Finance
The Ever-Present Challenge of Escaping Poverty (with Noah Smith)
Intro. [Recording date: July 17, 2024.]
Russ Roberts: Today is July 17, 2024. My guest is economist Noah Smith. He writes at Substack at Noahpinion, NOAHPINION, Noahpinion. This is Noah’s fourth appearance on EconTalk. He was last here in January 2024 and discussed whether a nation can plunder its way to wealth.
Our topic for today is poverty, which Noah calls the “elemental enemy” in his essay at Noahpinion on the subject. Noah, welcome back to EconTalk.
Noah Smith: Hey, nice to be back.
Russ Roberts: I want to warn parents listening with children: this episode may involve adult themes or language.
Russ Roberts: Why do you call it the ‘elemental enemy’? It’s quite grand, and I happen to think it deserves that grandeur. But why did you use that wording?
Noah Smith: That phrase comes from the…Dr. Frankenstein. So the titular character, Dr. Frankenstein, I believe, is on an expedition to the Arctic, and he writes about data he will collect that will help humanity against the “elemental enemies of our race.” And he means the elements themselves. He’s talking about cold. How can people survive the cold better?
And the idea is that people are born into a universe where the elements themselves are against us. Poverty is the basic enemy, not just because it is the basic enemy, but because the universe itself is always trying to kill us with rocks from space and diseases and just plain hunger that pops up every few hours.
Russ Roberts: Yes, it’s an interesting, thought-provoking observation that we can all absorb.
At the beginning of the essay, say the following. Quote:
Asking why some societies in the world are still poor is the wrong question. Poverty is the default condition, not just for humanity, but for the entire universe. If humanity is simple builds nothing– farms, granaries, houses, water purification systems, power stations – we will exist at the level of wild animals. This is just physics. [Emphasis original.]
I think that’s undeniable. But you use that stark language to make it very clear what our challenge is as human beings living on a rock.
Noah Smith: Yes. That’s… I mean, that’s our state in the world, right? If you look at the planets in the solar system, Mars or whatever, they’re just barren. Right? Life is rare.
And even on Earth, if life exists, most of it exists at a level of sheer absolute poverty. Animals are always on the verge of starvation or predation. You know, that’s the only way animal populations can be controlled.
And then if you look at human history, for most of human history, essentially everyone lived in grinding poverty. You know, even – I think this is kind of a cliché to point out – but even kings: kings had enough to eat and they had servants who did things for them. But at the same time, due to the lack of modern technology, they were still constantly carried away by diseases. And honestly, they were probably still malnourished; as children they had a heavy burden of disease, which hampered their intelligence and physical health.
You know, we’re just… an ordinary American is better off than a king of old, even if they have fewer servants. Right? And thus–
Russ Roberts: We have non-human servants who often work much more effectively than the physical servants of the past, for example cleaning clothes, washing dishes and the many things we have automated.
Noah Smith: That’s true.
And so the default situation for much of the world – Yanno, history, all of life – is poverty. There is only a tiny bit of non-poverty in the universe. We live in a little pocket of non-poverty in the universe. Everywhere else people are constantly on the brink of death. You know, everywhere.
Russ Roberts: I never thought about it. The lion is the king of the jungle, but the lion’s livelihood is its livelihood. If you find a nice herd, you might have a good day. You might even have a few good days.
But you can’t go above the minimum with any success because you don’t have technology. Is it natural – as we will discuss, what allows humans to imagine and then experience a standard of living that is far above subsistence and far beyond the natural – our natural gift of being able to walk upright, an opposable thumb . This is all fun stuff – and a brain. But if you don’t have tools and those tools don’t get better, then you stagnate. And most of human history – as I once heard, George Will said, ‘Most of human history is that a man, if he’s lucky, is a man who stands behind a horse, walks behind the horse and looks at the back of the horse as it pulls a plow.’ Those are like… those are good times. And for most of human history, that’s as good as it gets. And that meant…
Noah Smith: Right. You’ve seen Monty Python and the Holy Grail, right?
Russ Roberts: Absolute.
Noah Smith: I think the best statement ever made about economic development and economic history is in that movie, where someone says, “How do you know he’s the king?” And someone else says, ‘He ain’t got shit all over him.’
Russ Roberts: Yes. That’s a blunt way to describe pre-industrial life. It’s a good point. And of course we ate better food than the rest of us, and had more to eat.
But it was limited. The castle was bigger than the hubble, but the castle was cold, except for those handful of rooms where a fire was burning in that area. What?
Noah Smith: Then it’s smoky. You didn’t have a thermostat.
Yes, we live like the kings of old. I mean, we have jobs; we have work. But I think kings officially had jobs and had to work too. Many kings worked very hard. There aren’t always people always trying to kill us because of our heritage.
It’s like: the reason you have Game-of-Thrones-like situations where people try to kill the king all the time is because you’re competing for the only non-poverty position in society. [More to come, 8:00]
