Column: End world poverty? Shop Wal-Mart?
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Is it heroic to raise one person up out of poverty each month, but merely a statistic to raise up a million?
There is a thatched-ceiling to poverty alleviation through micro-finance. It may well be the case that the vast majority of Grameen Bank micro-entrepreneurs experience considerably greater pride and happiness in their work than do the factory workers hired by Wal-Mart suppliers. But most of these micro-entrepreneurs, who borrow less than $100 each and then repay the loan, do not experience as large an increase in standard of living as do those rural Chinese who move to urban areas and thereby earn an extra $1 or so per day, $365 or so dollars per year. Poor, rural micro-entrepreneurs selling eggs to other poor rural peasants simply do not have access to the vast pipeline of wealth from the developed world.
Most of the sweatshop workers in Japan in the 1950s and '60s, as well as the most of the sweatshop workers in Taiwan and South Korea in the 1970s and '80s, are now middle-class retirees in developed nations. Likewise most of the "underpaid" Chinese workers of today will retire in a state of comfort and luxury unimaginable to them in their rural youth, as average Chinese wages will gradually rise just as they have risen in every other nation that has experienced long-term economic growth. At present rates of economic growth, China will reach a U.S. standard of living in 2031.
Paul Krugman, one of the most aggressively left-liberal economists writing today, understands how economic growth helps the poor. Writing for Slate in 1997, he said:
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