Global Economic Issues

what i thought was really interesting about this article was the story about Pak Solhin. He used all of his land to build houses for his children, which left no area left for cultivation. He talked about how poor people barely get enough food to survive, while the rich get enough food to survive and get stronger which enables them to do more work and get even richer, so the poor get poorer and the rich get richer.

This real world example of a “poverty trap” really allowed me to visualize what people who live on less than $1 a day go through.

It’s not always being land locked that can cause a poverty trap, but even a lack of food as seen in this situation can cause a poverty trap as well

After reading Sachs and Collier it is hard for me to buy into Easterly’s notion that there is no such thing as the poverty trap. I also struggle with his notion that aid does more harm than good. Money makes money, and if there is little to no money to invest than countries cannot get out of poverty. Africa+ as Collier calls it, is stuck in my opinion. And without significant Western help it will never get out of poverty. Even though Easterly is only briefly mentioned I still feel confused by his solution that free markets and governments are a fix all. Does he simply want aid to stop? Even though some sources of aid are more useful than others I don’t buy into his idea that aid hurts countries. The exception of this would be money given directly to corrupt governments that use the donated funds to further suppress their people. And sure corrupt governments are an inherent risk when discussing aid, but that does not mean that aid should simply stop.
The rest of the article was unique look into the life of those ‘Bottom billion.’ I certainly agree with Daniel in that the story of Pak Solhin seemingly provided a real life example of how the poverty trap does indeed exist.
The example of India did not quite prove to me that people are starving because they would rather have a tv than food(Even though Oucha seems to think differently). For me the fact that nations with rising capital are consuming less food is not encouraging, like it seemed to be in the article. Once poeple who have never had any money begin to have disposable income, they are less likely to save and more likely to spend on things like tv’s and gadgets. In my opinion this lack of financial responsibility can sort of be seen as another layer to the poverty trap, if people dont prioritize money correctly in a developing nation they could once again slip back into extreme hunger and poverty. It is not really anyone’s fault that they do not have experience in handling money it is more just a result of their situations. I am not trying to talk down on anyone (after all I am about as bad with budgeting my money as you can get) but to me I think there is a little cause for concern. I certainly did not buy that there was no poverty trap because they found one or two families that have tv’s instead of dinner.

After reading the majority of this article I side with Chris on the basic concept behind the poverty trap. Although there are some examples of poor investments of money this does not mean that there is no poverty trap. I can imagine that when a family is down and out, depressed about the lack of food and inadequate living they have, they might be rather inclined to buy a tv to boost their moral rather than buying a bit more food each day. If they are surviving, why buy more food, a variable cost, when they could buy a tv, a fixed cost, and enjoy themselves more. Utilitarianism is the premise of micro-economics in my understanding, and if these people are receiving more utils from buying a tv than another bag of rice, who are we to tell them that they are making a poor investment?

On another portion of the topic, I would be very interested to see research on the health benefits of these impoverished people obtaining material objects such as tv’s or even the water pump wheels the kids spin on. It may not give any actual protein and calories to the people, but it gives hope, excitement and satisfaction, which are all foundations of a prosperous life. On the other hand, should they be working on these before food or after?

After reading both “The End of Poverty” and “The Bottom Billion” this article gives me a more up-to-date idea of just how poor our world truly is. William Easterly explains about the inexistence of a “poverty trap”, “when markets are free and the incentives are right, people can find ways to solve their problems”. However, my take on it is that yes, people can/dp find ways to solve their problems, but when you have a family and several mouths to feed this becomes a little more complicated.

Daniel makes a good point about Pak Solhin, the Indonesian man who has to provide food not only for himself, but for his family (of 11) as well. Solhin, who is 40, has to find enough work so that his family doesn’t starve and so he can keep his children in school. Yet, this isn’t a reality when farmers won’t hire a person because of inexperience or age. The “poverty trap” is a question of our world’s morality as people helping one another. The reason we have so many poor people is because of the restrictions people place on those who need to work to survive.

As a world, by simply providing the service of work and food could be enough to start eradicating some of these issues. “The idea that better nutrition would propel someone on the path to prosperity was almost surely very important at some point in history, and it may still be today.”

I believe this, although not entirely, could potentially alleviate a large amount of weight from those who are poor.

I found this article very fascinating. I really like the quote: “As Sen put it, ‘No substantial famine has ever occurred in any independent and democratic country with a relatively free press.'” It is true in the world today that we have plenty of food to go around. Technically, no one should be starving with the amount of food that is produced in the world. However, due to government corruption, often times people are robbed of food. Governments who do not have the best interests of their people at hand will not be concerned about making sure their nation is fed. This is why I am very impressed with India’s government even considering passing an act that would allow starving citizens to sue the government for not providing enough affordable food. I believe that every person does have a right to food; just as every person has a right to life, liberty and the pursuit of happiness because isn’t food a basic factor of these rights? Thus all governments should be held accountable if there is not enough food, or affordable food, present in their country.

Another point I found interesting was that low-class citizens often need a higher calorie intake than the rest of the population, especially in developing countries due to their labor-intensive jobs. Thus, if hunger-poverty traps really do exist, this would be a main cause of their formation.

Finally, I agree with the last part of the article that talked about how people in poverty will often chose to buy fatty and unhealthy diets. This is true in America as well. Many poor people in America today are obese because they chose to buy more fast-food and other fatty food items than the typical middle of upper class families. I believe this is due to the fact that they have less to enjoy in a day to day basis and so turn to food to get some pleasure out of life. It is hard to form habits that are based on a future that doesn’t seem likely to change anyway.

It is mind boggling to me to try and understand that individuals who were starving would not use the aid provided for them for food, but instead to buy a television or something similar. An interesting quote in the article is, “What if the poor aren’t starving, but choosing to spend their money on other priorities?” To me, food is the largest priority when I think of the basics of surviving. I do understand why people don’t put forth all of their money towards buying food that provides more calories but instead they buy food that tastes better. Everyone wants to improve their lifestyles and better tasting food is one of the first steps. I completely agree with this quote, “People tend to be suspicious of outsiders who tell them that they should change their diet.” These individuals have been eating the same way for centuries and for some unknown foreign scientist of NGO to come into a country and state that diets need to be changed, suspicion would be wide spread. At the end of the article, Oucha mbarbk joked that television is more important than food, however I believe that many of the poor believe this statement to be true. Priorities need to be rethought in order to make survival tactics a necessity.

I was fascinated by this article. Growing up in the Western world its hard to understand how there could be starvation. You hear that something like 30% of the US food supply is wasted each year and it seems so foolish when you know people are starving in the world. However, I’ve been to impoverished countries as well and it never really seemed that different to me. There is still food waste. And even the poorer areas of cities it does not seem as desperate as you might think (that’s not to say improvements can’t be made). After reading the article, it makes a lot of sense that starvation results from inefficient distribution. It also makes sense that the impoverished will not make investments in food if they don’t see immediate benefits. It’s easy to say that someone who is poor should spend their money on necessities, not things like TV. But I think if any of us were in those same circumstances we would do the same. If you can’t find a job and don’t have money to go out and entertain yourself, TV would almost be a necessity. I think poverty is all relative. To us, the caloric intake seems way too low. But for someone who was raised that way, it seems sufficient. Poor people have emotional needs aside from food and it makes sense that they wouldn’t spend their entire budget just to eat. From our perspective in the US, it’s easy to pass judgment. But frankly, we all buy stupid stuff. We shouldn’t have a double standard.

The problem I have with this article is that it does eliminate the fact that people are still living in total poverty. Though some people may in fact use their little money to buy televisions instead of food, a vast majority does not even have that opportunity. Some people may be poor and have a television but there are many people who do not have electricity and are therefore unable to have that choice. And just because they choose purchase better food doesn’t necessarily make the notion of a poverty trap false. People in the depression went to movies all the time. Its not about strictly being poor to some degree the psychology of being poor is much worse than actually being hungry. If an individual is unable to work or get food and remains totally marginalized, a television would provide a semblance of societal inclusion. And again I don’t think I can stress enough that regardless of how many ways there are to reevaluate poverty and spending among the poor the fact is that they are still poor and children are still hungry, which is something we should not allow if we can help it.

In my first sentence I meant to say it doesn’t eliminate. Sorry.

One sentence I found particularly interesting. Where people might not have enough to eat they might save up for a new TV instead. I saw this firsthand in the poor part of Cairo, Egypt (“old” cairo), and i saw haphazardly built crumbling housing units stacked on top of each other. But what I noticed was scores of satellites for home TV’s on top of every building. I think it is interesting, maybe not logical but it makes sense in a moral lift sense. When people can have enough money to buy a TV it perhaps temporarily gives them the illusion that they are not poor…

“What we’ve found is that the story of hunger, and of poverty more broadly, is far more complex than any one statistic or grand theory; it is a world where those without enough to eat may save up to buy a TV instead, where more money doesn’t necessarily translate into more food, and where making rice cheaper can sometimes even lead people to buy less rice.” I find this odd—people would rather watch television (by which they are entranced) than eat. Cheaper rice means less rice eaten? Something is wrong there.

“The local farmers decided not to cut wages, Pak Solhin told us, but to stop hiring workers instead. As a result, in the two months before we met him in 2008, he had not found a single day of agricultural labor. He was too weak for the most physical work, too inexperienced for more skilled labor, and, at 40, too old to be an apprentice. No one would hire him.” Why not—the cost of his labor and the value of his labor could be lower and higher (respectively) with a younger worker? Younger workers usually cost less and could work at the same production levels as older workers. As for the food levels Pak has consumed, I am thinking why the government does not (or has not) subsidized food prices.

“But as people get richer, they can buy more food and that extra food goes into building strength, allowing people to produce much more than they need to eat merely to stay alive. This creates a link between income today and income tomorrow: The very poor earn less than they need to be able to do significant work, but those who have enough to eat can work even more. There’s the poverty trap: The poor get poorer, and the rich get richer and eat even better, and get stronger and even richer, and the gap keeps increasing.” Why don’t the better off help those who are worse off? I’m thinking the better off do not have a reason to assist the worse off (no incentive). 2% of Egypt’s GDP as subsidies for poor people? I don’t think that’s enough for the economy.

“Currently, the Indian Parliament is debating a Right to Food Act, which would allow people to sue the government if they are starving.” Wait a moment. Allow me to be sarcastic for a moment. This is like our government debating a Right to Life Act, allowing people to sue the government if they are incompetent. (end sarcasm) I can’t believe the Indian government is allowing hungry people to sue them—why doesn’t the Indian government just give hungry people food in the first place?

This was an investigative approach towards poverty driven hunger that I had previously not thought about. It does seem odd on the surface that these individuals who are scraping by day by day to find enough food to fulfill their necessary daily caloric intake, are choosing to purchase more expensive, better-tasting food. Some also choose to purchase televisions or radios from money saved up over years. However, I think that this article only applies to a couple of poverty-stricken countries. Sub-Saharan African countries are undoubtedly not purchasing food that tastes “better.” Citizens are challenged every day to find food. They, most likely, do not even have an option of different kinds of food. The Indian Government cannot be sued for people going hungry if these people are not investing their money wisely into foods that serve the best purposes for sufficient caloric intake. I wonder if people understand the caloric values for the different foods. Perhaps an educational plan for citizens could help resolve this odd trend.

I am not surprised at all by the findings outlined in the article. People have unlimited wants and needs which generally require money to fulfill them. When people see even a slight increase in their wealth, they use that “extra” money to buy better items whether it be food or material possessions. I think that it is easy for people that aren’t poor to judge such actions and say that “they should be trying to increase their quantity of food and their caloric intake,” but these people are not used to having more food and/or money and since they are used to not having anything to eat…why not buy a TV while they have the money to!?

I have to agree with Roy about people buying TVs instead of food. During high school I went to Bali, Indonesia with my family. We stayed in a more rural part of the island, about a two hour drive from the city (which is overflowing with tourists and even has a Dunkin’ Donuts). During the drive we saw rice farms as well as a ton of houses that were smaller than the average dorm room, but you could see the glow from a tv through the windows. Each household had enough people that it seemed like it would be an uncomfortably tight fit. It is hard to judge whether these people had enough to eat, but everyone appeared to be very thin.

Over the time we were there it became apparent that most of the people around us could only afford rice and fish (if near the edge of the island). Occasionally they would get to eat chicken, but even then it was only because that particular chicken lost a cockfight. This is another indication that they cared a lot about entertainment in the form of TV and cockfights, and less about nutrition.

To continue Sarahs thought – people look to some sort of entertainment. In the Bali situation where tourism is present they may find side income and see these richer people coming in with the sole purpose of entertainment and pleasure. They strive to live more so than they already do. This applies to the article as well with the notion that rice and noodles are bland and the fish and meat give them something new. This is like the enterainment. You can only live blandly for so long especially when you know what else is out there. Any opportunity is great