and
the Centre for Applied Research at the Norwegian School of Economics, the global south receives
approximately $2 trillion in all aid, investment and income from abroad, but it loses approximately
$5 trillion, taken predominantly from the global north. Foreign aid is also conditional, not a gift,
and the conditions are the continued unequal relationship with rich nations. David Sogge, author of Give and Take: What's
the Matter with Foreign Aid?, explained in like this: “...the usual insinuation is of unproductive
and ungrateful welfare queens living high on Northern generosity. That is an illusion. Foreign aid is a sideshow. … Northern financial circuits gain from
Southern capital, whether looted or legitimately saved.” So, what happens when a poor nation is fed
up, tries to help its own people, or the people revolt against the current order? Rich nations step in and put a stop to it. [III: Interventionism and Regime Change] The
system of global capitalism is not simply the natural outcome of markets. It is the maintenance of the unequal relationship
between the global north and the global south – often by force. When a head of state or head of government
is elected or assumes power in the global south, that ruler faces a secondary challenge
outside of the governance of the people. They must also capitulate to the global north,
endorse capitalism, and maintain the current unequal economic relationship and trade deals. If they do not, there is a good chance that
this ruler or regime will be overthrown either directly by or with some assistance from rich
nations – most prominently The United States. There is a long history of this. Following the completion of westward expansion
in the 19th century, the US faced a turning point and a new question: Should they be satisfied with its current
level of wealth and territory, or expand its influence across the world? The United States' desire for expansion, influence,
and control of other nations is an economic concern – not a desire to spread democracy. It almost always came down to money. Stephen Kinzer, author of Overthrow, explained
it like this: “By the end of the nineteenth century, farms and factories in the United
States were producing considerably more goods than Americans could consume. For the nation to continue its rise to wealth,
it needed foreign markets. They could not be found in Europe, where governments...
protected domestic industries behind high tariff walls. Americans had to look to faraway countries,
weak countries, countries that had large markets and rich resources but had not yet fallen
under the sway of any great power.” Here are only a few examples of US-backed
coups and interventions as well as the economic concerns surrounding them. In 1949, the United States assisted in regime
change in Syria. President Shukri al-Quwatli refused to allow
the US-sponsored oil pipeline from Saudi Arabia through Syria and into Lebanon. He also tolerated an anti-capitalist political
party in his nation. The CIA had an asset on the inside, and with
their help, Syria installed Husni al-Zaim, who approved the oil pipeline and began rounding
up left-wing opposition. In 1953, the United States assisted in regime
change in Iran. Prime Minister Mohammed Mossadegh nationalized
the oil industry, stripping away operations from British oil corporations. Declassified CIA documents prove that the
United States had a hand in Mossadegh's removal. Mossadegh spent the rest of his life under
house arrest. In 1954, the United States assisted in regime
change in Guatemala. President Jacobo Árbenz threatened holdings
of US-owned United Fruit Company. The CIA equipped paramilitary troops, and
the US Navy blockaded the coast. Árbenz was removed from power, leaving the
nation run by a succession of military juntas. In 1960, the United States and Belgium ousted
Congo's Prime Minister Patrice Lumumba. Belgium wanted to maintain its business interests
in the region after de-colonization. Lumumba was killed in 1961. In 1964, the United States helped oust Brazilian
President Joao Goulart, whose left-wing politics threatened capitalism. 1973, the United States backed a military
coup against democratically elected president Salvador Allende, who was a socialist, in
favor of the dictatorship of Augusto Pinochet, a fascist capitalist who was responsible for
countless atrocities. There are a great many more, including Vietnam,
Indonesia, Ecuador, Laos, Iraq – all of which were carried out for the same reason
as the debt traps and exploitation of raw materials: to maintain the relationship between
rich nations and poor nations. If a poor nation wants to abandon capitalism,
or if a poor nation threatens rich nations with competition, that is when the CIA resorts
to covert regime change. If poor nations want to exist, they are forced
to accept the terms of rich nations. If poor nations want to do more than simply
exist but actually flourish, they are violently crushed, and a more compliant head of state
is installed by rich nations. In other words, there is no way out of poverty
for poor nations so long as rich nations purposefully keep them indebted and subservient. To propagate the myth that wealthy, capitalist
nations are greatly reducing poverty and that we should allow them to continue doing whatever
they want, The World Bank occasionally releases data that shows global poverty gradually decreasing. It is the lie that we have been told for years,
but recently, independent economists and researchers have begun to publicize critiques of this
data and have largely proven that global poverty is either stagnant or increasing, depending
on whether one is calculating using percentages or total numbers. The most well-read critique is Jason Hickle's
calculation in The Divide. Here is the more accurate data from this book. In terms of absolute numbers – the original
metric by which the world’s governments agreed to measure progress – the numbers
show that the poverty headcount is exactly the same now as it was when measurements began
back in 1981, at approximately 1 billion people. Of course, this is only according to the lowest
possible poverty lines established by organizations like The World Bank and The United Nations. The International Poverty Line, instituted
by The World Bank, is a measurement of $1.90 per day. $1.90 is the international equivalent of what
that amount can buy in the United States. Researchers are now saying that people need
at least $5 per day just in order to have a good chance of surviving until their fifth
birthday, having enough food to eat and reaching normal life expectancy. If we moved to poverty line to this more accurate
level, we would see a total poverty headcount of over 4 billion people. That is most of humanity. Poverty has become worse over time, with more
than 1 billion people added to the ranks of the poor since 1981. So, how do The World Bank and The United Nations
get away with misleading figures that show the opposite? The World Bank wants to present the case that
privatization and capitalism in general are making the world better, and that their efforts
specifically are causing a net positive for the world, particularly the global south. Their institutional power and authority afford
them a lot of leeway among the press and among the people. So much, in fact, that they can perform statistical
manipulation that is uncritically swallowed. Why is the IPL so low despite reams of evidence
and a call to adjust it to much higher? Because if The World Bank made the IPL accurate,
it would reveal that their debts, conditions of privatization, and such were unhelpful. Their calculations are not in error. They are just using the wrong numbers to begin
with. Over the past couple decades, every time bad
news about poverty would come out of statistics from The World Bank, they would change the
IPL or other measurements shortly thereafter and claim that the bad news from a few days
ago is now retroactively false based on their new numbers. It's the global equivalent of putting a thumb
on the scales. But that's not all. The United Nations also presents this rosy
narrative to give the impression that the global economy is on the right track. It may be, for the global north, but not for
the global south. They began this data analysis in 2000 with
their Millennium Development Goals. They do this manipulation in several ways. First, they changed the measurement of poverty
from absolute numbers to proportional numbers, allowing for the appearance of less suffering
over time due to population growth. The moral calculus of this is appalling because
it implies that even if there is more and more suffering throughout the world, so long
as the population of less impoverished people keeps growing, the increasing number of poor
people can be seen as decreasing. Second, to manipulate the data further, the
UN moved the starting point from 2000 to 1990 to take advantage of gains made prior to when
they even started their program. They did this to take credit for massive improvement
on poverty in China during the 90's and to add those figures to their data. The reason this is so disingenuous is that
The United Nations, The World Bank and the International Monetary Fund cannot claim to
be responsible for improvement in poverty in China and a few other Asian nations. China and a few other nations in that region
are some of the only places in the world where free-market capitalism was not forcibly imposed
by the World Bank and the IMF. China was not subject to the structural adjustment
imposed on the global south. If we take China out of the equation, global
poverty headcount increased during the 1980s and 1990s, while the World Bank was throwing
its weight around in the global south. In other words, our current economic system
has not made the global south better. It has made it worse. And the only nations mostly immune to the
machinations of the World Bank and IMF are communist nations in Asia. The data presented by The World Bank and The
United Nations has consistently been proven false in recent years, but an uncritical media
that loves the rosy narrative will still sometimes reprint this misleading data without calling
it into question. This might seem obvious, but it apparently
needs to be said. The watchdog for The World Bank cannot be
The World Bank. Global capitalism is a complex system, and
we are not all economists. Perhaps this can all be better understood
if the machinations of global capitalism can be compared to the more accessible daily life
of an individual. A layman observer might wonder why the global
south participates in this obvious debt trap, but the answer is the same for why an individual
labors under the thumb of a corporation: because that individual has no choice. The relationship between rich nations and
poor nations is not dissimilar from the relationship between a rich individual and a poor individual
within a nation. That individual, like everyone under capitalism,
is being exploited for their labor. That individual will always produce far more
for the corporation than they will ever receive from the corporation – but there are bills
to pay, a family to feed, and that individual is forced to participate in their own exploitation
until the system is abolished and replaced completely. A layman observer might also wonder how rich
nations that fund rebellions and stage coups in poor nations could get away with this violation
of international law so consistently if it is so terrible. The answer is the same for why an individual
can be subjected to state violence within their own nation, even when it is blatantly
illegal and immoral. Because this violence is protected and enshrined
in a culture as being for some greater good. It is not exactly one to one, but hopefully
that will make things clearer. What is happening internally within a nation
is also happening in a grander scale externally, and it has been happening for a very long
time. Hi, everyone. If you want to learn more, the sources are
in the description, most of which were cited in the video. The Divide by Jason Hickel, Give and Take
by David Sogge, Overthrow by Stephen Kinzer, How Europe Underdeveloped Africa by Walter
Rodney, as well as documentaries like The End of Poverty and Poverty, Inc.
Great video! I think the lack of discussion about global effects of capitalism is my biggest gripe with the leftist circles, but hopefully with videos like this that will change.
Love the topic, let me get some snacks!
I don't disagree that rich nations exploit poor nations for resources and we need to do much more for the global poor, but I its incorrect to say global poverty hasn't improved at all in the last ~50 years. And even Hickel mostly agrees (Not that is justifies the current global economic system): https://www.vox.com/future-perfect/2019/2/12/18215534/bill-gates-global-poverty-chart