The Land of Zork
In a discussion on a previous post (Does Not Work) Roger Nome (who appears to have taken over from Millsy as the resident lefty – Thanks for caring, Rog), mentioned the difference between absolute poverty and relative poverty. Absolute being the stuff experienced in Africa and Relative being 60% of the median income or less. When it come to assessing whether we are making inroads on poverty, I think that absolute measures give the true picture. Roger clearly thinks the latter measure is truer. I note that this is true amongst most left wingers. Let me show you why relative poverty is nonsense by telling you a story:
“Once upon a time there was a small island known as the land of Zork. It’s inhabitants were all software engineers. Not your average code monkeys – these boys were true software entrepreneurs. Some of them even worked for Apple. They were all very wealthy.
“
“The economy of Zork was slightly peculiar. Almost everything was automated (these people were, after all, geeks). Nothing except software was produced, every other service was contracted and brought in from the mainland and all goods were imported. This made the cost of living about five times higher than New Zealand’s
“
“The lowest paid person on the island earned $1 million a year. a number earned several billion, but the median income was $2.8 million. The “income gap” was measured in billions of dollars and the “Poverty line” was $1.6 million.
“
“The poor of the island began to demand that the billionaires give them a portion of their money in order to alleviate their relative poverty. They could not, for instance, afford 20m super yachts or Lamborghinis. The billionaires suggested that they might try to write better software instead. They even offered to show them how this might be done.
“
““You don’t care about us poor people” The millionaires cried, “You are just a selfish bunch of rich pricks!”
“
“The millionaires hired a gang of mercenaries to come and take the money forcibly from the billionaires. The billionaires watched as the mercenaries stripped their houses of valuables. When the mercenaries had taken everything, the billionaires climbed on board their super yachts and gently pulled the plug out of the island.
“
“As the island sank beneath the waves, the billionaires sailed for a faraway hidden valley where they met a mysterious person called Ayn Rand.
“
“But that is another story”
For those of you who think this story is merely fantasy, the figures used are about a hundred times higher the the same figures in New Zealand – exactly the same ratio as in most of sub-saharan Africa. Yes, Africans probably see us in much the same way as we see the inhabitants of the land of Zork. This is why relative poverty rates are stupid. Only absolute levels tell us how far we have really come.
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Mar 31 09 10:12 am
You’re right. Relative poverty is a nonsense.
Anyone with a good job can reduce relative poverty by leaving the country, thus lowering the median wage and the percentage of people who fall below 60% of it.
E.g. A country with four people, earning $5, $4, $3 and $2. Median is $3.50, 60% of that is $2.10. So 25% of population below poverty line.
$5 (or $4) guy leaves, then median is $3 and 60% of that is $1.80. Poverty is eliminated. Problem solved.
Mar 31 09 11:01 am
Once again I have to point out that you fundamentally misunderstand what people derive their sense of well-being from.
See this study for instance:
http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V8F-3V5MPT8-V&_user=100241&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000007718&_version=1&_urlVersion=0&_userid=100241&md5=4d3ed369f5f799536df10b1203aea1fc
Both absolute well-being and relative position seem to matter to people. The evidence indicates that positional concerns are extremely important.
Low social status creates low self esteem, which then creates a variety of social pathologies. The trick is to develop an ethics in which every human is valued and accorded decent status purely due to their being human (i.e. the secular humanistic Scandinavian societies). This is why the Scandanavian countries have such low crime and imprisonment rates.
Reminds me of a beautiful quote by singer-songwriter Elliott Smith:
“All things have a place, under the moon, as well as the sun”
http://video.google.com/videosearch?hl=en&q=little+one++elliott+smith&um=1&ie=UTF-8&ei=-UDRSe7JEYv-swPxo73VAw&sa=X&oi=video_result_group&resnum=4&ct=title#
Mar 31 09 11:26 am
Mac
the presence of roger nome, makes me hanker for the good old days with Millsy
Adam
Mar 31 09 11:33 am
Roger:
Once again I have to point out that you fundamentally misunderstand what people derive their sense of well-being from.
What I fundamentally understand, Rog, is that you think that a sense of well-being is more important than actually being well.
Mar 31 09 11:44 am
No MacDoc – if you read what i have typed, CAREFULLY, you will understand that i think BOTH matter.
Also – are you trying to argue that a person’s sense of well-being does not impact on their actually being well? As someone who has experienced moderate clinical depression, i can tell you, once again, that you fundamentally misunderstand human beings.
Mar 31 09 12:32 pm
Suddenly we move from a vague sense of social well-being to clinical depression?? You are so good at shifting arguments, rog. Oh, and obviously both matter, I am merely point out that you seem to value well-being above actual wellness.
Mar 31 09 12:43 pm
You joke about these things, but I think we here have shown a lefty making a case for millionaires being given welfare in certain situations (company bailouts aside).
Which simply creates a never ending stream of “problems” for bigger and bigger government to “solve”.
Mar 31 09 1:05 pm
MacDoc – Self-perception has a HUGE impact on well-being. Furthermore, if you don’t value yourself you won’t value your children – you will abuse them. You relegate parents to the scrap-heap of the market, and children end up suffering. It’s a perverse ideology, that your market value defines your value as a human being – absolutely fucked.
Srub – lol – we would need 50 Earths to support that many millionaires.
Mar 31 09 1:18 pm
Nothing wrong with valuing yourself, it’s basing that value on material things then expecting other people to pay for them that causes problems.
Apr 1 09 10:57 am
Homepaddock:
Agreed – but that’s the values system that is preached to us by the rightist elites. You can’t have it both ways.
Apr 15 09 5:16 pm
I have to agree with the both of you on different senses.
Take this example. Children in the slums of India. One child may have a few more dollars than the rest of the children therefor “relatively” the child is considered well-off, within their socioeconomic niche. But throw that child into the richer parts of India and all of a sudden the child is dirt poor way below the poverty line. The problem is the ethnocentric point of view on “well-being”, does a man have to have a Lamborghini to be classed as being well? or does it really have to be in context to whom their with.. say all their friends have Lamborghini’s. I believe that both need to be taken into consideration or a definite misconception of the idea will render our sense of well-being biased. Neither are nonsense but neither are singularly true senses of the population, with the both however not a “true” indication can be made, but a closer more precise indication of ones well-being may be identified.
I agree with Mac because he takes the stand of our society needing to progress so that everyone is doing well, and I believe this is a very valid point.
But I also agree with roger with the concept of “feeling” better because you have more than the average in the country.
Take for example, Foreigners that come into NewZealand generally have more money and their kids can afford to get nice cars therefor “relatively” they are conceived as “richer” whereas in their home country the same vehicle for the same child with the same family and income may not stack up as high with the rest and therefor not be perceived as “richer”. So where would you rather live?