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Poverty and Inequality

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McGill University
Sociology (Arts)
SOCI 254
Uli Locher

Poverty and Inequality How do we measure development? - GDP + other econ measures - GDP: sum of all econ activity in nat  if want to take into consid size of nat: GDP per capita - GNP vs GDP: Domestic = whatever econ activity w/in borders of nat  National = whatever nationals do (includes overseas activity) - GDP prob: may not mean same thing going fr/1 nat to the next  Have to control these measures for local prices  PPP (Purchasing Power Parity) controls - GDP + standard of living  GDP not measure of standard of living - Limitations of GDP + similar measures  Wealth distrib, non-market transactions, underground economy, asset value, non- monetary econ, quality improvements: new products, what is being produced?, sustainability of growth - What set off all this prosperity? Indus Rev - Machines = productivity gains = efficiency gains (incredible in all domains) - Cheap transportation, cheap access to resources - Long Century of Growth 1820 – 1950, many parts of world effected - 1960 – 2010: effected many parts of world also - Growth measured by income per capita  // by other aspects of soc devel (longevity, mortality rates, mobility reduction, nutrit levels) - Human Development Index: greatly increased values for all regions (optimistic) - Looking back on last couple of centuries = success story in terms of how most humans are doing - H: success story hides several issues: - Absolute gap b/w rich + poor widening  Poor grown little less poor, rich = extremely rich - Relative gap also widening  Only few poor nats can hope to ever close this gap  No way for any Sub-Saharn Afr nat reach similar levels of prosperity w/in next century - Considerable inequalities bound to stay w/us + even worsen  why? - Population growth still rapid in poorer areas - Cont fall in commodity prices (all but oil)  Products of many of poor nats become less expensive  Exporting these products = prob  Wheat produced in these nats may be more appropriate for their own consumption  H: econ terms, can’t resist competition fr/developed nat products - Debt trap still w/us  no obvious exit - Tech change cont tends to have multiplier effects in rich nats  Money being made fr/tech accruing in rich nats - Consequences of inequality - Cont strong emigration of edu ppl fr/poor nats to rich  Cont brain drain relatively speaking  shortage of qualified labour in poor nats  Ideally: migration would reduce inequality (Equilibrium Theory of Migration)  If move enough resources out of poor area, resources remaining have higher value  Adjustment: labour becomes cheaper in rich nats  Left: mass of unemp + angry young ppl H: most not revolting, trying to find jobs - Gini coefficients - Look @propo of ppl + propo of income (families) - Low Gini value = low inequality, high Gini value = high inequality (0 – 1) - GDP Density (GDP per square km) - 2010 Global Hunger Index Score by Severity - 0 – 100 points scale (0 = no hunger) - Combines 3 equally weighted categories:  Propo undernourished as percentage of population  Prevalence of underweight children under age 5  Mortality rate of children under age 5 - Good to have combined measures H: same time, lose precision of what you’re trying to express  Lots of children that die, but not of hunger Famine - Famine: widespread scarcity of food - Usually coupled w/malnut, epidemics, increased mortality - Great famines in history: - Hundred Years War: reduced pop of France by 2/3 - China’s Great Leap Forward (forced indusz) - Causes - Lack of food (not the most common reason) - Difficulties in distrib of food - Extreme poli condits  Tyrannical gov, warfare, delib starvation of enemy (civil wars esp)  1845 Irish Famine  Case of mass starvation, during this period Ireland cont export food to Eng cities  Lack of potatoes = just 1 aspect  Poli actions determ that food taken fr/starving region to where food would fetch a higher price  imp cause  1843 Famine in Bengal (Amartya Sen)  Poli cause: Brit gov cont ship food fr/Bengal  Once have truly free market + democracy = no longer have famines - Answer in this situation? - Should Canada send food?  No does not address root cause, have to disting b/w emergency aid (must send food) - China: didn’t lack delivery + redistrib mechanism to deal w/food shortages  Lacking = poli sys, famine cont w/out even being publically admitted  No mechanism to make it known outside of region affected - Conclusions - Most cases @nat levels: not caused by lack of food  b/c ppl not have access to food - Food security not matter of agricul produc only, but disposable income  Indian famines: food left production areas for cities where it fetched higher price - Best prevented by either protecting + subsidizing production/by create jobs (so ppl have $)  Subsidize produc: producing seeds + sent to poor areas 
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