Opinionista Ivo Vegter 7 January 2018

The state of the world is awesome

It is hard to look past our stalled economy and captured state to appreciate a bigger-picture view of the state of the world. But on a longer view, we’ve never had it better. With very few exceptions, that is true for rich and poor alike.

“We cannot absolutely prove that those are in error who tell us that society has reached a turning point, that we have seen our best days. But so said all before us, and with just as much apparent reason … On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?”

British historian Thomas Babington Macaulay wrote this in 1830. Throughout history, one can find expressions of a sense that the world was going to hell in a handbasket, and yet this sentiment was almost never true. By almost every measure you care to think of, the conditions of life on this planet are better than ever before. Even grave setbacks – the Black Plague, the Potato Famine, the World Wars, industrial-era pollution, world communism – have proven to be temporary blips in otherwise upward trends.

Let’s remind ourselves of a few of the reasons to remain optimistic, even in the face of an economy that’s in the tank and a government that is rotten with corruption. Max Roser at Our World in Data compiled a convenient collection of charts on the improvement in six metrics reflecting the state of the world over the past two centuries.

Not only have these metrics improved dramatically over the years, but the improvement has accelerated during the 20th century, to reach record levels today.

Improving lives is not limited to developed countries, or to large emerging economies such as China. The Oxford Poverty & Human Development Initiative has been compiling and tracking a Multidimensional Poverty Index, based on measures of health, education and living standards.

In a sample of 22 diverse countries, the scholars found that 18 had significantly reduced their multidimensional poverty. “Reductions in the intensity of MPI poverty were strongest in relatively poorer countries,” they wrote. “If the current absolute pace of poverty reduction were to continue steadily, then half of the countries would eradicate MPI poverty within 20 years, another seven within 41 years, and the remaining four countries within 95 years.”

In sub-Saharan Africa, 30 countries, home to 92% of the population in their sample, significantly reduced both multidimensional poverty and their share of poor people.

Perhaps surprisingly, common claims about poverty reduction actually understate the trend significantly. In 1990, the poverty line was set at $1 a day. Today, it stands at $1.90. Even by this higher standard, we’ve seen a 74% reduction in poverty rates since 1990, from 1.9 billion people (37.1% of the global population), to 702 million (9.6%) in 2015.

And what about inequality? The first answer is simply that inequality does not matter. The absolute living conditions of the poor matters. Reported unhappiness with living conditions correlates to GDP per capita, not inequality.

The more important answer, however, is that global inequality is, in fact, decreasing. If we analyse measures of inequality, we find that the claim that markets are the cause of rising and unsustainable inequality is simply not supported by the data.

Is all this good news about human living conditions actually bad news for Mother Nature? Intuition would suggest it is, by the simple logic that natural resources are used (and often abused) to produce human prosperity. Specifically, prosperity is strongly correlated with energy consumption. However, this view is simplistic, and does not provide the full picture of the state of the environment in relation to economic prosperity.

The Environmental Sustainability Index was developed by the Yale Center for Environmental Law and Policy and the Center for International Earth Science Information Network at Columbia University in 2005. The researchers found that the index was positively correlated with capita GDP, which suggests that richer countries can – and do – invest in pollution control and other environmental amenities. They also concluded that competitiveness correlates positively with environmental sustainability.

Thanks to the rule of law, market institutions and global free trade, the world has never been a better place for all of humanity than it is today. This is something to celebrate as we enter a new year. That does not mean we can be complacent. Growing prosperity and happiness requires constant vigilance. It requires fighting corruption, calling out cronyism, avoiding socialism and opposing warmongering.

Back in the 18th century, Samuel Johnson wrote: “Such is the state of life, that none are happy but by the anticipation of change: the change itself is nothing; when we have made it, the next wish is to change again. The world is not yet exhausted; let me see something tomorrow which I never saw be.”

And so it should be. We should aim to fix what is wrong with our world, and seek changes that will improve it even more. But in our quest for an even better society, we should not give in to pessimism and lose sight of the awesome progress we have already made. DM

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