Most surprises in history are unpleasant surprises, but this news came as a pleasant shock even to the optimists. In 2000 the United Nations laid out eight Millennium Development Goals, their starting lines backdated to 1990.25 At the time, cynical observers of that underperforming organization dismissed the targets as aspirational boilerplate. Cut the global poverty rate in half, lifting a billion people out of poverty, in twenty-five years? Yeah, yeah. But the world reached the goal
Let’s not stop thinking about tomorrow. Though it’s always dangerous to extrapolate a historical curve, what happens when we try? If we align a ruler with the World Bank data in figure 8-4, we find that it crosses the
Of course that day is a ways off. Hundreds of millions of people remain in extreme poverty, and getting to zero will require a greater effort than just extrapolating along a ruler. Though the numbers are dwindling in countries like India and Indonesia, they are increasing in the poorest of the poor countries, like Congo, Haiti, and Sudan, and the last pockets of poverty will be the hardest to eliminate.29 Also, as we approach the goal we should move the goalposts, since not-so-extreme poverty is still poverty. In introducing the concept of progress I warned against confusing hard-won headway with a process that magically takes place by itself. The point of calling attention to progress is not self-congratulation but identifying the causes so we can do more of what works. And since we know that something has worked, it’s unnecessary to keep depicting the developing world as a basket case to shake people out of their apathy—with the danger that they will think that additional support would just be throwing money down a rat hole.30
So what
“In 1976,” Radelet writes, “Mao single-handedly and dramatically changed the direction of global poverty with one simple act: he died.”32 Though China’s rise is not exclusively responsible for the Great Convergence, the country’s sheer bulk is bound to move the totals around, and the explanations for its progress apply elsewhere. The death of Mao Zedong is emblematic of three of the major causes of the Great Convergence.
The first is the decline of communism (together with intrusive socialism). For reasons we have seen, market economies can generate wealth prodigiously while totalitarian planned economies impose scarcity, stagnation, and often famine. Market economies, in addition to reaping the benefits of specialization and providing incentives for people to produce things that other people want, solve the problem of coordinating the efforts of hundreds of millions of people by using prices to propagate information about need and availability far and wide, a computational problem that no planner is brilliant enough to solve from a central bureau.33 A shift from collectivization, centralized control, government monopolies, and suffocating permit bureaucracies (what in India was called “the license raj”) to open economies took place on a number of fronts beginning in the 1980s. They included Deng Xiaoping’s embrace of capitalism in China, the collapse of the Soviet Union and its domination of Eastern Europe, and the liberalization of the economies of India, Brazil, Vietnam, and other countries.