STAFF NEWS & ANALYSIS
UN: World's Slums Grow
By Staff News & Analysis - March 23, 2010

Almost a quarter of a billion people moved out of slum conditions in the past decade, driven by rapid economic growth in emerging giants India and China, but the number of people living in them continues to rise, the United Nations housing agency said on Friday. The number of people living in shantytowns increased by 55 million to 827.6 million as population growth and migration from the countryside outstripped the effect of upward mobility in cities, the U.N.'s biennial report on cities found. "The situation has improved over 10 years, but alas over the same period, the net increase of the urban poor is 55 million," Anna Tibaijuka (left), the executive director of the U.N. Habitat program, said in Rio de Janeiro. The Brazilian city will next week host the World Urban Forum, a five-day U.N. conference on the state of the world's cities, where more than half the global population now lives. – Reuters

Dominant Social Theme: Problems of poverty are still growing, unfortunately.

Free-Market Analysis: One might think the world's problems, especially as regards the poor, would be diminishing given the amount of attention to the plight of those who are less fortunate. But here we have an article stating definitively that the world's population of the poor has been expanding and that half of the world's population lives in conditions of poverty. This is despite the creation of the UN and seemingly hundreds of thousands of NGOs and non-profits that are apparently showering aid of all sorts on impoverished peoples wherever they may be.

In truth, though people have a hard time facing this (if they think about it all), it is likely the Western economic order itself that militates against a reduction in poverty. One can see this at work in South American countries that are supposedly either capitalist or socialist but that really practice a form of monopoly capitalism – imported from the West (and supported by it) that concentrates wealth and power at the top and leaves 99 percent of citizens struggling for survival. One might suggest that free-markets are the solution to the endless, grinding poverty that so many face, but it is noteworthy that those with the money and power are loath to surrender even a portion of it. Free markets haven't failed in such countries – they've hardly ever been tried. Here's some more from the article excerpted above:

Barring "drastic" action, the number of slum dwellers in the world's cities is expected to grow by 6 million a year over the next decade to hit 889 million by 2020, the report said. China's pro-growth policies had helped to cut the number of slum dwellers there by a quarter over the decade, while India achieved a reduction of a third. Together, at least 125 million people were lifted out of poverty in the two emerging giants, the report found. In Latin America, Brazil led the way in absolute poverty reduction as 10.4 million people left slum conditions.

One is struck, when one visits South America, especially, at the operation of the free-market at the street level. Virtually everyone is selling something – clothes, cell phones, cigarettes – and the selling and deal-making goes on day and night. One can see the people's innate entrepreneurialism, but it remains difficult for people to get ahead because the real power resides in financial and industrial institutions that are in the hands of a few. In Venezuela for instance, the state increasingly owns the financial and industrial institutions. Elsewhere they are in "private hands." But the ownership makes little difference. The people on the street still struggle and are powerless to help themselves no matter how hard they try, or work.

It is also true, unfortunately, that the figures cited in the report presented above are likely to get worse over time not better. This is because China's growth may well subside, and the resultant dislocations will doubtless plunge more Chinese back into the poverty and affect many other countries as well. The cascade effect will again raise poverty rates. Viewed from this perspective it is hard to see how a conference on poverty in Brazil will have much of a long-term effect.

After Thoughts

Economics matter – and economic systems count, even more than global regulatory policies and direct aid. A move away from the mercantilist manipulation of the free market (using the color of government for private gain) would probably be most helpful. It is central banking manipulation and the over-production of fiat money that endlessly concentrates wealth and power in the hands of a few while depriving the many. We don't hold much hope that the Brazil conference will deal with such issues. Fortunately, the action has moved, at least in part, to the Internet. Here on the 'Net all sorts of innovative solutions are being suggested and the problems being voiced are, for the first time in decades, positioned within the context of what is actually occurring. One must first define the reality of a problem before offering a solution.

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