LSO230 Lecture 1: January 11, 2008

Professor: Adam Norman
Class: S2172
Website: http://www.lso230.com/

What will we do
Cover Modern Social and Political Thought
Scope cut down (Adam's interests :P)... past 10years

Internation Trade
International Devel
Corporate excess
Hegemony

We will start with interational development
Bono is friends with Jeffery Sachs

Jeffery Sachs

• One of the worlds most important economists (though not necessarily the best)
• Likely to win a Nobel Prize for Something
• Is concerned with human necessities and reasons why some countries are rich and some are poor
• Some people think that he is somewhat unrealistic

His book is titled "The End of Poverty"
idea is that for the first time every we can actually end real poverty

What is Poverty?
Three types of poverty

• absolute - Unable to meed basic needs (calories, clean water, education, health care, shelter, clothing) Perhaps make $1/day
  
• moderate -
  
• relative

PPP - Purchasing power parity... what can you buy in USA for $1
Roughly $1.25CND... so $1.25 is what 1.1 Billion people earn every day. (1.5billion 1981)

Jeffery Sachs says we can end this type of "absolute" poverty. Things are getting better.

Poverty is growing most and fastest in Sub Saharan Africa - doubling in 20 years

In East and South asia the poverty rate has fallen by roughly a half.

Moderate Poverty
$2/day PPP (1.6 billion people live in moderate poverty)

The world has always been worse than what it is now. We live better than kings did 200 years ago.

Our income is roughly $24,000/year... 200 years ago $1,200/year.

What Jeff wants to do

• Cut poverty in half by 2015
• End absolute poverty by 2025
• ensure that every country is progressing by 2025
• to this with the financial help that has long been promised by rich countries

How do people get rich? Save -> Invest -> Profit -> Save -> etc
People who are in absolute poverty cannot save... thus they cannot invest thus no profit. What we need to do is help them save and/or invest.

We've helped people like this before (Europe/Japan after WWII) - Marshall Plan ($130Billion)

US Gave food, fuel, equipment, raw materials (to fight communism) ... worked like a charm
"The most unsordid act in history" Winston Churchill

Poverty Trap
Some people are too poor to invest for themselves... they are incapable of helping themselves.

eg
Congo

• Destroyed by exploitation, war, and dictatorship
• 4 million dead by famine and war
• rampant corruption
• one phone for 30 people
• huge population growth (double every 20 years)

To help Congo, we must fix everything at once... not just little by little.
small investments wont work need a really big shove.

Need to do these things with big push

• fix machinery
• get people to work (including women)
• get everyone into education
• investment
• improve technology
• Agriculture must improve
  
• reduce disease
• enforce the rule of law