Angus Deaton on US poverty – E pur si muove!

It is certainly welcome news to be able to write a positive follow up. Without mentioning either Adam Smith or neo-classical economics by name, Deaton  has put a huge dagger into their backs in an op-ed article in New York Times (Note 1).  He categorically states ‘…it is time to stop thinking that only non-Americans are truly poor.’ Trickle down and work incentives simply do not prevent extreme poverty and if they do not prevent it in US they cannot clearly prevent it in any other country.  As we discussed in an earlier blog (Note 2) the idea that there is no overlap in incomes between African countries, specifically Tanzania, and US was absurd and Deaton emphasises that fact. This is a welcome step. The weekly ‘The Economist’  still remains firmly in public denial.

Deaton goes on to show some shocking comparisons .. ‘   …. and there are places — the Mississippi Delta and much of Appalachia — where life expectancy is lower than in Bangladesh and Vietnam’.

When it comes to ‘absolute poverty’ he uses an amended measure that seeks to capture the environmental and social differences between US and developing countries. This increases the number of absolutely poor Americans from 3.3 million to 5.3 million. He writes:

‘ …there are 5.3 million Americans who are absolutely poor by global standards. This is a small number compared with the one for India, for example, but it is more than in Sierra Leone (3.2 million) or Nepal (2.5 million), about the same as in Senegal (5.3 million) and only one-third less than in Angola (7.4 million). Pakistan (12.7 million) has twice as many poor people as the United States, and Ethiopia about four times as many..’

Thankfully there are few invidious comparisons with  poor US Blacks (as if they could play any causative role!) as was suggested in an earlier paper we discussed.

Deaton refers favourably to Edin and Shaeffer. Yet  in their book ($2 a day: Living on almost nothing in America’) they suggested that South African graduates would happily work on US plantations  for $8 an hour as they  would earn more in a week than they would in a year in South Africa. This absurd claim (it implies they live on $1.33 a day in South Africa!) in a work by Princeton scholars thereby continues the myth repeated by The Economist that US poor are better off than well off Africans! (Note 4) Fortunately when challenged Kathryn Edin and Luke Shaeffer  promised to remove this fictitious absurdity from the next edition. (Note 5)

Deaton draws some policy implications from this new found recognition which we will dissect in a subsequent blog.

If Deaton’s piece in New York Times can start the process of putting to bed Adam Smith’s nonsense about poor people in England being better off than the richest people in Africa and its successor myths substituting US for England then all one can say is : About time!

 

 

NOTES

  1. https://www.nytimes.com/2018/01/24/opinion/poverty-united-states.html
    poverty in us – deaton 24jan18
  2. https://african-century.org/the-economist-purveyors-of-fake-news-and-false-information/
  3. https://african-century.org/deaton-case-sea-of-despair-revisited/
  4. How on earth would anyone  get  a visa to work on US plantations at such low wages? In any case once armed with a visa would not any immigrant head for a city with known fellow countrymen who would inevitably point them in the direction of better work/life opportunities available anywhere but Mississippi!
  5. Luke Shaeffer wrote to me: ‘We appreciate you catching this and will definitely revise in the next addition. Since this pervasive myth is part of what our work seeks to counteract, in particular.’