CAPITALISM'S ACHILLES HEEL Dirty Money and How to

226 CAPITALISM’S ACHILLES HEEL
Nonmonetary measures of poverty and inequality—social exclusion,
Sen’s capabilities, the UNDP’s Human Development Index, caloric requirements,
and more—are difficult to quantify and operationalize. Nevertheless,
they are steadily working their way into the framework of
economic policy, first in western countries and perhaps eventually in developing
and transitional economies. I am not yet persuaded that these
broader measures are necessarily more accurate or revealing than monetary
measures. This leaves me somewhat conflicted over their use. On the positive
side, they have the benefit of bringing more disciplines—sociology,
psychology, even philosophy—into the business of global development.
This is especially important, as I address again in Chapter 12. On the negative
side, they contribute to removing western business and banking sectors
from development concerns, convinced that these issues are the
province of specialists and peripheral to commercial pursuits. As it is,
many informed people believe that development is primarily a function of
foreign aid dispensed by economists, statisticians, and do-gooders, and
this view is reinforced by measurements that are, rightfully or wrongfully,
seen as soft, esoteric, and subjective.
What is the preferable approach to evaluating poverty? People living on
$1 a day and percentage growth in GDP—these are the kinds of numbers
that can hold the attention of corporate and financial executives. Capabilities
and social exclusions—these can expand the community of global development
experts. Both monetary and nonmonetary measures will no doubt
be used for the foreseeable future. It’s uncertain which is likely to contribute
more to the alleviation of poverty.
Second question: Is global poverty rising or falling? I say earlier that
you can find evidence to support any ideological position you want to
take. With this in mind, the few quotes on the facing page may be mildly
amusing.
Wide press commentary followed the April 2002 release of a study by
the economist Xavier Sala-i-Martin, demonstrating that global poverty had
plummeted between 1976 and 1998. In his analysis, the number earning
$2 a day or less declined by 450 million and those earning $1 a day or less
fell by 234 million. 16 Free-market fundamentalists cheered the result, proof
that capitalism’s “invisible hand” spread the benefits of prosperity all across
the globe.