by Jason Hickel
The deeper I dug, the more I realised that the reason poverty persisted in Swaziland had quite a lot to do with matters that lay beyond Swaziland’s borders. It gradually became clear that the global economic system was organised in such a way as to make meaningful development nearly impossible. These findings troubled me. But when I pointed them out to one of World Vision’s managers, I was told that they were too ‘political’; it wasn’t World Vision’s job to think about things like pharmaceutical patents or international trade rules or debt. If we started to raise those issues, I was told, we would lose our funding before the year was over; after all, the global system of patents, trade and debt was what made some of our donors rich enough to give to charity in the first place. Better to shut up about it: stick with the sponsor-a-child programme and don’t rock the boat.
Frustrated and disillusioned, I left World Vision and went back to studying, determined to learn everything I could about the deeper structural determinants of poverty – not just in Swaziland, but across the global South. I needed to understand why so much of the world continues to live in grinding poverty, despite decades of ‘development’, while a few countries enjoy almost unimaginable wealth.
What I learned along the way is that the story we’ve been told about rich countries and poor countries isn’t exactly true. In fact, the narrative we’re familiar with is almost the exact opposite of reality. There is a very different story out there, if we are willing to listen to it. It will completely change the way we think about the world. It will change the way we think about why poverty exists. It will change the way we think about progress. It will even change the way we think about our own civilisation, about our everyday lifestyles, and about what the world should look like in the future.
Anthropologists tell us that when the structure of a core myth begins to change, everything else about society changes around it, and fresh new possibilities open up that weren’t even thinkable before. When myths fall apart, revolutions happen.
The Myth Begins to Crumble
One of the reasons that the development story has been so compelling to people is that it has at its core a narrative of success – a bit of heartening good news in a world full of bad. Thanks to the generous aid of rich countries, the story goes, we have made remarkable strides in our fight against global poverty, and human want will soon be relegated to the dustbin of history. This hopeful story has inspired people for many decades and won the development industry millions of eager recruits. But in recent years public enthusiasm seems to have waned; people are beginning to pack away the streamers and quietly exit the party. Development agencies have produced report after report of hand-wringing analysis about the fact that people no longer believe that development is working. Drawing on survey data, the UK development umbrella group Bond recently reported that ‘efforts to eradicate poverty appear to many members of the public to have failed, and scepticism about the effectiveness of aid and global development initiatives has risen’.
Development agencies find this trend difficult to understand. As far as they’re concerned, development has been an outstanding success, scoring improvements in areas like child and maternal mortality and inching us towards a world without poverty. And indeed there have been some impressive achievements. For example, the number of children dying from preventable causes has declined from 17 million in 1990 to less than 8 million in 2013. And the likelihood of mothers dying during childbirth has declined by 47 per cent during the same period. These statistics are certainly worth celebrating. But the development industry wants the public to believe that these gains are tantamount to the overall success of the development project, and the public just aren’t buying it. There may be some small wins around the edges, they feel, but on the whole things don’t appear to be getting much better, and may even be getting worse. The development industry has repeatedly failed to deliver on its grand promises to End World Hunger or Make Poverty History – so why give them any more money? Why let them encourage false hope?
And they’re right. Take hunger, for example. In 1974, at the first UN Food Summit in Rome, US Secretary of State Henry Kissinger famously promised that hunger would be eradicated within a decade. At the time there were an estimated 460 million hungry people in the world. But instead of disappearing, hunger got steadily worse. Today there are about 800 million hungry people, even according to the most conservative measures. More realistic estimates put the figure at around 2 billion – nearly a third of all humanity. It is hard to imagine a greater symbol of failure than rising hunger, especially given that we already produce more than enough food each year to feed all 7 billion of the world’s people, with plenty left over for another 3 billion.
What about poverty? For many years, the development industry has told us that absolute poverty has been steadily declining. In 2015, the United Nations published the final report of the Millennium Development Goals – the world’s first major public commitment to reduce poverty – claiming that the poverty rate had been cut in half since 1990. This official good-news narrative ricocheted through the media and was repeated endlessly by NGOs. But it is very misleading. First, almost all of the gains against poverty have happened in one place, China. Second, the good-news story relies on proportions instead of absolute numbers. If we look at absolute numbers – the original metric by which the world’s governments agreed to measure progress – we see that the poverty headcount is exactly the same now as it was when measurements began back in 1981, at about 1 billion. There has been no improvement over thirty-five years.
And that’s according to the lowest possible poverty line. In reality, the picture is even worse. The standard poverty measure counts the number of people who live on less than a dollar a day. But in many global South countries a dollar a day is simply not adequate for human existence, to say nothing of human dignity. Many scholars are now saying that people need about four times that in order to have a decent shot at surviving until their fifth birthday, having enough food to eat and reaching normal life expectancy. So what would happen if we measured global poverty at this more realistic level? We would see a total poverty headcount of about 4.3 billion people. That’s more than four times what the United Nations would have us believe, and more than 60 per cent of humanity. We would also see that poverty has become worse over time, with more than 1 billion people added to the ranks of the poor since 1981. Imagine the entire population of the United States and then triple it. That’s how much global poverty has grown over the past few decades. These numbers represent almost unimaginable human suffering.
And all the while, inequality has been exploding. In 1960, at the end of colonialism, per capita income in the richest country was thirty-two times higher than in the poorest country. That’s a big gap. The development industry told us that the gap would narrow, but it didn’t. On the contrary, over the next four decades the gap more than quadrupled: by 2000, the ratio was 134 to 1. We can see the same pattern if we take a regional view. The gap between the United States (the world’s dominant power) and Latin America, sub-Saharan Africa, South Asia and the developing countries of the Middle East and North Africa has roughly tripled between 1960 and today. This is hardly a tale of ‘catching up’. And of course global inequality is even worse at the level of individuals. In early 2014, Oxfam reported that the richest eighty-five people had come to accumulate more wealth than the poorest 50 per cent of the world’s population, or 3.6 billion people. The following year things had already become worse – and so too the year after that. And in early 2017, as the World Economic Forum met in Davos, Oxfam announced that the richest eight people had as much wealth as the poorest 3.6 billion.
It would be difficult to overstate how devastating these facts are to the success narrative that the development industry seeks to propagate. No story can survive very long when it runs so obviously against the grain of reality. Eventually something has to give.
The industry is scrambling to respond to this existential crisis. NGOs, watching their
donor base recede, are working around the clock to turn the tide of defection. Many of them have hired expensive public relations agencies to help them combat negative perceptions and get people back on board with the old story. The stakes are high, for if the story of development collapses, so too will our certainties about the present order of the global economy. If people begin to accept that, despite many decades of development, poverty has been getting worse rather than better, and the divide between rich and poor countries is growing rather than closing, then it will become clear to all that there is something fundamentally wrong with our economic system – that it is failing the majority of humanity and urgently needs to be changed. The official success story has helped keep people on board with our existing system for a long time. If that story falls apart, so too will their consent.
Why Are Poor Countries Poor?
When I first started teaching at the University of Virginia in 2005, I would begin my classes each term by asking students to brainstorm answers to the question: Why are poor countries poor? Their responses were more or less the same each year. You can probably guess them. There were always a few who thought it had something to do with people being lazy, having too many children or holding ‘backwards’ cultural values. Others guessed that it had to do with corruption or bad governance or poor institutions; or perhaps with environmental problems like poor soils unsuited to productive farming and climates that incubate tropical diseases. And some believed that poor countries were poor because they just were. Poor countries are just naturally poor, they assumed, and no one is really to blame for it. After all, poverty is the normal first stage of development. Poor countries are like children; they just haven’t grown up yet. They haven’t developed.
It is a line of thinking that comes straight out of Truman’s speech. After all, the story that he spun into being calls us to see the countries of the world as a series of unconnected individuals, like runners on a track racing in their own separate lanes. Some runners are behind, others are ahead; some runners are fast, others are slow. Maybe it has to do with institutions or governance or climate – but regardless of the reason, the important thing is that they are each responsible for their own achievement. So if rich countries are rich, it’s down to their own talent and hard work. If poor countries are poor, they have no one to blame but themselves. This approach encourages us to think with a kind of ‘methodological nationalism’ – to analyse the fate of each nation without ever looking beyond its borders.
It was a somewhat strange move on Truman’s part. By casting the fates of poor countries and rich countries as separate and unconnected, his story ignored the obvious relationships between them. It airbrushed away the long and fraught history of entanglement between the West and the Rest, along with the political interests at stake. Truman wasn’t ignorant of that history. He knew that the United States had been violently intervening in Latin American countries since the 19th century in order to secure access to the continent’s raw materials. Indeed, the US military was invading and occupying states like Honduras and Cuba even as late as the 1920s and 1930s – during Truman’s own career – at the behest of American banana and sugar companies.
And of course, European powers had been controlling vast regions of the South since as early as 1492. Indeed, Europe’s Industrial Revolution was only possible because of the resources they extracted from their colonies. The gold and silver they siphoned out of the mountains of Latin America not only provided capital for industrial investment; it also allowed them to buy land-intensive goods from the East, which freed them to transfer their own labour power from agriculture to industry. Later, they came to rely on sugar and cotton – produced by enslaved Africans – that was shipped in from their colonies in the New World, grain from colonial India and natural resources from colonial Africa, all of which provided the energy and raw materials they needed to secure their industrial dominance. Europe’s development couldn’t have happened without colonial loot.
But it came with devastating consequences for the colonies. The plunder of Latin America left 70 million indigenous people dead in its wake. In India, 30 million died of famine under British rule. Average living standards in India and China, which had been on a par with Britain before the colonial period, collapsed. So too did their share of world GDP, falling from 65 per cent to 10 per cent, while Europe’s share tripled. And mass poverty became an issue for the first time in history, as European capitalism – driven by the imperatives of growth and profit – prised people off their land and destroyed their capacity for self-sufficient subsistence. Development for some meant underdevelopment for others. But all of this was carefully erased from the story that Truman handed down.
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Point Four was originally articulated for Western audiences – it explained global inequality in a way that absolved Western nations of any culpability. But during the 1950s and 1960s the governments of the United States, Britain and France realised that it could have power beyond their borders as well, and they began to wield it as a weapon in their foreign policy arsenal.
They were worried about the progressive ideas that were bubbling up across the global South in the aftermath of colonialism. The leaders of the new independent nations were rejecting Truman’s story about global inequality. Drawing on insights from thinkers such as Karl Marx, Aimé Césaire and Mahatma Gandhi, they pointed out that underdevelopment in the global South was not a natural condition, but a consequence of the way Western powers had organised the world system over hundreds of years. They wanted to change the rules of the global economy to make it fairer for the world’s majority. They wanted to stop foreign states and corporations from plundering their resources, to take control of their own abundant raw materials and to build their own industries without Western interference. In short, they wanted justice – and they saw this as a basic precondition for development.
As far as the Western powers were concerned, this was a dangerous movement that had to be stopped, for it threatened to disrupt their economic dominance. They needed a way to defuse the anger of the people. And they found it in the work of American economist Walt Whitman Rostow. Rostow – an academic who moonlighted as a foreign policy adviser to President Dwight Eisenhower – argued that underdevelopment was not a political problem, but a technical one. It had nothing at all to do with colonialism or Western intervention, but rather to do with internal problems. If poor countries wanted to develop, all they needed to do was accept Western aid and advice, implement free-market policies and follow the West’s path to ‘modernisation’. By telling a story of poverty that focused on domestic policies, Rostow’s theory not only sought to pull people’s attention away from the unfairness of the global economic system, it erased that system from view.
Rostow published his theory in 1960 in The Stages of Economic Growth. He advertised the book as a ‘non-communist manifesto’ and it quickly became popular at the highest levels of policy in the US government. During the 1960s and 1970s, the government peddled Rostow’s theory across the global South as a containment strategy – a way of depoliticising the question of global inequality. It proved to be such a promising tool that President Kennedy hired Rostow into a senior role at the US State Department, and President Johnson later promoted him to national security advisor. Following Truman’s lead, Rostow turned the development story into a public-relations exercise, although this time it was targeted not only at American ears, but also at the rest of the world.
However, Rostow’s story failed to work as planned. Across the global South, newly independent countries were ignoring US advice and pursuing their own development agenda, building their economies with protectionist and redistributionist policies – trade tariffs, subsidies and social spending on healthcare and education. And it was working brilliantly. From the 1950s through the 1970s, incomes were growing, poverty rates were falling and the divide between rich and poor countries began to close for the first time in history. And we shouldn’t be surprised; after all, global So
uth countries were using the exact same policies that Western countries had used during their own periods of economic consolidation.
The United States, Britain, France and other Western powers were not pleased with these developments. The policies that global South governments were rolling out undermined the profits of Western corporations, their access to cheap labour and resources, and their geopolitical interests. In response, they intervened co-vertly to overthrow dozens of democratically elected leaders across the South, replacing them with dictators friendly to Western economic interests who were then propped up with aid. For anyone who was paying attention, these coups gave the lie to the story told by figures like Truman and Rostow, and proved the point that the leaders of the global South had been trying to get across all along. Indeed, Western-backed coups were being carried out even as early as the 1950s – including in Iran and Guatemala – while Rostow was busy writing his book. Close as he was to the Eisenhower administration, which perpetrated those first coups, Rostow knew full well what was going on. Indeed, he may have been involved in the US-backed coup against the leader of Brazil in the 1960s, which took place during his tenure in the State Department.
Yet despite these attacks the South was still rising and continuing to push for economic justice. In the halls of the United Nations, governments of the South argued for a fairer international order, and they were succeeding. Given the new rules of global democracy, the North seemed powerless to stop the rise of the South. But in the early 1980s that suddenly changed. The United States and Western Europe discovered they could use their power as creditors to dictate economic policy to indebted countries in the South, effectively governing them by remote control, without the need for bloody interventions. Leveraging debt, they imposed ‘structural adjustment programmes’ that reversed all the economic reforms that global South countries had painstakingly enacted. In the process, they went so far as to ban the very policies that they had used for their own development, effectively kicking away the ladder to success.
