This year, the Royal Swedish Academy of Sciences awarded the Nobel Prize in Economic Sciences to Abhijit Banerjee, Esther Duflo, andMichael Kremer for their pioneering work in attacking issues of education and health to provide real world solutions in attacking the global problems of poverty. While I laud these two gentlemen and one woman for their work to provide real, sustainable solutions to alleviate poverty worldwide, many of you may be surprised by my refusal to laud the Royal Swedish Academy of Sciences for awarding the Nobel Prize in Economics to this particular pathway of tackling global poverty solutions for its decidedly political ulterior motive for doing so.
While I will not go as far as to say that the awarding of this year’s Nobel Prize in economics was as politically motivated as the awarding of the Nobel Peace Prize in 2009 to US President Barack Obama, as the political motivations for this year’s Nobel Prize in economics are not as clear cut as they were for the 2009 Nobel Peace Prize, I still believe that a large motivation for the 2019 Nobel Prize in economics was political, given the great number of revolutions around the world in response to soaring food and energy prices and greatly reduced standards of living in multiple nations, including Ecuador, Chile, Spain, Iraq, Sudan, Kashmir, Honduras, Zimbabwe, Mexico, Nicaragua, Venezula, etc. I believe that there was a bias towards giving the Nobel Prize in economics this year to individuals working on issues of human poverty in order to send a message to the world that the “elite” care about the poor, even if the awarded solutions to global poverty never considered, by far and away, the best, most impactful solution to global poverty that currently exists.
On one hand, I admire the approach of this year’s Nobel Prize in economics recipients as their approach is real-world based and based upon real world implementation that produces meaningful impact, and not just the further development of economic models or theories to “solve” global poverty. I admire such an approach as I have taken a very similar approach as the basis for my skwealthacademy. The impending launch of my academy is about application of knowledge in the real world, not just theory, to improve every client’s quality of life. For example, in the business related portions of my courses, I don’t promote any useless theory that the price of gold, silver, oil, etc. is based upon changing dynamics in the global physical supply and demand determinants of these commodities because these mechanics simply do not represent how the price behavior of these commodities is executed in the real world. If we shut down the loco London markets and the New York Comex gold futures markets for a few weeks, everyone would quickly learn how horrendous are the many of the theories taught in business schools about pricing mechanisms of capital markets and their total disconnect from the real world.
To reiterate this point, so it is crystal clear, I support the work and the importance of the work performed by this year’s Nobel Prize in economics recipients. The problem I have with most awards is that they are politically-based more often than not. For example, does anyone sincerely believe that the Nobel Prize committee should have awarded President Obama with the Nobel Peace prize in 2009 before he had done anything deserving of the award and before his administration expanded US war efforts in the Middle East and Africa that were the antithesis of spreading peace throughout the world? With the global divide between the rich and poor at new heights in most nations in the world, for political reasons, it was incredibly important for the Nobel prize committee to try to stem the rise of community driven revolts all around the world in response to deteriorating economic conditions by the awarding of a prize that dealt with poverty issues to send a message to the world, “Look, the financially and politically elite really care about you” (even though they do not).
Even in articles written about the 2019 Nobel Prize in economics contained on the nobelprize.org website, it literally took me less than a minute before I easily spotted a lot of propaganda being disseminated along with the reporting of this prize. Nobelprize.org stated “More than 700 million people still subsist on extremely low incomes. Every year, around five million children under the age of five still die of diseases that could often have been prevented or cured with inexpensive treatments. Half of the world’s children still leave school without basic literacy and numeracy skills.” By what and whose metrics? In articles distributed about poverty in mainstream media, I constantly spot falsehoods that deliberately underestimate the massive scale of global poverty, including articles scripted by bankers about how the World Bank and IMF, two of the most notorious institutions that spread poverty through their global policies, actually are helping to “solve poverty”. Let’s begin with the statement that “700 million people still subsist on extremely low income”, which is tantamount to declaring that the number of people living in poverty today is about 700 million. Since nobelprize.org did not define what is considered extremely low income or how they derived that data point, a little digging online quickly revealed that the metric used to define “extremely low income” is likely total daily living expenses of $1.90 to $2.00 a day.
For example, in 2013, statistics ironically compiled by the World Bank, estimated that nearly 660M people on planet Earth lived on less than $2 a day. However, that same year, if we just increased that metric to the amount of people that lived on less than $2.50 a day, the numbers increased nearly five times from 660M to about 3 billion, or half of the entire population on planet Earth back then. Consequently, depending on a ludicrously low daily expense metric to define poverty, in 2013, one could have sold a story that tremendous inroads into the war on poverty had been accomplished because only 1 in about 10 people now lived in poverty based upon the $2 daily expense metric. However, if one ratcheted up the poverty metric by only $0.50 per day to $2.50, that narrative would have become impossible to sell, as the narrative of stunning success in the war on poverty would quickly transform into abject failure in the war on poverty as 1 out of every 2 people on planet Earth will still struggling to stay alive.
With great irony, the World Bank or IMF is always promoting some type of multi-year plan to solve world poverty and then patting themselves on the back for helping to solve global poverty by stating that the world poverty situation is improving because the enormous numbers of people spending $2 a day or less to survive are decreasing. This metric is such a disingenuous metric to measure “poverty relief” because it never accounts for real rates of inflation and soaring costs of food, water and energy . for those living in poverty. Thus, the enormous numbers of people that are no longer spending $2 or less per day is a consequence of inflation created necessity, not a statistic that signals that the war on poverty is being won.
According to a journal called the Labor Review published by the US Department of Labor in the late 1920s, here were the prices of various food items in Atlanta, Georgia, USA:
One pound of rib roast $0.36 cents, one pound, leg of lamb $0.40, one pound of pork chops, $0.38, a pound of cheese $0.37, a pound of corn, 4.3 cents, a pound of rolled oats, 8.8 cents, a pound of potatoes, 3.4 cents, and if you really wanted to splurge, you could buy a pound of sirloin steak for $0.48 a pound.
Thus, you could feast like a king spending $2 a day back then, and might have been considered poor if you were living on $0.50 or $0.60 a day back then. How many people think it would be ludicrous to keep the level of poverty in America today as anyone living under $0.50 a day simply due to massive inflation of the US dollar that no longer makes a $0.50 daily expense rate an accurate measure of those living in poverty in America. Then why does no one challenge these idiotic bankers that keep the definition of global poverty in poor nations at less than $2 a day of income? If they actually adjusted the income for real rates of inflation, then their reported numbers of global people living in poverty may double or triple or even quadruple.
Thus when I look at the noble prize in economics and I don’t dismiss the incredibly important work of the three people awarded the prize who pioneered new ways to fight global poverty by focusing on smaller, more manageable issues like education or child health. The fact is that even though the work they accomplish improves lives and saves lives, and thus the incredible significance of their work to real world results cannot be overlooked or dismissed, the political motivation of an award of a Nobel Peace prize keeps focus turned away from the biggest contributor to global poverty – the global Central Banking system – and that is why I call the award still an incredibly political award. To listen to the rest of my argument for why I believe the Nobel Prize for economics this year distracts attention away from, to a much greater degree, than it contributes to a much more realistic comprehensive approach of solving global poverty, please watch this video.