The second article in Foreign Affairs' series on "The Future of Capitalism"
is "How Poverty Ends, The Many Paths to Progress - and Why they might not
continue." This article is written by Abhijit V. Banerjee and his former
student Esther Duflo (now his wife). Banerjee and Duflo also (along with
Milanovic in the previous article) associate poverty with Capitalism. I
think they should be two different subjects, but Foeign Affairs and the
writers off these two articles obviously do not.
Banerjee seems to be quite famous with all sorts of awards including a Nobel
Prize (along with his wife) and seems someone, even the worthiest, capable
of writing on the subject of poverty; which he subsumes under "economic
growth," but they write, "The bottom line is that the true ingredients of
persistent economic growth remain mysterious."
But while they don't know how to advance persistent economic growth, they do
know what "can be done to get rid of the most egregious sources of waste in
poor countries' economies and of suffering among their people. Children who
die of preventable diseases, schools where teachers do not show up, court
systems that take forever to adjudicate cases - all no doubt undercut
productivity and make life miserable. Fixes to such problems may not propel
countries to permanently faster growth, but they could dramatically improve
the welfare of their citizens."
Then in their penultimate paragraph they write, "Moreover, although no one
knows when the growth locomotive will start in a given country, if and when
it does, the poor will be more likely to hop on the train if they are in
decent health, can read and write, and can think beyond their immediate
circumstances. It may not be an accident that many of the winners of
globalization have been communist countries that invested heavily in the
human capital of their populations for ideological reasons (such as China
and Vietnam) or places that pursued similar policies because they were
threatened by communism (such as South Korea and Taiwan).
And in their final paragraph, they write, "The best bet, therefore for a
developing country such as India is to attempt to raise living standards
with the resources it already has: investing in education and health care,
improving the functioning of the courts and banks, and building better roads
and more livable cities. The same logic holds for policymakers in rich
countries, who should invest directly in raising living standards in poorer
countries. In the absence of a magic potion for development, the best way to
profoundly transform millions of lives is not to try in vain to boost
growth. It is to focus squarely on the thing that growth is supposed to
improve: the well-being of the poor."
Comment: Maybe I'll eventually quit quibbling over ill-defined connection
between Capitalism and Poverty, but not quite yet. Lenin would say that
the connection was obvious: because the capitalists mistreat the
proletarians in their nations, the proletarians will eventually rise up and
seize power. But neither Milinovic nor Banerjee and Duflo use Lenin's
argument, and the connection they must make, if it isn't Lenin's, isn't
obvious to me.
Also, while the work of Banerjee & Duflo is much admired, it would seem that
if they succeed as much as they hope, burgeoning populations hopping the
aforementioned train will by virtue of being very large numbers enhance the
ease with which some contagious diseases spread. We see at present the
difficulty of containing the caronavirus. How much more difficult will it
be if Banerjee and Duflo are as successful as they hope? I'm not making a
value judgment here - just observing that their goals, as defined by
themselves, seem incomplete and short-sighted.