TP: Right. With such an extremely low poverty line, the Bank finds a mild decline in the number of poor people, which puts us on track toward achieving the 27 percent reduction in this number that the first Millennium Development Goal promises for the 1990-2015 period. While you talk about half the world's population being in dire straits, they typically speak in upbeat terms of the progress made in alleviating poverty. KB: You're an atypical voice among high-profile Ivy League academics. People are fighting quite hard over these rules—different countries and corporations are trying to influence this rulemaking process. At the time of publication, "46 percent of humankind live [d] below the World Bank's $2/day poverty line" and 43 percent of those people fell "below the World Bank's better-known $1/day poverty line." TP: The key insight here is organization. In our time, nearly all severe poverty could be eradicated at a cost to the affluent that is truly trivial. Now this mechanism works only for commodities that are cheaply tradable across national borders. TP: The World Bank is the monopoly provider of poverty data and, partly due to a leadership change there, the World Bank's reporting has been heavily on the rosy side since about 2000. So the World Bank's method of comparing and converting everything at general purchasing power parities into US dollars is highly distorting within an exercise whose purpose it is to determine whether households are or are not capable of meeting their basic consumption needs. Because hedge fund managers pay legislators to have this special perk—not cash delivered secretly in brown paper bags, but money given in bright daylight through official channels. So the policy prescriptions are much wider, right? In the end, the Tutsi resistance managed to overthrow the government—and then the successor government was asked to repay Rwanda's debt! Such a global order is unjust even if it also requires the affluent societies to ride to the rescue (pursuant to their duty of assistance) whenever worsening poverty threatens the well-orderedness of … To justify this a bit more, let me expand on the thought I just offered. Furthermore, we discuss poverty as human rights violations. My sense is that companies are better able to do this sort of holistic planning and continuous rethinking of how health impact can be realized most cost-effectively than bureaucracies. But I would stress that we should not think of poverty eradication as a matter of collecting money and giving it to the poor so much as of reforming the global rules that are disadvantaging the poor and making it impossible for them to fend for themselves. Unfortunately, the trend is going in the opposite direction. 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Ordinary people like you and me can achieve very little on their own. Countries compete in offering easy working conditions to their banks. We have to find ways of addressing the very clear moral problems arising from the WTO Treaty and the TRIPS agreement in particular. TP: It would surely be worth trying, and I wish this were politically feasible. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. As it happens, the Bank has actually applied its methodology with such a higher poverty line of $2.50 per person per day, in 2005 US dollars converted at PPPs, and found that the number of poor has increased in the 1990 to 2005 period. This is because the Bank converts US dollars at purchasing power parities, or PPPs, a kind of exchange rate that takes account of the prices of household consumption goods and services in the various countries. KB: This touches on some practical engagement and policies. This gives us a rough sense of how much the eradication of poverty would cost. The lower you set the IPL, the nicer-looking a trend you will find. 0000006732 00000 n The bottom half of humanity is living in severe poverty; not all of them are malnourished or severely deprived now, but they are extremely vulnerable to even small upsets in their income or in the prices they face of basic necessities, and when something like this happens, they can be thrown off kilter in terms of a disease of a family member or a change in food prices; anything like that can throw them into destitution. So I think one big improvement would be if we somehow made it cheaper and easier for developing countries to learn from the sad experience of some of the developed countries, and also from some of the positive experiences we have of building good transportation systems, like high-speed rail. Piecing together the current global record, we find that most of the current massive underfulfillment of human rights is more or less directly connected to Second, companies are actually much better than governments and other bureaucracies at organizing in a holistically efficient way the extremely complex path from the examination of molecules all the way to the delivery of medicines to patients. Box 208306 New Haven, CT 06520-8306 Connecticut Hall 344 College St. New Haven, CT 06511-6629 As I analyze in one chapter of my "World Poverty" book, dictatorial regimes often manage to keep themselves in power because they are recognized by foreigners as representing the state and its people, and therefore as entitled to sell the country's natural resources and to borrow money in its people's name. 1 Thomas Pogge: World Poverty and Human Rights: Cosmopolitan Responsibilities and Reforms. Social and Political Philosophy, Ethics and Moral Philosophy, Kant, Justice in Health Care. In the wake of irrefutably structural events like sudden surges in unemployment and food insecurity that have blighted the lives of even the "virtuous" individuals, do you see this as an opportunity to cultivate or reanimate people's institutional awareness? This includes all cases of extreme poverty, which according to the World Bank's scandalously narrow definition, are those who live on $1.25 a day or less. What I found is that in 88 poor countries for which we have data, in each and every one of the 88, the PPP for food shows that poor people can buy less food than you would expect from the PPP that the World Bank is using. Uses distinction between positive and nega-tive duties. Now—bearing in mind that, if such a household really spent all its money on food, it would have nothing left for clothing, shelter, medical care, water and other utilities—we can surely conclude that a higher poverty line is needed, one at least twice as high as the one preferred by the Bank. Nor does it work for services: though people could, in principle, cross national borders to reach places where their work is more highly rewarded, they are in fact prevented from doing so. This sounds like magic. This $2.50-a-day poverty line is not even typically talked about. KB: Let's talk more in detail about that, because your framework for understanding poverty is distinct from that of other philosophers. Once you recognize those two pretty undeniable facts—that these rules are made by human beings and that they have distributional effects—you naturally get to the responsibility question. KB: This is crucial, because in the midst of such immense misery, cheerleading for the status quo is only morally justifiable if, as Margaret Thatcher said, "there is no alternative." A dramatic example is Rwanda, which borrowed a lot of money. So there needs to be a successively worse undercounting over time for your point to apply to their assertion of poverty reduction. You say that as citizens of rich countries, you and I are responsible for this suffering and we should be working to minimize our role in their impoverishment. If the Health Impact Fund were to be instituted, a single company would be in charge of a medical product all the way from its conception to the health improvements realized by actual patients. Many prominent voices on global poverty, like New York University economist William Easterly or the British newsmagazine The Economist, blame kleptocratic regimes, endemic corruption and "bad government" for poverty's persistence in the third world. This will, in some cases, lead to compromises. See all articles by Thomas Pogge Thomas Pogge. For more on Thomas Pogge, visit his website. But then you can buy much more by way of services than you could buy with this PPP equivalent in the United States." After all, the industrialized world had to pollute like mad to achieve its poverty reductions. Let me respond by saying, first, that I don't disagree with the duty-to-help argument; it's just an argument that has been made, and made effectively, by Peter Singer, Peter Unger and others. The two sides of the problem are closely interdependent: because present procedures by design favor the affluent, the poor are being increasingly marginalized. But you say that we must scrutinize this and the international legal framework that gives such negotiations blanket approval. But that the prize is there is really not the fault of the insiders. The logistical challenges to resupplying all these outlets are enormous—and yet, the entire system works with incredible efficiency as is confirmed by the price of the product. Thomas does research in Social and Political Philosophy. We should help but are not causing harm if we don’t. Let me add that the Bank's entire methodology is flawed insofar as purchasing power parities are not a reasonable method for comparing households across countries or currencies. What is really nice about the Health Impact Fund is that it is a win-win, something that without much cost to anyone makes a lot of people better off. In the United States, for example, there are only two exceptions: banks have to report deposits they suspect to be related to either terrorism or drug trafficking. Originally from Germany, Thomas Pogge received a PhD in philosophy from Harvard in 1983. What is it and what are some of its general features? They create this disturbing fact that, if only you manage to bring a national territory under your physical control, then you will be recognized worldwide as its legitimate government: entitled to sell its people's natural resources, to borrow and sign treaties in their name, and entitled also to import the weapons you need to keep yourself in power. The resulting wealth in those countries has largely accrued into the hands of a relatively small group, while many, if not most, have languished during all these years of eight to nine percent growth. If we offer a prize, so to speak, to anyone who manages to bring a country under his physical control—namely, that they can then sell the country's resources and borrow in its name—then it's not surprising that generals or guerrilla movements will want to compete for this prize. And because the poor are so marginalized, they can exert little influence on institutional design decisions. '�. This is a positive (thus weak) duty. In exchange, innovators must of course renounce the usual rewards they are otherwise entitled to, namely the patent-protected markup on the price of their product. But who has the capacity and the incentives to bring change? Each powerful player, or coalition of players, will make concessions in areas where it has relatively less at stake in exchange for other such players making reciprocal concessions in other areas where it has relatively more at stake. The Chinese are becoming leaders in high-speed rail transport, but they have also added nearly 14 million new passenger cars in 2010. Global poverty can lead to many other tragic issues such as human trafficking. I have now strengthened my case by adding that the official PPP equivalent of $1.25 in poor countries actually buys a lot less food than $1.25 buys in the US. In poorer countries, the amount the Bank deems sufficient to escape poverty is much lower still. TP: The collective shortfall of the 3.08 billion people (47 percent of world population) who, in 2005, lived below $2.50 per day was $507 billion per annum, which indeed comes to about two-thirds of the present US military budget. UPS is another example where they are able to get the parcels to the most remote locations at an incredibly low price. It has to do with the fact that most foodstuffs are tradable commodities: basic foodstuffs, such as rice, flour and beans, can easily be conveyed across national borders and their prices will therefore roughly mirror the exchange rates among currencies. By avoiding these losses, the HIF reform can bring improvements all around—including for pharmaceutical innovators. It is perfectly consistent—and also true—to say that the world poverty problem today is smaller (relative to world population) than before and yet also a much graver injustice. Severe poverty is the greatest source of human misery today causing more suffering and deaths than all violent conflicts around the world combined. The first thing to appreciate here is that the poverty trend is very sensitive to how high or how low the poverty line is fixed. Drafts of domestic legislation must be published, debated and publicly voted on, which gives ample opportunities to civil society organizations and ordinary citizens to at least understand what's being proposed and to voice and to organize opposition before the decision is made. TP: Yes, indeed, these two are closely connected in both directions. First, the alternative proposal is not politically realistic in the United States and most other affluent countries with a substantial pharmaceutical industry. We do believe this, but that's only part of the point. The government complied, lest Rwanda be excluded from future borrowing. 3 (2004), p. 387. These pilots would allow us to demonstrate that we have a reliable health impact measurement methodology, and they would also show how innovators introduce and promote a product differently when they are differently incentivized. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Exemplifying the homo economicus paradigm, economists typically choose their research projects and hypotheses so as to promote their own careers, to maximize their lifetime income. It's a system that generates hundreds of billions of dollars in litigation costs and deadweight losses that HIF-registered medicines would sidestep. 0000000820 00000 n The reason is that I want to help achieve some actual progress in the design of the global institutional architecture. And the rupee amount will buy much more services in India than its PPP "equivalent" will buy in the US. But those who subsist on double that level would also be lifted out of poverty. For example, Transparency International puts out a list of the most corrupt states, and it always features easy targets like Chad, Somalia and Sudan. These large multinational corporations, often acting through their industry lobbies, also exert a powerful influence on the formulation of domestic rules and on their application—but their influence on supranational institutional design is even larger because it faces practically no opposition there. 0000046194 00000 n For more information about the Program, people working in and affiliated with the Program, and the Projects that our members and affiliates are engaged in, use the above links. KB: You're the architect of this initiative and have assembled some of the greatest minds in economics, public health, bioethics and government to support you. But in the case of medicines, green technologies and seeds in agriculture, such an alternative reward mechanism is fairly straightforward. You've taken The Economist to task and dismantled its portrayal of recent economic history. Date Written: December 16, 2008. We condemn not merely the feudal lords but we condemn the whole structure of rules that sustained feudalism. In 2008, he co-authored The Health Impact Fund, which lays out the plan to make life-saving medicines … 0000063117 00000 n We should condemn as unjust a global economic order that leads to ever-increasing economic disparities—provided this effect is foreseeable and provided it is also avoidable through some alternative institutional design that would foreseeably lead to much less poverty and inequality. It does not cost them anything to have the option and they wouldn't have to use it. The increase in the global average income cannot make up for this one-third loss in its income share that the poorest quarter experienced over a mere 17 years. Global Financial Integrity estimates that less-developed countries have lost at least $342 billion per annum in this way during the 2000 to 2008 period. 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