Is CAPITALISM GOOD For The POOR? No Yes It DEPENDS! Economic Terminology What is poverty? Who are the poor? Are countries/individuals poor? What is Capitalism? What is GOOD? Differentiate between inequality & poverty. Who is Poor? Absolute Poverty A designated minimum threshold of material well-being or income. Current standard = $ $1.25 / day PPP (World Bank) By this definition, people are poor if they cannot match the standard of living of someone living on $ $1.25 a day in America in 2005. 1,000,000,000+ Over 1 Billion People Live in Extreme Poverty World Bank The Wealth of Nations By this definition, people are poor if they cannot match the standard of living of someone living on $1.25 a day in America in $1.25/day per person = poverty $21,027/year = poverty for a family of 4 (US) $5,256.75/year per person = poverty (US) $14.40/day per person = poverty (US) Where has the number of poor declined? Institutions Matter Rule of Law Private Property Rights Open, Competitive Markets Entrepreneurship and Innovation Lets define CAPITALISM as having the RIGHT INSTITUTIONS in place. Source: World Bank Poverty and Inequality Database(April 30, 2012)More Good News Economic Freedom and Income Shares of Poorest 10% Economic Growth improves the lives of the poor by making the pie bigger Bigger slices mean higher standards of living Economic Growth The Big Picture reducing infant mortality increasing life expectancy reducing hunger improving environmental quality reducing the incidence of debilitating diseases improving health care and education increased standard of living Scarcity forces us to choose among alternatives. Economic growth gives us more to choose from and raises standards of living by: The Big Picture Rule of Law Private Property Rights Open, Competitive Markets Entrepreneurship and Innovation The RIGHT INSTITUTIONS spur economic growth and create wealth/reduces poverty. CAPITALISM is having the RIGHT INSTITUTIONS. CAPITALISM IS GOOD for the POOR! What is Challenge Week? Live on two dollars a day and follow other RULES for a week, and record your experiences for others to read. Fundraise for economic development as you abstain from purchasing goods. Why Participate Begin to understand firsthand the hardship that half the world's population endures. Nurture a new respect for impoverished persons. Participants have many reactions throughout Challenge Week as demonstrated in these blog entries from past years. Students face additional, unexpected obstacles and struggle with the emotional discomforts of "playing poverty."The Two Dollar Challenge Is CAPITALISM GOOD For The ENVIRONMENT? It DEPENDS! Economics for Leaders On Scale of 0 to 500, Beijings Air Quality Tops Crazy Bad at 755 NY Times, January 12, 2013