Angus Deaton wonders whether he should have spent so much time studying other country’s poverty

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International development aid is based on the Robin Hood principle: take from the rich and give to the poor.

…A more formal term for the Robin Hood principle is “cosmopolitan prioritarianism,” an ethical rule that says we should think of everyone in the world in the same way, no matter where they live, and then focus help where it helps the most.

…I have thought about and tried to measure global poverty for many years, and this guide has always seemed broadly right. But I currently find myself feeling increasingly unsure about it. Both facts and ethics pose problems.

…Citizenship comes with a set of rights and responsibilities that we do not share with those in other countries. Yet the “cosmopolitan” part of the ethical guideline ignores any special obligations we have toward our fellow citizens.

We can think about these rights and obligations as a kind of mutual insurance contract: We refuse to tolerate certain kinds of inequality for our fellow citizens, and each of us has a responsibility to help – and a right to expect help – in the face of collective threats. These responsibilities do not invalidate or override our responsibilities to those who are suffering elsewhere in the world, but they do mean that if we judge only by material need, we risk leaving out important considerations.

When citizens believe that the elite care more about those across the ocean than those across the train tracks, insurance has broken down, we divide into factions, and those who are left behind become angry and disillusioned with a politics that no longer serves them. We may not agree with the remedies that they seek, but we ignore their real grievances at their peril and ours.

That is recent Nobel Laureate Angus Deaton presumably reflecting on Trump, Brexit, far right parties, or possibly the Princeton economics faculty lunches.

I have a slightly different take: paying attention to inequality at home is good politics but not necessarily good ethics.

I’m not a nationalist, and I don’t agree that my moral obligation to the least fortunate is greater if that person happens to live just inside rather than outside my country’s border. To me, just because humanity has failed to make a global social contract doesn’t give the local contract more moral weight.

Now, to the extent my actions affect local people more than faraway ones, or my winning is tied to their losing, then I can see how my obligations to people at home rise. That might be a reasonable argument to make. But I also wouldn’t be surprised if my day-to-day actions as a voter, writer, or consumer affect the lives of someone in Afghanistan or China more than someone in Tennessee.

Nonetheless, we have the politics and the social contracts we have. The consequences of not sharing the gains and losses from globalization more equally are pretty apparent.  Looking back, it has been very hard for the losers from globalization to adjust.

It may have made better political sense to take a more gradualist approach to free trade (though not as gradulaist as our approach to free movement of labor). Or perhaps the support systems we have are ill equipped to help people make this adjustment. On this topic, this discussion between Harvard’s David Autor and GMU’s Russ Roberts was pretty fascinating.

80 Responses

  4. Here Professor Deaton is being a Rawlsian–social justice only applies to people within a nation state. Similar sentiments are expressed by Dani Rodrik and Larry Summers.

    I am puzzled by all these. For ages, people like Professor Deaton and Summers asked poor and middle-income (Dani Rodrik is consistent in his nuanced view of the benefits of globalization) countries to open up their economies as a path to prosperity. Now these countries are blamed for destroying Western civilization.
    So the fact that “elephant diagram” shows that middle class in rich countries didn’t benefit from globalization even though everyone else everywhere benefited is a justification to “take away the ladder”? This a weird social justice criterion–the middle-income in rich countries gets more weight than everyone else!

  5. It’s not about the money.
    It’s Rodrik’s Trilemma – nations, democracy & globalization; perm any two, you can’t have all three. Ask Greece.

  6. Good post, Chris.

    I tend to agree with your assessment. The solution to the problem of “domestic voters feel left behind because elites seem to care more about those beyond our borders” is not to shift our attention inwards. It is to help ingrain in everyone a sense that all people around the world are our fellow citizens.

    I guess you could make a “second best” argument that you may need a more inwardly-oriented set of policies which is less-than-optimal in terms of maximizing the total increase in welfare, in order to prevent a democratic revolt at home. But that’s quite a cynical way to think if you ask me.

  7. Also, I do not even think that you are right about Trump and Brexit voters. People have always been anti-trade (mercantilist) because they do not understand the economics of trade.
    At the peak in 1977 only 22% of USA jobs were in manufacturing and now 9%. That is a loss of 13% but fewer and fewer people aspire to work in manufacturing where the work is often hard a tedious. Some may be voting in solidarity with people thinking that others are hurting.

    The old anti-trade folks have been joined by anti-Muslim immigrant voters created by the terrorists. Plus some HBD folks who have tired of being blamed for the crime and under-performance of certain minorities and affirmative action. Which is illogical and innumerate but is fueled by the news.

  8. Since the difference between the foreign and domestic poor is so great and the domestic poor are so hard to help, I give most of my charity to efforts in poor countries.
    Until I was about 30 years old (I graduated college at 23) I earned just a little more that minimum wage working in restaurants and I now am in the top 2% of earners and to be a top USA earners. So I have experienced both what we call low income and high income and yes it is better being high income, but not that much better.

    One of my sons hated school and so, took a job as a plumber’s helper right out of high school. He with us 2 years and saved most of his income and added some college money he got from my father and bought nice condominium for cash and he is doing great. I think he makes about $11/hour and gets a little overtime most weeks.