Escaping from Hunger, Pauperism and Inequality:  Growing Wealth in Freedom or Re-impoverishing Everybody in Captivity?

 

 

 

The last 260 years have shown that the only way to escape from hunger, premature mortality, extreme poverty and inequality, unfortunately gradually, is producing enough wealth through freedom and market economy. In 83 years, totalitarian central planning socialism only has been able to force, unhappily in captivity, a quick social setback to a generalized equity into a huge poverty class level, with the most sophisticated and less transparent mechanism of exploitation and inequality of all the human history. 

 

This article discusses briefly how the human development dilemma faced today by more than 150 developing nations, is easier to face in the 21^st century than in the 20^th century, with all the evidence accumulated. Let us examine the historical facts and main theories:

 

World’s human development from 100,000 BC to 1750: The Malthusian Trap.  

  

World’s human development of egalitarian hunter-gatherers societies from 100,000 BC (Stone Age) until the more unequal settled-agrarian societies from 10,000 BC to 1750 was very slow. Most people survived practically as animals in ignorance, famines, epidemics, hostile environments, food, housing and basics’ shortages, misery, lack of liberties, despotic rulers, local and regional wars, into the Thomas Malthus’ poverty trap.

 

In 1750 Europe and North America, living levels were slightly less poor than in India, China, and Japan, where most people lived poorer that the cavemen. Then, practically everybody, almost 99% of people, was poorest and oppressed, while only 1% was rich. Using the Gini index, inequality tended to the unit (1), where few people owned everything.

 

World’s human development from 1750 to 2010: The Great Divergence.

 

Since 1750, the West accelerated its self-sustainable socioeconomic, civil, and political growth based on individual liberties and market economy. An almost global liberalization spontaneously spread information, industrialization, urbanization, enough food, housing, basics, wealth, technological-scientific progress, democracy, egalitarianism, international trade and investment without precedent. This growth was associated with an expanding middle class coming from the rich but mostly from the falling but also improving the poor class. From 1850 to 1900, Australia-New Zealand and Japan hastened their development.

 

Adam Smith in “The Wealth of Nations”, 1776, said that people are the same everywhere in their material preferences and aspirations. They behave differently only because of differences in incentives. Given the right incentives --low tax rates on earnings, security of property and of the person, free markets in goods and labor— growth is guarantee. The long Malthusian night persisted because of the inability of all societies before 1750 to create such institutions and incentives. Smith urged governments to allow individuals to compete within a free market in order to produce fair prices and maximum social benefits.

 

In a fourth of millennium of real democratic capitalism, the world’s population improved and benefited from increased nutrition, housing, sanitation, expanded information, liberties, rights, transparency, goods, services, and wider income distribution.

 

The world population saw increased education, health, welfare, and other living levels. Population grew eight fold, urbanization enlarged twenty-four fold, literacy improved sixteen fold, gross domestic product (GDP) percapita increased ten fold, and longevity lengthened three fold. Infant-mortality decreased seven fold, birth rate went down about three fold, and death rate descended four fold. Most of these gains occurred in the 1900s, due to a remarkable reduction in inequalities with regard to freedoms, education, health, life, and wealth distribution between the lower classes and the medium and upper classes.  

 

In 2005, of the world’s 6.3 billion people, about 60% have escaped from moderate and extreme poverty, with the greatest increase of living levels occurring in those remaining in the poor class, in relation to the middle and upper classes, which increased them, but exhibited less improvement. Moreover, nearly 50% of the people no longer live in closed repressive systems.

 

In 2005, the world’s most poverty stratum consisted of 1.52 billion people in moderate poverty (daily income between US$1.00-2.00) and 1 billion-people in extreme poverty (daily income less than US$1.00). These poorest still live much as their ancestors did in 1750, surviving in the poorest villages and slums of less developed and poor countries.

 

Why and how did the Great Divergence between countries happened? 

  

Between 1750 and 1900, the UK and three-dozen countries (many former-colonies in North America and Oceania), quickly industrialized and “modernized” while most of the world’s countries lagged behind with a gap in income from 4:1 to 20:1. The main causes of the lag were geographic, cultural-anthropologic and socioeconomic in nature, but lack of liberty to individual thought, initiative and creation of agro-industrial scientific-technologies, along with primitive political structures, autarkic, protectionist policies, lack of commercial incentives, late colonialism and slavery, inefficient feudal and democratic capitalism, warlordism, corruption, and dictatorships, were important too.

 

In addition, it seems that most cultural values of the more fertile European upper classes in the last millennia, where hard work was essential were transmitted through many generations downward in the social scale, perhaps even genetically. This created a middle class which made possible the boost of modern development in European countries, as well as in their former colonies, where they substituted the native population, working with their hands the land and factories, as in North America and Australia-New Zealand. 

 

Liberalization, industrialization and urbanization were awkwardly for those workers, but labor unions and social democrat parties helped humanized their work. In the 1900s, these continued along with globalization of environment degradation, war, ideological subversion and terrorism. New and evolving epidemics spread by easy and rapid transportation and tropicalization of climate, threaten the population health worldwide.

 

A critical fact was that whereas the favored high-income countries reduced gradually the poorest and inequalities within its populations, in most low-income countries, those poorest and inequalities tended to increase, so Western modern values seem decisive.

 

Influence of socialism in Russia and developing world from 1917 to 1989.

 

From the Communist Manifesto of Karl Marx in 1848 to the post-World War I period, socialists used to recommend substitute capitalism for socialism, on the ground that it would liberate the restrained productive forces by capitalism, multiplying productivity and bringing unprecedented material wealth to everybody in the way to the fairest communism. Their steps were violent revolution, chaos, dictatorship, and captivity order. 

 

In 1902, Vladimir Lenin, stated that the socialist revolution could not be carried out in daylight, but would instead require a secretive vanguard of professionals under authoritarian leadership, as nucleus of the “proletarian dictatorship”. In 1917, he supplemented Marx’s theory, with the “theory of uneven development” of the capitalist system, and that Russia as the “weakest link in the imperialistic chain”, should initiate the world revolution, refocusing revolutionary expectations on less developed countries too.

 

Russia, the fifth-largest industrialized world power in 1917 became socialist and expanded in the USSR Empire, suffered an exceptional setback and re-impoverishment of 99% of its people. Totalitarian Russian socialism, Italian fascism and German Nazism, retarded the spontaneous globalization of the self-sustained civil and political freedoms and socioeconomic growth of most developed and developing countries, contributing to re-tyrannize and re-impoverish the whole world again in the twentieth-century. Russian troops and intelligence imposed socialist dictatorships in Eurasia, and in former colonies through socialist parties with massive misinformation, funds and arms, recruiting and training autocratic chiefs in Asia, Africa, the Caribbean, Latin America, Middle East, and Asia-Oceania.

 

Many newly independent parts of the poor Sub-Saharan Africa were far richer and better developed than the nations that would later become the East-Asian tigers. For instance, in 1957, Ghana, Mozambique and Angola's GDP percapita were equivalent to South Korea's, yet today, they are one twelfth that of South Korea's. The imperial Russian-strategies stifled their development, as in many other developing countries worldwide.

  

Russian socialism preserved some capitalist social trends while halted others.

 

Socialism developed since 1917 a semi-autarchic USSR, little affected by the world economic crisis of 1929. This originated a widespread discredit of democratic market system, and a mistaken conclusion that this system increased the number of deprived, while the totalitarian central planning system was reducing them. Then, socialism looked good, but after did not work in any country, even in the highly developed Germany.

 

As predicted since the 1920s, the artificial market of the experimenting socialist central planner can never generate rational prices because of insufficient incentives or profits, and “market socialism” was modeled in 1936. In the post-World War II era, Joseph Tito conscious of this, inspired totalitarian worker-managed market socialism for Yugoslavia.

 

Then, Joseph Stalin changed his tactics. He declared that the Russian worker, besides being educated and healthy was happier than the American worker, in spite of the fact that his standard of living was much lower; the knowledge that he lives under a fair social system compensates by far for all his material hardships. He even went so far as to create an imaginary paradisiacal internal world in his people, secluded by isolation from reality, and a haughty indifference to material wellbeing; but not in his traveling and opulent bureaucracy in silence.

 

Stalin also claimed other social achievements of the Russians in relation to the misery distributed. For example, that before the socialist revolution, the rich had more food, housing, wealth, and the poor had less. This statement is, of course, indisputable, but it leaves unanswered how a society in which virtually everyone is poor is preferable to one in which some people are poor, others are middle class, and still others are rich.

 

Stalin concealed that to make the workers more educated (and indoctrinated) and healthy (only physically), highly repressive measures were necessary, which made them mentally and socially ill. Some of  them were: suppression of all individual freedoms (included what to read and write); rationing of  the scarce food, housing, and everything, returning in the most subtle way, to the old world inequality percents in 1750: 99% poor people; 1% rich bureaucrats; and enslavement of teachers, physicians, engineers, scientists, and all university professionals.

 

In 1961, Nikita Khrushchev promised the Russians to reach the US production levels and standards of livings in the 1980s. However, what Russia saw then was the disintegration of its USSR Empire, in spite of all the relative fairness that the socialist system promoted.

 

Totalitarian socialist experiment in the richest developed Germany 1945-1989.

 

Analyzing the dynamics of the reunification of East and West Germany, one of the most developed countries in the world since the 19^th century, can be understood well the failure of all the totalitarian socialism theories and models up to date, apparently more humane.

 

From 1945 to the collapse in 1989 of the Berlin Wall (built in 1961), the world saw a captive East Germany, with a highly educated and physically healthy workforce, but mentally and socially ill, due to lack of individual freedoms, setback in income, consumption and lifestyles (even with Russian subsidy), with unstoppable emigration to the less “fair” West Germany.

 

The German reunification was under a social democrat market economy, not totalitarian or market socialism. In 1990, began a massive emigration from East to West. Still in 2009, East Germans from 16 to 30 years continue a fluent emigration to the West, due to the still East setback in infra- and super-structure, in spite of 20-years of the former West huge investments in the East.

 

It is unquestionable that in the first moments, the totalitarian forced egalitarianism within 99% of the people is a narcotic that immobilizes the stress caused by the exclusive poorest social status of the less-qualified workers and non-workers, while the opulence of the 1% party bureaucracy is very subtle hidden. However, in the end, the educated generations of workers under the totalitarian socialism reject it, because of the inequality in individual freedoms and living levels of the people with regard to those of the leaders. 

 

Totalitarian socialist experiment in the poorest developing China 1949-2010.

 

Since 1949, Mao Zedong promoted in the behind China, a totalitarian centrally planned command industrialization and rural-agricultural development, which increased instruction and physical health, but with famines and pauperism, into a neo-Malthusian Trap.

 

Deng Xiaoping changed in 1978 to Tito’s totalitarian market socialism approach, discarded in the late 1980s in Hungary, Czechoslovakia and Yugoslavia due to the captivity and inefficiency. He rejected the Maoist tendency to forswear the technological trappings of the West (including soft technology in the form of social relationships), and embraced the idea that “modernity” required copying many of the traits of the industrialized nations. China’s party leaders are experimenting this only in the Southeast coast, with ferrous repression of individual freedoms, leaving the Northwest and Central regions poorest and abandoned to the unsuccessful central planning, because they are afraid to lose the political power, if liberate the entire country.   

The China’s totalitarian socialist market economy combines substantial state ownership of large and key industries and business with private enterprise, where both forms of ownership operate in a free-pricing market environment, but controlled by central planning. With it, the socialist leaders hope to maintain (since 1949) its political power forever. Its people is paying high social costs resisting: lack of individual freedoms and rights, specially of information about the free world; monarchy of communist tyrants, owners of all state and most continental and overseas private industries and businesses; and setback to the world inequality figures in 1750: 99% poor people; 1% rich leaders.

In the measure that the new Chinese generations are more educated and part of increasing middle and affluent classes, it can be predicted that they will opt to develop its nation in freedom instead of in captivity, with a social market economy as most of the free world.

 

Sub-Saharan Africa Millennium Villages Projects 2004-2010.

 

Many developing countries’ populations still show patterns of subsistence lifestyles and living levels of settled-agrarian and/or forager societies (between 100,000 BC and 1750), mixed with advances from industrial societies, but rejecting modern values, freedoms, rights, hard work styles, and socioeconomic growth yet. Therefore, without modernizing integrally their societies, no education and no healthcare will improve their handicapped and unhealthy living standards of generalized extreme poverty with equity at the bottom.

 

The Millennium Villages are based on a single powerful idea: impoverished villages can transform themselves and meet the Millennium Development Goals by 2015, if they are empowered with proven, powerful, practical technologies. It is simply a "bottom up" approach to lifting villages in developing countries out of the poverty trap that confines more than one billion people worldwide. 

 

The concept? Doing all of it at once. Goals can be achieved by bundling critical yet straightforward solutions in a comprehensive investment strategy and working directly with the poorest of the poor. By investing in health, food production, education, access to clean water, and essential infrastructure, these community-led interventions will enable impoverished villages to escape extreme poverty once and for all. Once these communities get a foothold on the bottom rung of the development ladder, they can propel themselves on a path of self-sustaining economic growth.

 

The concept was developed by a team of scientific experts at The Earth Institute at Columbia University and the UN Millennium Project. There are more than 80 Millennium Villages operating or planned in ten different countries in Africa: Ethiopia, Ghana, Kenya, Malawi, Mali, Nigeria, Rwanda, Senegal, Tanzania and Uganda.

 

Conclusions

 

In prehistory and most history until the 1750s, human has evolved from the animal natural freedom and economy, to the human captivity and economy, with a stagnated absolute equity at extreme poverty subsistence level due to the Malthusian Trap.  

 

Modern human development since the 1750s has produced increasing human freedoms, education, health, affluence, and equality, with a growing relative (average) equity at a middle degree of affluence, in three-dozen favored developed countries with democratic capitalist system, but starting a Great Divergence with about 150 developing countries.

 

In 1917, totalitarian socialism, a theoretically more humane way to escape from inequality in captivity was experimented, and resulted in better education, health, but in pauperism and captivity too. East Europe threw out all forms of socialism, but China continues forcing totalitarian market socialism in its very poor and captive population.

 

Future human development seems to tend toward an ideal model combining freedom, education, health, wealth, and growing relative equity into an enlarging and thriving middle class, coming from the rich and the falling but also improving poor, by liberation of all individual civil and political liberties, and an advanced social market economy.

 

The human development dilemma of developing nations is easier to face now in 2010 than before, because now there are more real and practical facts, besides oceans of ideological propaganda. It is simply the choice between growing wealth in freedom or re-impoverishing everybody in captivity.

 

 

 

 

 

 

 

Rodolfo J. Stusser. Havana, February 28, 2009; Re-edited 12 Jan. 2010.