Introduction
Economists love labelling things and the world is no exception. We used to have the 1st World/3rd World or Developed world, and Under-developed world but now it’s more trendy to call them the Global North (RICH) and the Global South (POOR)
Think Africa, India, S. America some parts of Asia
We are told that poverty and hunger are everyday life in the Global South while we never had it so good up here in the North.
I disagree and wanted to put that to the test.
This is Part 1 of 2 parts, starting in the Global South, because if you understand what the Global North is doing to the Global South you may get a better picture of what the Global North is doing to itself.
Just my opinion of course, what do you think?
First Float your boat
Get involved in any argument about Free Market/Laissez Faire/Faux Neoliberal Capitalism and you will almost certainly hear the response that “Capitalism has lifted more people out of poverty in the third world than any other system”.
I have heard it a lot lately, and while I know its not true, I got lazy about arguing the point because to do the argument justice you need time and people willing to listen.
(Most Neo-Liberal or Libertarian types never want to hear anything that rocks their boat, they prefer to talk down to PhD Free folks like me).
We are also told rich nations, through our benevolent aid and guidance, are bringing about the development of the poorer nations to bring them into the 21st Century.
Well, that’s a lie too, as we set out to demonstrate here. Poverty is not decreasing worldwide as The World Bank and The United Nations claim, quite the opposite in fact.
The Global North is going out of its way to prevent development of poorer nations, and especially those “Poorer” nations that are either rich with mineral or agricultural wealth, or well-endowed with vast numbers of people to supply cheap labour markets.
Getting back to basics.
Why are some nations rich and some nations poor?.
I have heard some people claim folk from poorer nations just don’t work hard enough, but the reality is they work very much longer hours with fewer benefits than the we do in the richer nations.
The people that make this claim wouldn’t last a day in a Bangladesh workshop. I worked in Bangladesh for a year and witnessed their Industry.
Others might suggest, their values are backwards and institutions too corrupt, an argument which demonstrates an arrogance about our own culture and its values being always right and theirs being wrong.
It also displays an ignorance about the rampant corruption that exists in our own rich nations.
A few have even suggested that poor nations have always been poor and always will be poor simply because that is “the way of the world”.
A lazy argument lacking any evidence or research effort. Not worth an argument.
There is a very different set of reasons why some nations are poor and others are not, here are some reasons why that is.
Some Basic History
Turn the clock back to 1500 and you will see little difference between Europe and the rest of the world when it came to the living standards of ordinary people. In fact, people living in South America, India and Asia were in many ways better off than Europeans.
As late as 1800, the average life expectancy in England was between 32 and 34 years – and for a child born into working-class families back then you were lucky to reach 15.
Put this alongside evidence from China, Japan and other parts of Asia suggesting that people in these regions lived longer, healthier lives than Europeans.
Japan enjoyed a life expectancy of 41 to 55yrs, China between 35 and 45yrs and parts of South-East Asia around 42yrs.
At the same time Asia exceeded Europe in transport technology, better sanitation, public health systems, and nutritional standards.
Europe suffered a ‘massive’ 30% de-population in the 14th and 15th centuries due to The Black Death, which killed between 75 and 200 Million people and obviously slowed any form of development considerably, {although it did make the survivors more valuable and able to command slightly better working conditions.}
In contrast, Africa, North America, and South America were also de-populated by a plague ……only this time it was a plague of European conquerors, which started in the 16th century and lasted for 300 years.
The European plague was one of slavery, execution, warfare, infectious diseases, and ruthless control.
Just for starters, by the early 1800’s, a total of 100 million kilograms of silver had been stolen from southern and central America alone.
Why we call this colonisation, beats me when “colonized” nations suffered centuries of de-population as well as the theft of resources.
Between Christopher Columbus’ arrival in 1492 and the early 1600’s, South and Central America’s indigenous population shrunk by as much as 95%.
Let that one sink in.
This Genocide was a consequence not only of aggression, but the export of disease on the part of the Europeans.
A perfect storm in fact, violent death or removal of the fit healthy male and female breeding stock and replacement with Typhoid, Smallpox, and Influenzas to subdue the remainder and finish off the elderly and weak left behind.
In 2021, the removal of statues to the men that performed these vile deeds is met with howls of protest?………….. That shows what kind of people we have become doesn’t it?
If you stop to consider that Europe’s economy had been slowed for centuries by the loss of 30% of its population, imagine what losing 95% of a prime, wealthy, and industrious population could do to an already developed region of that period.
The Looting continues
All 100 million kilograms of the stolen silver we mentioned above ended up being inserted into the European economy – first into Spain, and then the rest of Europe by way of repayment on the debts Spain had run up due to its lavish involvement in the crusades.
Much of Europe was thus very much enriched with stolen silver. In Africa, the continent was primarily de-populated by a rampant slave trade with some European historians claiming that at least ten million African slaves landed alive in the Americas, Atlantic islands, and Europe.
It’s a very low estimate because it doesn’t consider the numbers who died in transit, smuggled undocumented slaves, or those killed during the fighting during the captivation process itself.
Nor does it include the east African slave trade or the Arab slave trade.
Colonization in Africa also lasted longer than in other parts with approximately 90% of the continent still under European control even in the early 20th century.
Meanwhile, back home in Europe, progress for the working majority was stifled by this use of slavery because workers were not just competing between themselves but against “Free Labour”. Pretty hard to undercut Zero wages I should imagine.
We also need to understand that it wasn’t just the plunder of the labour and the resources that kept these Global South nations down, it was something even more insidious. Not content with stealing the shiny metals, the Europeans quite deliberately trashed local industries too. What better way to guarantee a “return cargo” of western exports awaiting local consumption.
Our current History book fairy stories claim that international inequalities “have always existed”, a natural phenomenon, nothing to see here….But the historical record is crystal clear, they were deliberately created. Strange how rich powerful nations always manage to fall into the trap of unequal trade deals with the poor nations that they are so desperate to help develop.
So having grabbed the raw materials and shipped them off home, they are converted into consumables, and shipped back to the Global South to have another chunk of profit harvested from those continually poor nations.
Control
Even today, with their populations and industries trashed (or taken over), these poorer nations are still continuing to survive almost exclusively on the export of raw materials at bargain basement prices. Even political independence did not produce complete liberation despite all the flag waving.
Poor nations have their own political structures and laws, but they operate under an economic “ Aid” system that continues to make them utterly dependent on rich nations for their income.
The goal of rich nations is to ensure poor nations can never become rich enough to be competitors, they must be just stable enough to produce raw materials but poor enough to keep them cheap.
This unequal relationship between the Global north and Global south is maintained through debt. Following the end of colonialism, the massive debts of the rich colonial powers were transferred to the newly-formed, independent nations.
This was in violation of international law, but the new nations simply did not have the resources to contest it.
In general, it works like this: a rich nation sees a resource in a poor nation that it requires, such as oil or raw materials to make commodities.
The rich nation arranges a loan to that poor nation with the World Bank.
The World Bank provides these loans under conditions such as forced privatization, a useful chunk of interest, and other agreements that benefit the Global North at the cost of the South.
Then, in order to pay off this enormous debt, the poor nation makes an agreement with the rich nations to sell that resource at knockdown prices for very long terms.
I once read somewhere that Venezuela had signed a decades long contract in the 1930’s with the US for oil at around 60 Cents a barrel, and was still in force as recently as the 1960’s.
Not just happy to take the resources on the cheap these debts give rich nations the power to impose policy on poor nations, such as monopolies by foreign corporations.
A layman observer might say this is justified claiming that rich nations provide foreign aid to poor nations, but in reality aid to poor nations is vastly outweighed by what is taken from poor nations.
According to Global Financial Integrity and the Centre for Applied Research at the Norwegian School of Economics, the global south receives approximately $2 trillion in all aid, investment, and income from abroad.
The cost of that is a mere $5 trillion, in plundered resources and debt interest.
Foreign aid always comes with strings attached, it is not a gift, and the conditions always include benefits to the Global North.
Break Free?
What happens when a poor nation is fed up, tries to help its own people, or the people revolt against the current order?
Rich nations step in and put a stop to it. The system of global capitalism is often administered by force.
Before a head of state or head of government is elected in the global south, that ruler must first be approved by that nations “sponsors” often the US, and the World Bank or IMF.
Without this approval it is unlikely they will even get as far as the election process.
They must also capitulate to the global north, endorse capitalism, and maintain the current unequal economic relationship and trade deals.
If they do not, there is a good chance that this ruler or regime will be overthrown, and more often than not by the United States who have a long and complex history of regime change, often using direct military intervention.
Following the completion of westward expansion in the 19th century, the US faced a turning point and a fresh question: Should they be satisfied with Americas current level of wealth and territory, or expand its influence across the world?
Guess what? They went for expansion, influence, and control of other nations.
The public are told it is a desire to spread democracy, another lie, one of the biggest in fact.
It is simply about making money for wealthy Industrialists and empowering them to control the American Government
Consequences
Just a few examples of US-backed coups and interventions as well as the economic concerns surrounding them. There is a map of Uncle Sam’s visits down South at the end of this piece
1949, the United States assisted in regime change in Syria. President Shukri al-Quwatli refused to allow the US-sponsored oil pipeline from Saudi Arabia through Syria and into Lebanon. He also tolerated an anti-capitalist political party in his nation. The CIA had an asset on the inside, and with their help, Syria installed Husni al-Zaim, who approved the oil pipeline and began rounding up left-wing opposition.
1953, the US facilitated in regime change in Iran. Elected Prime Minister Mohammed Mossadegh nationalized the oil industry, stripping away operations from British oil corporations. Declassified CIA documents prove that the United States had a hand in Mossadegh’s removal. Mossadegh spent the rest of his life under house arrest.
1954, the United States assisted in regime change in Guatemala. President Jacobo Árbenz threatened holdings of US-owned United Fruit Company.
The CIA equipped paramilitary troops, and the US Navy blockaded the coast. Árbenz was removed from power, leaving the nation run by a succession of military juntas.
1960, the United States and Belgium ousted Congo’s Prime Minister Patrice Lumumba.
Belgium wanted to maintain its business interests in the region after de-colonization.
Lumumba was killed in 1961.
1964, the United States helped oust Brazilian President Joao Goulart, whose left-wing politics threatened capitalism. 1973, the United States backed a military coup against democratically elected president Salvador Allende, who was a socialist, in favour of the dictatorship of Augusto Pinochet, a fascist capitalist who was responsible for countless atrocities.
There are a great many more, including Vietnam, Indonesia, Ecuador, Laos, Iraq – all of which were carried out for the same reason as the debt traps and the exploitation of raw materials to make money for people already obscenely wealthy. A Map of US Intervention in S America is at the bottom of this piece.
If poor nations want to exist, they must accept the terms of rich nations, if poor nations want to do more than simply exist but actually flourish, they are violently crushed, and a more compliant head of state is installed by rich nations.
If a poor nation wants to abandon capitalism, or if a poor nation threatens rich nations with competition the CIA resorts to covert regime change. There is no way out of poverty for poor nations as long as rich nations purposefully keep them indebted and subservient.
Cooking the Books
To propagate the myth that wealthy, capitalist nations are greatly reducing poverty and that we should allow them to continue doing whatever they want, the World Bank occasionally releases data that shows global poverty gradually decreasing.
It is another lie that we have been told for years, but recently, independent economists and researchers have begun to publicize critiques of this data and have largely proven that global poverty is either stagnant or increasing, depending on whether one is calculating using percentages or total numbers.
The most well-read critique on the subject is Jason Hickle’s calculation in ‘The Divide’, and what follows is an extraction from it.
In terms of absolute numbers – the original metric by which the world’s governments agreed to measure progress – the numbers show that the poverty head count is exactly the same now as it was when measurements began back in 1981, at approximately 1 billion people.
Of course, this is only following the lowest possible poverty lines established by organizations like the World Bank and the UN. The International Poverty Line, instituted by The World Bank, being a measurement of $1.90 per day. $1.90 is the international equivalent of what that amount could buy in the United States.
Researchers are now rightly saying that people need at least $5 per day simply to have a reasonable chance of reaching their fifth birthday.
If we moved the poverty line to this more accurate level, the total poverty head-count of is now 4.6 billion people.
A more realistic number and note please that this is The Majority of humanity.
Poverty has actually become worse over time, not better, with more than 1 billion people added to the ranks of the poor since 1981.
Selling the system
So, how do The World Bank and The United Nations get away with misleading figures that show the opposite?
The World Bank wants to present the case that privatization and capitalism in general are making the world better, and that their efforts specifically are causing a net positive for the world, particularly the Global South.
Their institutional power and authority afford them a lot of leeway among the press and among the people. So much leeway in fact, that they can cook the books without any fear of interrogation by the media.
Why is the International Poverty Line (IPL) set so low despite reams of evidence and a call to adjust it much higher?
Simply because it carries the World Bank message to the public and not the truth. It would reveal that their debts, conditions of privatization, for what they are, economic colonialism.
Their calculations are not in error, they are using the wrong baseline numbers to begin with, it’s an old trick which any journalist worth his salt would call out in a heartbeat.
Over the past couple of decades, every time bad statistics about poverty emerged from the World Bank, they would quickly change the IPL or metrics and claim that the bad news from a few days ago was a mistake and massage the numbers accordingly.
This is the global equivalent of putting a thumb on the scales.
Not content with tipping the scales, the United Nations also presents this rosy picture to fool the public into believing that the global economy is on the right track, when in fact its only on track for less than half the citizens of planet Earth, and out of them, its only on really on track for the top 0.01% of them.
This data massage/analysis began in 2000 with the UN “Millennium Development Goals”.
They started out by changing the measurement of poverty from absolute numbers to proportional numbers, which gives the illusion of less suffering over time due to population growth.
The reality is that the suffering just grows right along with population growth.
The moral implications of this are atrocious because it implies that even if there is more and more suffering throughout the world, so long as the population of less impoverished people keeps growing, the increasing number of poor people can be seen as decreasing.
No need for us in the North to have bad conscience about taking more than our share of the pie then.
To manipulate the data still further, the UN moved the starting point from 2000 to 1990 to take advantage of gains that were already made BEFORE they even started their program.
They did this to take credit for massive improvement on poverty in China and India during the 90’s and to wrap figures within their data. The twisted minds that dreamt up this display of statistical acrobatics were simply hoping that nobody would notice the duplicity.
The United Nations, The World Bank and the International Monetary Fund cannot lay any claim for being responsible for improvement in poverty in China, along with a few other Asian nations. The nations in that region are some of the only places in the world where free-market capitalism was not operational and certainly not forcibly imposed by the World Bank and the IMF.
China was not subject to the structural adjustment imposed on the global south.
If we take China out of the equation, global poverty headcount increased during the 1980s and 1990s, while the World Bank was throwing its weight around in the Global South. Our current Laissez-faire economic system has not relieved poverty it has made it worse.
The continual propaganda that claims the opposite is true also worsens the situation still deeper by preventing action to stop the rot and remedy the issue.
Global capitalism is a complex system, we are told, and we are not all economists, which is what they rely on. It helps thickens the smoke and polish the mirrors they use.
A layman observer might wonder why the global south participates in this obvious debt trap, but the answer is the same you will get from any individual, who works for a corporation: “There is precious little choice”.
Individuals, like everyone under capitalism, are being exploited for their labour, and if they rock the boat they are out of work.
This has a lot to do with the frantic rush to privatise, digitalise and automate every aspect of working life, its not an economic philosophy it’s a stranglehold on our lives, forcing more and more people out of work to look for fewer and fewer jobs.
Our layman observer might also wonder how rich nations that fund rebellions and stage coups in poor nations could get away with this violation of international law so consistently if it is so terrible.
The answer is the same for individuals who can be subjected to state violence within their own nation. What is happening internally within a nation is also happening in a grander scale externally, and it has been happening for a very long time.
Today, more than 60% of the world’s population (4.6 Bn) live in crippling poverty, struggling to survive on less than $5 per day.
Do NOT be fooled into thinking that things are getting better all round.
They are not, and the future for Democracy looks blacker every year.
Sources of Information for this piece
Books
The Divide – Jason Hickel.
Give and Take – David Sogge,
Overthrow – Stephen Kinzer,
How Europe Underdeveloped Africa – Walter Rodney.
Documentaries:-
The End of Poverty – Philippe Diaz
Poverty, Inc. – Michael Matheson Miller
US Military Interventions in S America
Another great site by the Dangerous Globe
