The UN defines poverty as living on less than $1 a day.
Most people at ProgressiveU are aware of the UN Millennium development goals, so they are also aware of the definition of “poverty,” but at the same time it is hard to really understand this definition.
One dollar can buy different things in different places, just ask anyone who has traveled to the UK. When you get to England one dollar becomes roughly half a pound. You can’t even buy a coke for half a pound. If you take your dollar to China it becomes a little more than 7 RMB, a sum for which you can eat a filling meal or two if you stretch it. With this in mind it is difficult to think of exactly what $1 per day means.
But it is really much simpler than you think.
The UN definition of poverty adjusts for purchasing power parity. This means that with the UN’s adjustments you can buy the same things for a dollar everywhere, so one dollar equals one coke, four packets of ramen noodles, or half a pint of ice cream regardless of where you live.
Now try to imagine living on one dollar a day. Food expenses alone would be hard to handle; you would end up eating a lot of empty calories from ramen noodles and rice. That hardly counts as a balanced, nutritional diet. But wait, what would you do about shelter? You can’t pay rent or buy a house for $30 a month. If you are lucky you have a family hut that has been passed down to you, but you can’t afford to fix the roof when it leaks. If you are not so lucky you will end up as a squatter on someone else’s land, maybe live in a cardboard box. The other necessities need to be taken care of as well: water won’t come out of a tap and it won’t be clean, there is no plumbing in your box, and you still need clothing of some kind.
There is no saving for the poverty stricken, so illness and other catastrophes are usually fatal. Loans will only come from loan sharks who charge exorbitant interest rates and leave you practically enslaved.
It is still difficult to fathom such a state, especially as you sit at your computer in your heated dorm room, but maybe this has helped you to understand poverty a little more.
-m-
Your analysis fails to address what poverty means in various places. In the US, poverty is a difficult life. Things are structured (through things like minimum wage, the federal reserve, and the stock market) such that poverty proves difficult. However, in places where poverty is commonplace, it isn't so difficult. It is by no means a life of luxury, but the market is significantly 'dumbed down', meaning that the supply meets the demand, despite the low prices involved.
Sure, you might not be able to afford a car, but who is selling cars in an economy where no one can buy them? Instead, bikes are chief commodity. Sure you might not be able to afford electric or gas heating, but the wood industry is likely booming from the demand for stove heating. Different living standards just create different ways of life. Mass poverty isn't a problem because it isn't poverty, relatively speaking.
Of course, reconciling the differences in wealth in the world as a whole is a completely separate argument.
--Mike
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Adjusted for purchasing power parity. So yes, it does mean the same thing whether you are in Uganda, Iraq, Romania, China, Peru, or the US.
-m-
I think the point is that it means different things for people in different places. The effect of living in certain conditions are different depending on a variety of factors.
"Alliance - in international politics, the union of two thieves who have their hands so deeply inserted in each other's pockets that they cannot separately plunder a third."
Ambrose Bierce
What I'm saying is that just because people can buy a Coke for X amount of currency, doesn't mean that they will. What the market offers adjusts to meet demand, regardless of the value of the currency.
--Mike
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No they certainly won't buy a coke, but the market does tend to fail in certain places when demand and supply do not match. I was trying to put the UN definition of poverty into a more easily understandable terms for college students... Hence Ramen and Coke. And I did neglect subsistence farming as an option.
But when something adjusts for PPP it changes the worth of money so that it isn't just adjusted for currency exchange rates. They take a basket of goods and adjust so that the basket would cost the same amount everywhere, so it does account for differences in supply and demand... Not perfectly, but better than most alternatives.
-m-
But that's precisely what I'm saying! You can't change markets and expect value to remain the same. The utility that a hungry Cambodian would get from a banana (if utility were actually quanitifiable) vastly outweighs the value put on the banana by an American.
To a homeless person, $10 is a whole lot, but to Bill Gates it's nothing. Why? Because Bill Gates has lots of $10s.
--Mike
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Poverty is not a bad thing.
It just means you aren't rich. Being rich isn't a requirement for a happy life.
Freedom is.
Oppose those who would take away YOUR freedom for the sake of giving your money to other people under the guise of 'fighting poverty'
I agree being rich doesn't make you happy, and many poor people are happy... But I've never met someone who was happy and starving to death.
-m-