Poverty and Inequality in the Global Economy

By Yates, Michael D. | Monthly Review, February 2004 | Go to article overview

Poverty and Inequality in the Global Economy


Yates, Michael D., Monthly Review


Capitalism is hundreds of years old and today dominates nearly every part of the globe. Its champions claim that it is the greatest engine of production growth the world has ever seen. They also argue that it is unique in its ability to raise the standard of living of every person on earth. Because of capitalism, we are all "slouching toward utopia,"--the phrase coined by University of California at Berkeley economist J. Bradford DeLong--slowly but surely heading toward a world in which everyone will have achieved a U.S.-style middle-class life. (1)

Given the long tenure of capitalism and the unceasing contentions of its adherents, it seems fair to ask if it is true that we are "slouching toward utopia." Let us look at three things: the extent of poverty and inequality in the richest capitalist economy--that of the United States; the extent of poverty and inequality in the poor countries of the world; and the gap between those countries at the top of the capitalist heap and those at the bottom.

The United States is often referred to as a nation dominated by the middle class and one in which it is relatively easy for a poor person to become a person of means. Here, it is said, equality of opportunity rules. It is hard to know what phrases like "middle class" and "equality of opportunity" mean, but it is fair to think that such a society ought not to be one in which there is widespread poverty and ought to be one in which people do indeed have a great deal of economic mobility.

The data on poverty and inequality of income and wealth do not square very well with this image. In the United States, the federal government had defined a "poverty level of income," one below which families are defined to be poor. It is an income below which families would find it difficult to live without serious problems and which would place them in real danger when faced with any sort of economic crisis, such as a sick child or an injury at work. This official poverty level of income is equal to three times the minimum food budget calculated by the Department of Agriculture, a very modest standard with numerous restrictive and unrealistic assumptions built into it, for example, that poor families will be able to buy food at the lowest unit price and will know how to convert the cheapest food into nutritious meals. In 2002, this was $18,392 for a family of four, or $12.60 per person per day. In 2002, 34.6 million persons lived in poverty, 12.1 percent of the population. The incidence of poverty was 24 percent for blacks and 21.8 percent for Hispanics. In 2001 (I don't have data for 2002), 35.2 percent of black children under six lived in poverty, as did 29.1 percent of Hispanic children under six. These numbers rise and fall over time and while they have been higher in the recent past, they are still remarkably high when we consider the enormous productive capacity of the U.S. economy and the more than 200 years in which this capacity has steadily risen. And if we used a more realistic definition of poverty--such as one-half the median income, a poverty definition typically used to compare the rich capitalist economies--the incidence of poverty would increase dramatically to 17 percent (in 1997), or more than 45 million persons. (2)

What are the chances that this extensive poverty could be eliminated? Not very high, given that this poverty coincides with large and growing inequality of both income and wealth, inequalities ingrained in the laws of motion of capitalism.

In the United States in 2000, income inequality was greater than at any time since the 1920s, with the richest 5 percent of all households receiving six times more income than the poorest 20 percent of households, up from about four times in 1970. A study by economist Paul Krugman (who has been skillfully assailing the Bush administration in his New York Times column) estimated that perhaps as much as 70 percent of all of the income growth in the United States during the 1980s went to the richest 1 percent of all families.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Poverty and Inequality in the Global Economy
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.