Tag Archives: economic history

Narrowing global inequities: a reading list

Lately I’ve been working with Paul Polak on a book about how to end global poverty. (Berrett-Koehler will publish the book in 2013.) Paul’s previous book, Out of Poverty, was published six years ago, and this new work – provisionally titled The Business Solution to Poverty – represents the evolution of his thinking, six more years of work with poor people in developing countries, and the reading and relevant field experience I’ve had over the years.

As I’ve dug more deeply into the subject of global poverty, it has become increasingly clear to me that truly understanding how today’s glaring inequities have come about requires extensive knowledge in a wide array of topics, from Third World history to social psychology, development economics to the history of business and international trade.

Well, I confess I’m no expert in any of those fields. I’ve read widely in some, superficially in others, and I’m learning a lot.

My reading has emphasized economic history, the economics of poverty, colonialism, Third World development, social enterprise, and the ongoing debate about the impact of “foreign aid” (more properly, overseas development assistance). Along the way, I’ve reviewed in this blog many of the books I’ve read.

In previous posts, I’ve offered up reading lists on some of these subjects individually. Here, I’m sharing a compiled list. These are the books I’ve actually read. Where I reviewed a book, you’ll find boldfacing and underlining that signifies a link to my review. The books are listed alphabetically by the author’s last name.

Banerjee, Abhijit, and Esther Duflo, Poor Economics A Radical Rethinking of the Way to Fight Global Poverty. PublicAffairs, 2011. (review to come)

Bornstein, David, How to Change the World: Social Entrepreneurs and the Power of New Ideas. Oxford University Press, 2007.

——, The Price of a Dream: The Story of the Grameen Bank. Oxford University Press, 2005.

——, and Susan Davis, Social Entrepreneurship: What Everyone Needs to Know. Oxford University Press, 2010.

Clark, Gregory, A Farewell to Alms: A Brief Economic History of the World. Princeton University Press, 2007.

Cohen, Ben, and Mal Warwick, Values-Driven Business: How to Change the World, Make Money, and Have Fun. Berrett-Koehler Publishers, 2006.

Collier, Paul, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. Oxford University Press, 2007.

Collins, Daryl, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven, Portfolios of the Poor: How the World’s Poor Live on $2 a Day. Princeton University Press, 2009.

Crutchfield, Leslie R., and Heather McLeod Grant, Forces for Good: The Six Practices of High-Impact Nonprofits, 2nd Edition. Jossey-Bass Publishers, 2012.

Diamond, Jared, Collapse: How Societies Choose to Fail or Succeed. Viking Press, 2005.

Easterly, William, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Penguin Press, 2006.

Elkington, John, and Pamela Hartigan, The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World.Harvard Business Review Press, 2008.

Govindarajan, Vijay, and Chris Trimble, Reverse Innovation: Create Far From Home, Win Everywhere. Harvard Business Review Press, 2012.

Guha, Ramachandra, India After Gandhi: The History of the World’s Largest Democracy. HarperCollins Publishers, 2007.

Hochschild, Adam, King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa. Houghton Mifflin Company, 1998.

Kamkwamba, William, and Bryan Mealer, The Boy Who Harnessed the Wind: Creating Currents of Electricity and Hope. HarperCollins Publishers, 2009.

Kidder, Tracy, Mountains Beyond Mountains: The Quest of Dr. Paul Farmer, a Man Who Would Cure the World. Random House,2003.

Kristof, Nicholas D., and Sheryl WuDunn, Half the Sky: Turning Oppression Into Opportunity for Women Worldwide. Knopf, 2009.

Light, Paul Charles, The Search for Social Entrepreneurship. Brookings Institution Press, 2008.

Lynch, Kevin, and Julius Walls, Jr., Mission, Inc.: The Practitioner’s Guide to Social Enterprise. Berrett-Koehler Publishers, 2008.

Mehta, Pavithra, and Suchitra Shenoy, Infinite Vision: How Aravind Became the World’s Greatest Business Case for Compassion. Berrett-Koehler Publishers, 2011.

Moyo, Dambisa, Dead Aid: Why Aid is Not Working and How There Is a Better Way for Africa. Farrar, Straus and Giroux, 2009.

Polak, Paul, Out of Poverty: What Works When Traditional Approaches Fail. Berrett-Koehler Publishers, 2006.

Prahalad, C. K., The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Pearson Prentice Hall, 2004.

Sachs, Jeffrey D., The End of Poverty: Economic Possibilities for Our Time. Penguin Press, 2005.

Schwartz, Beverly, Rippling: How Social Entrepreneurs Spread Innovation Throughout the World. Jossey-Bass Publishers,2012.

Sullivan, Nicholas P., You Can Hear Me Now: How Microloans and Cell Phones Are Connecting the World’s Poor to the Global Economy. Jossey-Bass Publishers, 2007.

Wrong, Michaela, It’s Our Turn to Eat: The Story of a Kenyan Whistle-Blower. HarperCollins Publishers, 2006.

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A lucid analysis of how the 1% got to be that way, and how the 99% can fight back

 

 

 

1A review of 99 to 1: How Wealth Inequality Is Wrecking the World and What We Can Do About It, by Chuck Collins

@@@@@ (5 out of 5)

Leave it to a scrappy little San Francisco publishing house to be first out of the gate with a primer on the central lesson to be learned from the Occupy Wall Street movement: that the disparity in wealth (not income) between the 99% and the 1% is the most significant economic fact about the U.S. today. Most books spring from the minds of authors, who in turn seek out publishers, but Berrett-Koehler has a long history of identifying themes and issues that cry out for analysis — and then finding the authors to take them on. In Chuck Collins, one of the nation’s leading scholars and activists on the topic of wealth inequality, Berrett-Koehler struck paydirt.

In 99 to 1, Collins lucidly spotlights the terrible price we all pay for the massive imbalance in wealth between today’s haves and have-nots. He surveys U.S. economic history, drawing a parallel between the Gilded Age of the 1890s through the 1920s and the current era, beginning in the late 1970s — both of them periods when the disparity of wealth grew to unprecedented proportions. Collins explains the political dynamics that gave rise to today’s wealth disparity, identifying those responsible as the “rule-riggers” among the 1%, chiefly the leaders of Wall Street-based financial institutions and of the transnational corporations they finance as well as a small number of the individuals who are benefiting the most from the current economic regime.

“In a nutshell,” Collins writes, “(1) the rules of the economy have been changed to benefit asset owners at the expense of wage earners, and (2) these rule changes have benefited global corporations at the expense of local businesses.”

As Collins explains, the 1% today includes individuals with net worth of $5 million or more — a total of roughly 3 million individuals or 1.5 million households. Obviously, this large number of people aren’t co-conspirators in a historic scheme to plunder the U.S. economy. However, a small percentage of the 1% does actively participate in an ongoing effort to shift wealth from the poor and middle class to the coffers of those who are already rich.

These “rule-riggers,” most of whom can be found among the top one-tenth of 1%, use every advantage at their disposal: their direct access to legislators; the thousands of lobbyists their companies maintain on Capitol Hill and in statehouses throughout the country; their personal and corporate philanthropy; and their positions in society as “opinion leaders.” The result of their three decades of effort has been to weaken labor unions; undermine government regulations ensuring public health, job safety, and environmental quality; seizing control of both major political parties; and disproportionately benefiting not just the 1% as a whole but the very richest among them. As Collins notes, “between 1979 and 2007, the top one-tenth of 1 percent realized 36 percent of the total [gain realized by the top 1 percent]. The 1 percent saw their incomes go up 224 percent over these years, while the richest one-tenth of 1 percent saw theirs rise by 360 percent.”

Tragically, the growing disparity in wealth is neither new nor just an American phenomenon. More than 2,000 years ago, Plato (yes, that Plato) wrote that “the legislator should determine what is to be the limit of poverty or of wealth.” And Collins cites a UN study finding that “the richest 1 percent of the world’s adult population, individuals worth at least $514,512, owned 39.9 percent of the world’s household wealth. This is greater than the wealth of the world’s poorest 95 percent, those adults worth under $150,145, who together hold just 29.4 percent of the world’s wealth.” Not to speak of the billions of people who don’t have a pot to piss in, let alone $150,000!

Collins devotes considerable attention to identifying the steps that need to be taken to reverse the direction of the pendulum. He is careful to point out that any movement to do so will find a great many allies within the 1 percent. Collins cites polling results that “over 65 percent of people in the 1 percent agree with the concerns of the 99 percent and believe they should pay more taxes.” However, an effort to reverse the present course will require a fundamental shift in society’s values over many decades. Collins enumerates the clashing values between those at the top of the wealth pyramid and most of the rest of us and lays out a policy agenda based on a “seven-generation perspective — the belief that our actions should be considered in light of their impact seven generations into the future.”

99 to 1 should be required reading for every public official, every activist, and every citizen who wants to understand what really makes society tick and how its malfunctioning economic systems can be repaired.

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Why is the Global North so much richer than the South?

1Thoughts while reading A Farewell to Alms: A Brief Economic History of the World, by Gregory Clark

@@@@ (4 out of 5)

In his Pulitzer Prize-winning 1997 book, Guns, Germs, and Steel: The Fates of Human Societies, Jared Diamond delved into biogeography to explain how the West — otherwise termed the Global North or the First World — developed faster and soon became much richer than the rest of the world.

The fundamental reason, Diamond asserted, lay in accidents of geography: the Eurasian landmass straddles the globe laterally from East to West, imposing relatively uniform climatic conditions and creating habitats congenial for large animal species such as the cow, the pig, and the sheep that could be readily harnessed for human use. By contrast, the lands of Africa and the Americas are arrayed from North to South and host very few native varieties of such useful large animals. Condensed into one paragraph, this argument raises far more questions than it answers. But laid out in its full glory in Diamond’s engrossing book, the thesis is credible and profoundly provocative.

Jared Diamond is one of a handful of Big Picture thinkers who have attempted with mixed success to make sense of the ebb and flow of human history. Adam Smith was another. So was Karl Marx. Each, in his own way and working within his own discipline, revealed some startling insight about how we came to be the way we are.

Ten years after Diamond’s blockbuster came Gregory Clark’s A Farewell to Alms, yet another effort to answer that same profound question addressed in Guns, Germs, and Steel: why are some parts of the world so much richer than others? Dismissing Diamond, Smith, and Marx alike and finding inspiration instead in Thomas Malthus’ An Essay on Population, Clark locates the answer in his own discipline of economic history. (Why is that not a surprise?)

In a volume riddled with charts, graphs, and “simple” equations only an economist could love, Clark reduces the bigger question to one that’s far more focused: why did the Industrial Revolution occur in Europe, and specifically England, and not somewhere else in the world? Clark’s answer, it turns out, is that beginning in the late Middle Ages rich people in England had more than twice the number of children surviving at death as the poorest people, so that over the centuries from 1200 to 1800 “bourgeois values,” the attitudes and behaviors that had made people rich, gradually took hold throughout society. (How did this happen? Because of primogeniture in Europe, only first sons inherited the wealth, driving later sons into downward mobile circumstances and thus displacing the poor. “China and Japan did not move as rapidly along the path as England simply because the members of their upper social strata were only modestly more fecund than the mass of the population. Thus there was not the same cascade of children from the educated classes down the social scale.”) If you doubt this seemingly facile line of argument, Gregory Clark has 400 pages of charts and graphs to convince you.

A Farewell to Alms divides human history into two very broad eras: from the beginning of recorded history approximately 10,000 years ago, or even earlier, until about 1800; and from 1800 until the present — and beyond. Before the Industrial Revolution, Clark asserts, humankind was enmeshed in the “Malthusian Trap,” a feedback loop in which population grew to consume the food available but died off as it grew too great to survive. For millennia, in Clark’s view, the population thus grew at a painfully slow pace from year to year, expanding only to meet the equally slow expansion of agriculture into new regions of arable land, with no sustained gain in income per person. “The average person in the world of 1800,” Clark writes, “was no better off than the average person of 100,000 BC. Indeed in 1800 the bulk of the world’s population was poorer than their remote ancestors.”

Then, around 1800, something happened. Whether the inflection point was 1760 or 1860, as other scholars have suggested, the event that rescued the human race from the Malthusian Trap was the Industrial Revolution. During the century from 1760 to 1860, England’s population tripled — but instead of collapsing in traditional Malthusian fashion, the English people grew richer. So it went throughout much of Europe as well, and thus began “The Great Divergence” between West and East. For nearly the next 200 years, income per person in those countries that had experienced the Industrial Revolution continued to climb, while that in much of the rest of the world stagnated (and, in Africa, declined). Clark concludes, “There walk the earth now both the richest people who ever lived and the poorest.”

Why did the West outpace the rest to such a glaring extent? Clark reasons his way through one popular reason after another, dismissing them all, and ends up with a single-factor explanation: innovation. It was the constant flow of new ideas that enabled the people of the West to increase productivity year after year at a steady rate, enriching their society and widening the gap between rich nations and poor to the greatest extent ever seen in world history, a ratio now on the order of 50:1.

A Farewell to Alms is challenging, thought-provoking, perhaps even important. It’s also frustrating and an exceedingly tedious read. Truth to tell, I couldn’t even finish the book. Perhaps someday a writer with an engaging style and much less affinity for charts, graphs, and formulas will render Gregory Clark’s thesis into a more readable form. I can only hope so.

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