New Study takes the Mask Off Capitalism and Extreme Poverty Discourse

No surprise: everything we’ve been told about our economic system is a lie – someone tell Steve Pinker and Bill Gates

“Evidence is always partial. Facts are not truth, though they are part of it — information is not knowledge. And history is not the past — it is the method we have evolved of organising our ignorance of the past. It’s the record of what’s left on the record. It’s the plan of the positions taken, when we to stop the dance to note them down. It’s what’s left in the sieve when the centuries have run through it — a few stones, scraps of writing, scraps of cloth. It is no more “the past” than a birth certificate is a birth, or a script is a performance, or a map is a journey. It is the multiplication of the evidence of fallible and biased witnesses, combined with incomplete accounts of actions not fully understood by the people who performed them. It’s no more than the best we can do, and often it falls short of that.” — Hilary Mantel

I love that quote, “history is not the past — it is the method we have evolved of organising our ignorance of the past.” I dedicate a lot of my time and thoughts to the myths and lies perpetrated by the collective West about how the world came to be the way it is. In other words, trying to confront my own ignorance of the past and sharing what I find.

There comes a point in our lives when we’re supposed to realize most of what we’ve been taught is a partial truth or complete fabrication. That is especially true of history and the modern field of shamanic tea leaf reading known as economics.

The myths surrounding capitalism are some of the most obviously false and egregious, yet the most believed. Like many great lies, bullsh*t such as ‘capitalism has lifted the world out of extreme poverty’ is repeated so often, it has become an internalized truth like the sun being the center of the solar system, two plus two equals four, and Jimmy Hendrix is the GOAT.

But scratch the surface, read a book or two, think about it for more than a second, and the narrative completely crumbles.

We confuse — or I think are intentionally taught to confuse — production and trade with capitalism itself, thinking we wouldn’t have bread, shoes, or a roof over our head without capitalism, somehow forgetting that humans had production, trade, bread, shoes, and housing millennia before its creation.

It’s an over-simplified propagandistic history meant to justify the extreme levels of inequality, distract from the insane levels of abject poverty that still exist, and keep sympathetic citizens from imagining an alternative — “If we fundamentally change capitalism, where the f*ck will I get my bread, shoes, and shitty apartment?!”

Oligarchs like Bill Gates and their court jester academics like Steven Pinker love to parade around telling anyone who’ll listen how, for most of human history, the overwhelming majority of people were starving and barely surviving day to day, but through the wonders of capitalism, the world has seen a steady climb up the development ladder, and all we need to do is hold the course and will soon see the end of poverty on planet earth. They even have fancy graphs — really only one — proving how kick-ass unfettered capitalism has ‘solved’ all of our problems.

But recently, Jason Hickel at the University of London School of Economics co-authored a new study with Dylan Sullivan that takes a sledgehammer to the capitalism folklore. The paper is entitled, “Capitalism and extreme poverty: A global analysis of real wages, human height, and mortality since the long 16th century.”

In it, the two academics completely debunk the common narratives and expose the bullsh*t surrounding capitalism and poverty reduction discourse — Hickel has been dunking on Pinker and Gates for years.

It’s an over-simplified propagandistic history meant to justify the extreme levels of inequality, distract from the insane levels of abject poverty that still exist, and keep sympathetic citizens from imagining an alternative…

The standard narrative and data Gates and Pinker use claim that prior to capitalism, a shocking ninety percent of humanity lived in extreme poverty, defined as an inability to access essential goods such as food. Think about that statement for a second. According to these kind-hearted guys with no ulterior motive, nine out of ten people in ancient Rome, Damascus, Beijing, Native American tribes, and all other historic civilizations were on the verge of starvation their entire lives.

Not only does it just intuitively feel false, but the data proves it’s completely ridiculous. Research and this new study show that extreme poverty hasn’t existed at nearly that level throughout most of human history, is not a natural human condition, and in 2022, there’s no reason it should exist at all.

And yet, even by Pinker and Gates’s own highly problematic numbers, almost one billion people still struggle to meet their basic survival needs, but the real figures are much worse.

A good portion of this mythology and debate can be traced to a single source. Pinker, in his best-seller Enlightenment Now, popularized a graph that was first developed by Martin Ravallion (2016), using historical data from a paper by Bourguignon & Morrison (2002), and Gates references and tweeted it , giving himself a nice pat on the back.

One problem with the Ravallion-Gates-Pinker graph is the starting year of 1820. It’s random as f*ck. Capitalism came into form in the late 15th and early 16th centuries, so this data set, regardless of what it claims to measure, leaves out almost three hundred years of colonialism, destruction, displacement, famine, and genocide.

It starts to measure ‘economic data’ in parts of the world that had been ravaged by centuries of some of the worst atrocities in human history. Anything after that would seem better, but as we’ll see, their numbers are still incredibly misleading.

The major problem comes from the metrics. In a nutshell, they take arbitrary numbers and limited data, pretend to show that 90% of humans lived in extreme poverty since the beginning of time, and then say, “look, 90% of you peasants aren’t dying of starvation! That means this economic system is the best human creation and Bill, Jeff, and Elon should be able to accumulate more wealth than ten thousand feudal lords.”

In all seriousness, to call them arbitrary numbers isn’t extreme. The Ravallion graph uses GDP data and PPP (purchasing power parity) based on a basket of consumer goods, which Hickel says can be useful to show total production and consumption but doesn’t reflect people’s access to essential resources.

For the period prior to 1980, however, the graph relies on estimates from Bourguignon & Morrison (2002), who use historical GDP data in National Accounts Statistics (NAS), from Madison (1991).  This is problematic because GDP fails to adequately account for non-commodity forms of provisioning, such as subsistence farming, foraging, and access to commons, which are important sources of consumption for much of the world’s population, particularly during historical periods. – J..D. & D.S.

They use GDP growth as a reflection of changes in household consumption, assuming, as many economists still do, that the two are linked when we know empirically they are not. At the same time, they completely ignore non-measurable economic yet essential activities like subsistence farming, which, historically, have been instrumental pieces of consumption and survival.

Because of these pervasive lies, we continue to worship the mythical Gross Domestic Product figures, but they’re not a marker of general well-being, and the way we measure them has changed over time.

The ‘things we measure in the economy’ getting bigger doesn’t mean wages have gone up or humans have better access to food, energy, or housing.

Leaving out centuries of data from around the world, even a glance at the American economy over the last fifty years reveals GDP is largely made up and has no direct correlation with human well-being.

Even if the economic data was accurate, which it often isn’t, to claim that mid-19th-century GDP increases in sub-Saharan Africa prove a higher standard of living for the population at large is outlandish and often the exact opposite of what happened.

If a forest is enclosed for timber, or subsistence farms are razed and replaced with cotton plantations, GDP goes up. But this tells us nothing about what local communities lose in terms of their use of that forest or their access to food. The impact on livelihoods is swept under the statistical rug. For instance, historical national accounts suggest that GDP per capita in the Spanish-occupied Philippines increased by over 15% between 1820 and 1902 (Bolt & vanZanden, 2020). Yet parish records indicate this was a period of increasing mortality, due to “a general deterioration of peasant livelihoods… a consequence of the rapid commercialization of peasant agriculture” (Smith, 1978, pp. 51-52) (pp. 51–52). – J.H. & D.S.

Poverty should be measured in people’s ability to meet basic needs. When looked at through that lens, an entirely different picture emerges.

Instead, most modern poverty self-adulation counts the percentage of humans living on $1.90 a day. Again, a completely arbitrary number and most self-respecting economists or sociologists say it should be around $7.40 a day. Also, putting the number as a percentage of the global population gives it a misleading spin, and Hickel says we should be using absolute figures.

But measuring these things realistically paints a much much much worse picture than Gates and Pinker want because they’re not seeking the truth; they’re engaged in propaganda.

Since they live in a fairy tale and many real poverty figures continue to get worse, they’ll probably soon ‘adjust’ the threshold and reduce it to $0.05 a day, and then have a rooftop gala with Angelina Jolie, Bono, and Sean Penn where they’ll all give congratulatory speeches about how the West and its capitalist innovation ‘ended hunger and poverty in the world.’

We need radical honesty and to look at human well-being.

Hickel and Sullivan ignore the GDP figures and focus on three indicators of welfare: real wages, human height, and mortality for five world regions (Europe, Latin America, sub-Saharan Africa, South Asia, and China) from roughly the 16th century onward.

They can then look at the real impacts of the emergence of capitalism and flip the pop-history discourse on its head.

Extreme poverty has not been a norm in human history and is a symptom of catastrophic social displacement. As co-author Dylan Sullivan says, “If extreme poverty is a sign of severe distress, relatively rare under normal conditions, it should deeply concern us that hundreds of millions of people continue to suffer this way today.”

The research paper goes into great detail on their methods, how they calculate ‘real wage’ figures, their analysis of the five aforementioned regions, and comes to three general conclusions. The first is that it is unlikely that extreme poverty was the norm before the 18th century, stating, “Historically, unskilled urban labourers in all regions tended to have wages high enough to support a family of four above the poverty line by working 250 days or 12 months a year.”

In other words, the majority of people were meeting their needs for survival. The times when extreme poverty appeared were primarily during severe social or economic disasters like war, drought, famine, or institutionalized dispossession of land as seen during colonialism.

Extreme poverty has not been a norm in human history and is a symptom of catastrophic social displacement. As co-author Dylan Sullivan says, “if extreme  poverty is a sign of severe distress, relatively rare under normal conditions, it should deeply concern us that hundreds of millions of people continue to suffer this way today.”

Not only was it not normal, it indicates something has gone very very very wrong, but in today’s world, we do everything we can to normalize, naturalize, and justify hundreds of millions of people starving.

We’re five hundred years into capitalism, and almost three-quarters of a billion people still don’t have their basic survival needs met.

That leads to the second conclusion of the research, which “is that the rise of capitalism coincided with a deterioration in human welfare.”

The introduction of capitalism, in all five regions studied, brought with it a decline in wages to below subsistence levels, a reduction in human stature, and increased mortality.

The aforementioned Spanish-occupied Philippines in the 18th century is a classic case study. Capitalism came to a region and the land was enclosed and converted into plantations for export crops. Local populations lost access to subsistence lifestyles, their ‘real wages’ were reduced, and their overall well-being drastically declined, leading to higher mortality rates. That was repeated across the globe.

Capitalism arriving didn’t bring wealth and eliminate poverty; it was the ‘mass social dislocation event’ that created the extreme poverty. And many parts of the world have yet to recover.

The third conclusion the authors make is that the rebound from this centuries-long period of catastrophic immiseration came in the late 19th century in Europe and the mid-20th century in the Global South, coinciding with decolonization, labor movements, and socialist political parties.

Hickel says, “These movements redistributed incomes, established public provisioning systems, and attempted to organize production around meeting human needs. Progress appears to come from progressive social movements.”

Simply put: a broadly-shared high standard of living wasn’t created by capitalism; it was created in spite of it.

Capitalism arriving didn’t bring wealth and eliminate poverty; it was the ‘mass social dislocation event’ that created the extreme poverty.

A factor in the decreasing quality of life across the West — and the globe at large — is that these lies are so completely believed and internalized. Working people are taught that their wealth is inextricably linked to Bill’s and Elon’s, if the magic numbers are going up, we’re on the right path, and capitalism is the only reason ninety percent of the peasants aren’t starving.

But capitalism isn’t production. It is characterized by the unlimited private capital accumulation at the expense of all else and the complete commodification of everything, even your data, diabetes, and child’s insecurities.

It’s an irrational hyper-pursuit of profits as the planet burns, marked by a religious-like faith in ‘free markets’ and eternal growth on a planet that has already reached many of its ecological output limits.

It’s a mass exploitation and social dislocation system that benefits a tiny minority at the top and does not and cannot account for the negative externalities to the planet or the majority of living breathing humans.

But it is faltering, and people can feel it. Unfortunately, a lot of the angst is being harnessed by forces that blame immigration and ‘globalists’ as the far right and neo-fascist surge across Europe and America, when late-stage financialized capitalism purchasing governmental institutions is the main culprit.

There needs to be an honest debate about capitalism and a conversation about what we’re doing and the horrendous effects of our economic system.

The main focus of our economies should be increasing human well-being.

McDonald’s, Walmart, and Exxon Mobil cannot and will not grow forever into eternity. And that’s okay.

This article by Mitchell Peterson was posted on September 18, 2022, to Medium Daily Digest, an online publication that I subscribe to.