If you follow US politics, you might have heard a lot about income inequality recently. The dreaded 1% possess 40% of the country's wealth. Barack Obama has called it "the defining challenge of our time," and Bernie Sanders has essentially built his entire campaign on this issue. I've heard the talking points many times: wages are stagnant, student loans are oppressive, jobs are moving overseas, the wealthiest individuals and corporations are buying politicians and rigging the rules to the profit of their upper management.
I've found this even more difficult to implement when traveling. The people off the ladder are mostly offering me things I don't want. There are lots of useless souvenir trinkets, and there are the groceries and then there are the items catering to locals that I don't even understand. The language barrier hurts. Old women in Vietnam were often selling bottles of some yellow tonic. I never figured out what it was, and never shelled out $2 for it. I do eat my fair share of local meals, but it starts to feel like a burden, trying to constantly pick out which restaurant looks the shabbiest. And I can't ensure that the guesthouse I stay in is Mom and Pop run - in fact most of these aren't on booking.com or hostelworld. Lastly, I just don't have that much money. I double my pay as a tip to people I think need it, but this usually amounts to an extra $2.50. Certainly not a life changing amount. I can't even afford to give $10 to every person who needs it much less $100. Maybe the effort is there but the effect isn't.
As we approach Siem Reap, I realize that a lot of the people on this bus aren't really going to Siem Reap. I'm the only foreigner here and while we are still about 50km away, the bus has already made two stops. It's dark but it appears the homes on the side of the road here are of better quality than before, some made of plaster with glass windows. How well educated are the people sitting next to me? Are they middle class? There are smart phones and casual brand clothing. But they didn't have their own cars to make this 6 hour trip, and it's quite possible they will never leave the country. And what sort of industry is out here? It's too far from the temples to get any tourism revenue. Even when it's right in front of you, there are a lot of pieces to an economy hidden to you.
And even when poverty is right in front of you, it's not simple to contextualize it. Are these "poor" people happy? Are they more satisfied with what they have than I am? Is it better to make $2/day in a village where that's average, or $100/day in a city where everyone else has so much more? In these philosophical debates where it becomes clear that there's no equation for happiness and so much is relative, a lot of people shy away and instead focus on poverty-related issues like health and education. We can't tell if people are sadder, but they're definitely dying earlier. I won't discount these measurable metrics, but I find plenty of other issues that poverty breeds. Poverty breeds hopelessness - when you don't see any way out of poverty because no one around you has ever created a blueprint for escaping poverty, it's easy to give up. Poverty breeds boredom - many jobs I see are monotonous and involve waiting on events outside your control. Poverty leads to distorted decision making - when you can't find a way out of your boring job in your tiny village that produces nothing and someone comes along with a promised escape, you might give up your better instincts and take this risk. It's how you have thousands of laborers signing 5 year contracts to work in deathly construction sites in the Middle East. It's how people get lured into sex trafficking, or recruited into drug gangs. Distortions like these are sprawling problems with many branches but poverty right at their root.
I write this paragraph from a minibus, rolling through rural Cambodia, and I agree that those are all problems. But outside my window are symptoms of other problems. I've long suspected that in a world where I'm typing on my iPhone 6s driving past wooden bungalows with thatched or corrugated metal roofs that fat cat CEOs can't be the source of all these problems. Regrettably I didn't study a ton of economics and the mysteries of poverty escaped me. So I printed out some research papers before I left work and brought them along on this trip. I've read a bunch of Branko Milanovic, including his paper on the history of wealth inequality, Peter's paper on the winners and losers of globalization, and Gini's inaugural paper introducing his coefficient in the original Italian. I've also been influenced by Klein's "This Changes Everything" book on climate change that is extremely critical of globalization. And I think I have a few more answers now. (All are recommended reading except Gini, that was just for fun)
Inequality has gotten far worse in the age of globalization. Milanovic estimates that the Global Gini was 0.55 in the 1820's and 0.65 in 2002. Inequality overall fell somewhat since 1980, but almost entirely because China emerged from stifling communist economic policies into a world power, with hundreds of millions lifted, or perhaps dragged, out from extreme poverty, many into a legitimate middle class. Additionally, income inequality between countries is greater, far greater, than inequality within countries. In many ways, this latter fact is obvious, if so rarely addressed. Furthermore, while globalization has created some jobs in developing nations, it mostly has increased global consumption. Corporations keep retreating to areas where labor and environmental standards are more and more reduced, saving costs and keeping the savings largely to their own upper management (and shareholders). The rich get to buy more things and the majority of that money goes to the even richer. As nearly all the richest multinational corporations and their boards are from the richest countries, this has aggravated global inequality.
The status quo amongst nations remains largely because our world of nations is not set up to address other people's problems. I think we can identify these problems - the largest seem to be infrastructure, whether physical or intangible. There aren't good enough roads, pipes or wires. There aren't good enough schools, doctors, understanding of contraception, financial knowledge etc. And the governments are too corrupt. So even if you have the best intentions and know-how, when you send $100 million into a country to build roads and realize that you've actually increased income inequality because $80 million disappeared into a few pockets, it's easy to throw your hands up and back away. It's true, it's not your problem that Vietnamese officials are corrupt or don't prioritize the education in this region. With our current system setup, it's much easier for people to focus on their own problems, of which there always plenty. There is no accountability for someone else's poverty, even if you are unwittingly complicit in exacerbating it.
Superstar economist Jeffrey Sachs describes the situation in another way: it's not just that there are billions of people at the lowest rung of the economic ladder, it's that billions of people are not even on the ladder. Try as they might, bright as they might be, without external assistance they will never escape from poverty because the markets are working against them. The way I like to picture this situation is if you made a graph with every individuals salary on the y-axis and individual people on the x-axis and then tracked where every dollar they spent went, you'd see that a lot of the money that the rich spend goes to other rich people. Some of it trickles down, but as rich people go out to expensive restaurants and buy expensive apartments and cars, a lot of that money circulates among the rich. Similarly, down at the bottom of the graph, poor people sell goods or provide services to other poor people, very rarely getting any monetary input from the people above them.
So I thought I had an idea. If I travel to these places, I could identify the people not on the ladder, those circulating meager savings amongst themselves, and buy stuff from them, or even just give them money. In Hong Kong I'd tried to put this into practice. Whenever I could, I'd get my groceries at the wet market, where old people who didn't go to high school cut the day's meat and leave it out on tables without refrigeration. I'd eat street food or at local restaurants and buy simple items like water and socks from stall vendors instead of from a corporation. None of this was particularly onerous. However, the vast majority of my money went to rent, more expensive restaurants, bars, movie theatres etc. I estimate I spent less than 1% of my money to people "off the ladder," as identified by them running businesses with very low capital costs.
I've found this even more difficult to implement when traveling. The people off the ladder are mostly offering me things I don't want. There are lots of useless souvenir trinkets, and there are the groceries and then there are the items catering to locals that I don't even understand. The language barrier hurts. Old women in Vietnam were often selling bottles of some yellow tonic. I never figured out what it was, and never shelled out $2 for it. I do eat my fair share of local meals, but it starts to feel like a burden, trying to constantly pick out which restaurant looks the shabbiest. And I can't ensure that the guesthouse I stay in is Mom and Pop run - in fact most of these aren't on booking.com or hostelworld. Lastly, I just don't have that much money. I double my pay as a tip to people I think need it, but this usually amounts to an extra $2.50. Certainly not a life changing amount. I can't even afford to give $10 to every person who needs it much less $100. Maybe the effort is there but the effect isn't.
As we approach Siem Reap, I realize that a lot of the people on this bus aren't really going to Siem Reap. I'm the only foreigner here and while we are still about 50km away, the bus has already made two stops. It's dark but it appears the homes on the side of the road here are of better quality than before, some made of plaster with glass windows. How well educated are the people sitting next to me? Are they middle class? There are smart phones and casual brand clothing. But they didn't have their own cars to make this 6 hour trip, and it's quite possible they will never leave the country. And what sort of industry is out here? It's too far from the temples to get any tourism revenue. Even when it's right in front of you, there are a lot of pieces to an economy hidden to you.And even when poverty is right in front of you, it's not simple to contextualize it. Are these "poor" people happy? Are they more satisfied with what they have than I am? Is it better to make $2/day in a village where that's average, or $100/day in a city where everyone else has so much more? In these philosophical debates where it becomes clear that there's no equation for happiness and so much is relative, a lot of people shy away and instead focus on poverty-related issues like health and education. We can't tell if people are sadder, but they're definitely dying earlier. I won't discount these measurable metrics, but I find plenty of other issues that poverty breeds. Poverty breeds hopelessness - when you don't see any way out of poverty because no one around you has ever created a blueprint for escaping poverty, it's easy to give up. Poverty breeds boredom - many jobs I see are monotonous and involve waiting on events outside your control. Poverty leads to distorted decision making - when you can't find a way out of your boring job in your tiny village that produces nothing and someone comes along with a promised escape, you might give up your better instincts and take this risk. It's how you have thousands of laborers signing 5 year contracts to work in deathly construction sites in the Middle East. It's how people get lured into sex trafficking, or recruited into drug gangs. Distortions like these are sprawling problems with many branches but poverty right at their root.
When you are traveling to developing countries, you often come face to face with these distortions. You get harrassed by tuk-tuk drivers desperate for your service. You come across begging children repeating the word "school" but who very often have to hand over your money to pimps. You come across hardworking people with life savings totalling less than the emergency money in the bottom of my bag. You walk around with so much power and respect simply because of where you are from.
I believe there actually is a solution here. Paradoxically, it's tied into the same source of the problem: globalization. While the hard effects of globalization may have worsened inequality, the soft effects of globalization may eventually alleviate it. When multinational corporations enter a new country looking to cooperate rather than exploit, to share knowledge and provide new opportunities rather than extract value and leave, then we have a chance. Globalization's benefits - creating more multicultural people, increasing awareness of international issues, making it easier for people from opposite of the globe to not just do business together but simply interact - all need to be magnified. We need Americans to better understand what life is actually like in a Cambodian village, and we need Cambodian villagers to learn what's going on in New York. I think we need more people traveling to developing countries and spending a few extra dollars at the street fruit stall. Even if those few dollars don't make that much difference, collectively having more globally aware people can only help. Individual travellers as an agent of change can't solve global inequality on their own, but I think they are a critical part of the solution. Hopefully some of these travellers may run a multinational corporation, and others may become players within the government. Hopefully all these people will take their experiences and refuse to be indifferent anymore. It takes the political will of the people to stand together and say that we shouldn't be living in a world where some people are developing a hyperloop and others don't have paved roads.
1 comment:
Nice piece Cal.
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