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January 21, 2014

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Home » Opinion » Foreign Views

Our world a better place overall than we think

By Bjorn Lomborg | January 21, 2014, Tuesday | Print Edition

READ a newspaper or watch the evening news, and the world always seems to be getting worse. As one Danish journalism textbook puts it: “A good story is usually bad news.”

Only occasionally do we get uplifting, things-are-getting-better stories. When we do, they feel like a guilty pleasure. As a result, we often think that the world is in worse shape than it is — even if we think our own lives are improving.

Since 1977, Gallup International has asked people around the world whether they believe their lives will be better next year than they were the year before.

For 2014, almost 50 percent of those surveyed said that their lives will be better, with just 20 percent saying they will be worse off. Yet, asked for their opinion of how the world economy will fare, the score is almost even, with 32 percent believing that it will be better, and 30 percent that it will be worse.

So it is worth stepping back and recognizing that many indicators point to a world that is improving. New data from the World Bank show that the proportion of extremely poor people has more than halved over the last 30 years, from 42 percent of the global population in 1981 to 17 percent in 2010.

While 1.2 billion people in the developing world still live on less than US$1.25 per day, the rate of extreme poverty has never been lower. Economists estimate that in 1820, more than 80 percent of all people were extremely poor.

Better education

Similarly, consider the amazing improvements in education. Illiteracy today still afflicts 20 percent of the world’s population, but that is down sharply from an estimated 70 percent in 1900. In the prosperous West, rapid increases in literacy were achieved early in the 20th century. In developing countries, similarly large (and continuing) gains were made from 1970 to 2000, with China recording the biggest improvement.

The costs of poor education are substantial. Together with the Copenhagen Consensus, economists have attempted to assess the cost of illiteracy.

We estimate that if there had been no illiteracy in 1900, the world would have been US$240 billion richer (in inflation-adjusted terms), equivalent to about 12 percent of global GDP at the time.

So, the global illiteracy problem in 1900 can be said to have cost the world 12 percent of GDP. Today, the cost of global illiteracy is down to 7 percent of GDP. By 2050, when illiteracy will reach about 12 percent, the cost will have dwindled to just 3.8 percent of GDP.

Likewise, war carries a high economic and human cost.

But, while the images of it that we see are more immediate and vivid than ever, our perception of ubiquitous conflict is wrong. In the 20th century, conflict killed 140 million people, including 78-90 million in the two world wars.

The good news, which is not often publicized (precisely because it is good), is that scenarios in which military spending is higher, the same, or lower in the future suggest that the high military costs of the 20th century have been turned into what looks like a permanent peace dividend. World War I cost about 20 percent of global GDP, and World War II cost almost twice as much.

When examining the cost of conflict, the Copenhagen Consensus economists estimate the actual costs of global military expenditure. If one also takes into account the lives lost in battle, the estimates increase by about 50 percent.

According to these estimates, annual military costs in the 20th century averaged about 5 percent of GDP. Yet, global costs have declined steadily, reaching 3.5 percent in 1980 and about 1.7 percent today. Even a pessimistic outlook suggests an increase only to about 1.8 percent by 2050; under a more optimistic scenario, military costs could decline further, to 1.6 percent of GDP.

There are still plenty of problems in the world, as the news media point out every day.

And we do need to focus on eliminating poverty, stamping out illiteracy, and promoting peace.

But we also need to remember that the world is a better place overall than we think.

Bjorn Lomborg is the editor of “How Much have Global Problems Cost the World? A Scorecard from 1900 to 2050.” Copyright: Project Syndicate, 2014. www.project-syndicate.org. Shanghai Daily condensed the article.

 

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