Tim Worstall
Bernie Sanders has been campaigning in Baltimore, Maryland and some
of his remarks indicate that he doesn’t really understand what poverty
is. He’s getting very mixed up between relative poverty and absolute
poverty. Now, it is indeed true that American liberals and progressives
get uptight about relative poverty, what we might also call inequality. I
don’t get quite so wound up about it, being a classical liberal myself,
but it is still true that relative and absolute poverty are very different concepts.
Absolute poverty is simply not having a roof over your head, a shirt on your back or even a cheap meal of anything in your stomach. The relative poverty in Baltimore that Bernie is talking about is just not anything like this at all. It’s having less than others in the society around you, yes, but that is indeed inequality, not absolute poverty.
Of course, some of what Sanders is saying is just standard stump politics:
No, really, just no. GDP per capita at Purchasing Power Parity (that
is, after we adjust for price differences across places) is some $2,900
or so in the West Bank. That is, the absolute maximum value of
everyone’s average income (for GDP is indeed all incomes of everyone, by
definition) is $55 a week. The people of Baltimore are not living on
that sum. Even if you have no work at all, no income from work at all,
you will be gaining more than that from food stamps and so on. In fact,
absent serious mental or addiction problems, I seriously doubt whether
there’s anyone at all in the U.S. living on that sort of sum.
No, we cannot just count cash income here–we mean all sources of things that can be consumed. So whatever help people get with housing, healthcare, pensions, unemployment, food stamps and everything. That sort of absolute poverty simply doesn’t exist in the U.S. and it’s wrong to insist that it does.
However, to my mind this actually gets worse:
But this is more than just statistical snarking. There’s a very
important economic and public policy point to be made here. I’m
perfectly willing to accept that perhaps the Baltimore school system
isn’t the greatest in the world. I’m not happy that that is so but I’m
willing to accept that evidence. Yet that Baltimore school system quite
obviously has sufficient money to be able to provide a perfectly
acceptable education. Figure 3.1 here,
it’s actually some 50% more than Finland spends and Finland is said to
have one of the very finest school systems in the world. And yes, again,
those numbers are PPP adjusted so we are taking account of different
prices across geography. Baltimore also spends a little more than 50%
more than the average schools budget across all the rich nations.
There’s no financial reason why the Baltimore schools shouldn’t be good,
in fact no financial reason why they shouldn’t be very good indeed.
Which is the thing that grates so much about Bernie at times. In fact, something that rather grates about many progressives–their insistence that it is the amount of money that matters. It isn’t. It’s how money is spent that matters. Taxing richer people more to spend more on Baltimore’s schools isn’t going to do much good because Baltimore’s schools already get well above world average spending, above U.S. average spending and apparently they’re still awful. That is Bernie’s complaint, after all, that the schools aren’t good, yes? Thus it’s not money that is the problem, is it? Not the quantity of it available that is–it’s how it’s being spent. I’d have a lot less problem with tax and spend policies if rather more attention were paid to how it was being spent, how efficiently.
And that is the public policy point to be considered here. There is no possible sum of tax money that would create a decent education system out of one being grievously mismanaged. Thus, once we’ve got reasonable amounts of money going into such a system, we have to focus rather more on the efficiency with which it is being spent rather than just crying out for ever more cash to be shoveled into it. That is, Senator Sanders, could we have a little more thought about why Baltimore cannot produce at least a simulacrum of a reasonable education system on 50% more money per pupil than possibly the world’s best education system, that of Finland, requires? And when you’ve done that pondering then we can talk about budgets.
Democratic presidential candidate Senator Bernie Sanders (D-VT) (Photo by Scott Eisen/Getty Images)
Absolute poverty is simply not having a roof over your head, a shirt on your back or even a cheap meal of anything in your stomach. The relative poverty in Baltimore that Bernie is talking about is just not anything like this at all. It’s having less than others in the society around you, yes, but that is indeed inequality, not absolute poverty.
Of course, some of what Sanders is saying is just standard stump politics:
‘It’s important to show the world that in the United States of America, in Freddie Gray’s neighborhood and in similar neighborhoods all over this country, what we’re seeing is a disaster,’ he said.Even Donald Trump wouldn’t be able to get away with a “We’re not investing here, hahahahaha.” So “investing in communities” is about as controversial as praising Mom’s apple pie. However, Bernie really does go wrong here:
Sanders made it clear he wants to curb high crime rates and improve education in the city.
‘We need to invest in those communities, put people to work in those communities,’ he said.
Bernie Sanders showed no signs of ‘toning down’ his rhetoric Saturday, speaking to Maryland voters at the Royal Farms Arena in Baltimore about the state of the U.S. economy in 2016.
Sanders said that poverty in the worst areas of Baltimore rivaled conditions in ‘The West Bank in Palestine,’ ’North Korea,’ and ‘distressed cities in Nigeria, India, China, and South Africa.’
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No, we cannot just count cash income here–we mean all sources of things that can be consumed. So whatever help people get with housing, healthcare, pensions, unemployment, food stamps and everything. That sort of absolute poverty simply doesn’t exist in the U.S. and it’s wrong to insist that it does.
However, to my mind this actually gets worse:
‘In this country we going to make profound economic changes,’ he said. ‘The people on top will not continue to accumulate billions of dollars in personal wealth while children in Baltimore and inner cities in this country go hungry, and have inadequate healthcare and education.’It’s that comment about education that really grates because Baltimore spends rather a lot on the education of the children of the city:
Wallace said that Baltimore ranks third in per capita school spending.Leave aside the rank for a moment and look at the actual sum: $15,000 and change per pupil per year. That is, Baltimore spends more per pupil than the GDP per capita of those countries mentioned–South Africa, Nigeria, India, China and the West Bank (and, obviously, North Korea). There really is therefore a large difference between Sanders’ claim of equal poverty to those places and the reality. It simply is not true at all that Baltimore is as poor as those places.
That’s only true if you look at the 100 largest school districts. Among the top 500, Baltimore ranks 20th. Among school districts with at least 5,000 students, Baltimore ranks 160th in spending.
Which is the thing that grates so much about Bernie at times. In fact, something that rather grates about many progressives–their insistence that it is the amount of money that matters. It isn’t. It’s how money is spent that matters. Taxing richer people more to spend more on Baltimore’s schools isn’t going to do much good because Baltimore’s schools already get well above world average spending, above U.S. average spending and apparently they’re still awful. That is Bernie’s complaint, after all, that the schools aren’t good, yes? Thus it’s not money that is the problem, is it? Not the quantity of it available that is–it’s how it’s being spent. I’d have a lot less problem with tax and spend policies if rather more attention were paid to how it was being spent, how efficiently.
And that is the public policy point to be considered here. There is no possible sum of tax money that would create a decent education system out of one being grievously mismanaged. Thus, once we’ve got reasonable amounts of money going into such a system, we have to focus rather more on the efficiency with which it is being spent rather than just crying out for ever more cash to be shoveled into it. That is, Senator Sanders, could we have a little more thought about why Baltimore cannot produce at least a simulacrum of a reasonable education system on 50% more money per pupil than possibly the world’s best education system, that of Finland, requires? And when you’ve done that pondering then we can talk about budgets.
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