[ Question ]

Systemic change, global poverty eradication, and a career plan rethink: am I right?

by NoteworthyTrain13 min read14th Jul 202039 comments


DISCLAIMER: These are fresh thoughts, and I might change my view. If you're reading this, please don't assume it still reflects my views.

(This is my first EA Forum post, so please guide me about what I can do better.)

TL;DR I wanted to be a social entrepreneur, but the social impact of systemic changes to the global economy through policy seems much greater than that of even the best entrepreneurship due to the global economy's current inequity. As a result, I think I should become some sort of economist / economic policy adviser instead. Am I correct?

I recently read Jason Hickel's 'The Divide', and it has significantly challenged my views on economic development and what I should do with my career. The book is a polemic against the dominant narrative in global development: that poverty is decreasing, thanks in significant part to the generous efforts of rich countries.

I am an undergrad student in PPE (Philosophy, Politics and Economics) at Oxford. All going well, I will graduate next year.

This post has quite a lot of background. As such, I will split it into four parts:

  • Hickel's 'The Divide': an overview of some of the claims in it that I find most compelling
  • The relative impact of systemic policy change and (social) entrepreneurship
  • A crude assessment of my interests, strengths, and weaknesses
  • Cause prioritisation and personal next steps.

This is, of course, a huge amount. I will do my best to summarise, and I know that in doing so I will miss important considerations. It's also a scrappy first attempt. I would like to hear what you think of my reasoning and conclusions before diving deeper and researching in much more depth.

In particular, I invite you to disagree with me. In fact, I'd like you to play 'devil's advocate', since I think that the EA community generally holds policy work in very high esteem, making it harder to find good arguments against working in policy than might be justified.

Hickel's 'The Divide'

'The Divide' is a tour de force, discussing colonialism, neocolonialism, and ecological destruction. I don't agree with all of it, and I'm concerned that it has a very strong agenda and may cherry-pick cases. I might write a much more detailed post in a week or so, once I've read some more on the subject. (Let me know if this would interest you!)

Basically, Hickel argues that poverty is getting worse, not better, and this is as a result of multiple waves of (neo)colonialism that place poor countries in the global economic system on unfair terms - so much so that 'developing' countries continue to lose out in order to further develop 'developed' countries.

Certain reforms (involving not Marxism, but a fairer and more moderated capitalism) are necessary to change this, and without these reforms the modern development agenda isn't going to work.

Here, I will mention two claims made that I find particularly compelling and interesting:

1) The number of people around the world in absolute poverty is increasing, not decreasing.

Although I have found evidence that average incomes are rising, the number of people who are in absolute poverty seems to be increasing, not decreasing. This suggests that global development is not working, at least insofar as its role is to reduce poverty.

Why, then, do the data seem to show reducing global poverty? Here are some reasons:

(a) Moving the goalposts

The 1996 Rome Treaty on poverty reduction was in terms of absolute numbers in poverty, whereas the UN's Millennium Development Goal (MDG) was to halve the proportion of the population in poverty, which is easier to achieve given population growth.

(There's genuine debate as to which matters - I think of the question of total vs average utilitarianism in population ethics - but it's depressing that both aren't decreasing, given the recent efforts from rich countries in the name of development.)

Furthermore, the proportion declared relevant for the purposes of the MDG was taken as the proportion of absolute poverty in developing countries. Since developing countries have higher-than-average population growth, this made the target yet easier to achieve.

(b) Moving the goalposts, part 2

The reference year of analysis was moved back from 2000 to 1990, allowing the exceptional poverty reduction in China (before the campaign even started) to be taken into account.

(c) Use of one international poverty line, made weaker every so often

By using an International Poverty Line (IPL) based on a threshold for absolute poverty in the 15 poorest countries in the world, it was not only poverty just above the line in those countries that was ignored. In somewhat richer (but still poor) countries, the line was far too low.

Even (figures from) the World Bank (?) have criticised the poverty line as being far too low, and many economists have proposed that it be increased. The $5-per-day poverty line often recommended - some recommend higher - would put over 4 billion people in poverty. The IPL is revised upwards every so often, but (Hickel claims) it is actually being reduced in terms of real purchasing power parity value: what someone at the IPL can afford to buy.

Papers like this one, from a UN Special Rapporteur, confirm this view on poverty. I intend to research the truth of this claim and the sub-claims about measurement in more detail, but for now am assuming that they are true.

Hickel argues that similar processes of statistical 'doctoring' have led to misleading stories about reductions in world hunger. He claims that, although there have been some success stories (such as in East Asia), the 'good news story' about global development is false.

2) Neocolonialism causes huge economic devastation in poor countries, far outweighing international aid

I doubt it will be a fringe view on this forum that Western colonialism tended to cripple poor countries' economies, or that certain European and US interventions (like the Iraq War) led to huge devastation. It might not also be an unusual view here that the World Bank's Structural Adjustment Policies (SAPs) at least sometimes were detrimental to economies that took their loans.

However, the scale of neocolonialism suggested by Hickel was much greater than I had thought.

(a) Neocolonialism by coup

I was shocked by the sheer number of European and US invasions of sovereign nations from the 1950s onwards because they threatened Western interests. These were countries that aimed to develop by investing in things like education, healthcare, housing, and 'import substitution' (prioritising manufacture of finished products, so as not to be dependent on relatively expensive Western imports).

I think Hickel might be ignoring some of the problems of the regimes in question, but I would be very surprised if all the cases he mentions (listed below) had bad enough regimes to justify the violent intervention or support of dictators they received:

  • Iran (Mossadegh)
  • Guatemala (Arévalo)
  • Brazil (Goulart)
  • Guyana
  • Cuba (Bay of Pigs)
  • Dominican Republic
  • El Salvador
  • Nicaragua (Ortega)
  • Bolivia
  • Ecuador
  • Haiti
  • Paraguay
  • Honduras
  • Venezuela
  • Panama
  • Indonesia (Sukarno)
  • Ghana (Nkrumah)
  • Congo (Lumumba)
  • Uganda (Obote)
  • Guinea-Bissau and Cape Verde (Cabral)
  • Angola (Neto)
  • South Africa (supporting apartheid out of fear of Mandela, according to Hickel)
  • Cameroon
  • Gabon
  • Côte d'Ivoire
  • Nigeria
  • Guinea
  • Niger
  • Congo Brazzaville
  • Central African Republic
  • Burkina Faso

(b) Neocolonialism by debt

After coups fell out of fashion (they tended not to be popular with electorates), debt was used as an instrument of control. Volcker's focus on reducing inflation at all costs massively increased the interest rates on variable-rate loans made by Wall Street banks to poor countries.

Instead of letting the banks lose out on risky loans they had made to poorer countries by allowing those countries to default, the World Bank imposed Structural Adjustment Policies that, Hickel argues, deprived poorer countries of the opportunity to develop in the way that rich countries had: by protecting their infant industries, building up social safety nets, etc.

Instead, countries had to sell off and privatise assets (often for a fraction of market value, transferring resources to rich countries) and had to pay off debt before all else. Why didn't these countries default on their debt? Hickel claims that they knew to expect retaliation and were scared into submission by the West's long history of coups.

For illustration, Sankara ('affectionately known as Africa's Che', p.179) once made a shocking speech in which he denounced debt. He said:

'Our creditors are those who had colonised us before. They managed us then and they manage us now. But we did not ask for this debt. And therefore we will not repay it. Debt is neocolonialism. It is a cleverly managed reconquest of Africa. Each one of us becomes a financial slave. We are told to repay. We are told it is a moral issue. But it is not. The debt cannot be repaid. If we don't repay, the lenders will not die. That is for sure. But if we do repay, we will die. That is also for sure.' (quoted from Hickel p.180)

Three months later, Sankara 'was assasinated in a coup widely believed to have been backed by France', resulting in dictatorial rule.

(c) Neocolonialism by unequal trade terms

If the reaction to violation of trade norms is an economic sanction, then rich countries will be able to exert power on poor countries in a way that poor countries cannot exert power on rich countries.

Hickel suggests that, as a result, the World Trade Organization (WTO) rules requiring trade liberalisation unfairly hurt poorer countries. For example, farmers in sub-Saharan Africa starve because their produce is undercut by below-cost competition from Europe and the US, where farm subsidies exist in contravention to WTO rules. Sub-Saharan Africa has little power to fight back, since the sanctions of Chad, for example, will barely be noticed by the US.

Systemic policy change and (social) entrepreneurship

For at least the last five years, I've wanted to set up my own business. (I've been involved in some 'nonprofit startups', in a broad sense, since then.)

I hoped that I could make a significant social impact both directly (social entrepreneurship) and by making a large amount of money that I could then donate to high-impact causes.

I had been concerned before that this might be missing out on systemic change to tackle root causes of problems. But I assumed that entrepreneurship might be able to do this too, and, given my uncertainty in how to go about achieving systemic change (and what change I wanted to implement), I figured my near-certainty that I wanted to found a startup should dominate in making my decision.

But now that hand-wave is no longer convincing. I sent a message to a friend recently (edited very slightly for clarity) that summed up my thought:

I wanted to believe that social entrepreneurship would make the world far better. Relatively speaking, though, affordable farm equipment leasing in sub-Saharan Africa won't help much if farmers there are systematically undercut by below-cost subsidised exports from Europe and the US, when the WTO prohibits such subsidies (but these countries have no real power to sanction, so Europe and the US have impunity).

Without changing the systems that cause poverty, it seems very inefficient to focus on relieving the symptoms. Even schemes that aim at the long-term, like those that improve incomes, seem generally less efficient than dealing with causes like crippling debt. (This relies on such systemic change being feasible.)

I think there are many people who have the mental model I used to have: that global development has been hindered by colonialism, by some devastating conflicts like the Iraq War, and by certain policies of rich countries, but that overall poverty is declining and modern efforts at international development have been working.

Fitting the pieces of the puzzle together to give a picture of 'de-development', where money flows from poor countries to rich countries as the direct result of policies that rich countries make, sometimes explicitly, has made me sceptical of the value of malaria nets and local or even national social enterprises. These seem to have a very small impact compared to the impact of changing the system.

How could the system be changed? Hickel offers some suggestions, including some compelling ones that I think would be achievable despite the existence of vested interests against them:

  • Debt default for poor countries to allow them to develop. (Remember, the debt was only taken on in many cases because the countries had been plundered by colonialists.)
  • Increased redistribution to reduce need for perpetual exponential growth, which Hickel argues is ecologically impossible. (He is a supporter of the controversial de-growth movement; please share resources for or against de-growth - not sure how we could avoid de-growth at some point, so I'm curious what sensible arguments there are against it.)
  • Switching (relatedly) from GDP to GPI (or similar) as a national performance index.
  • Firmer regulation around tax havens. Hickel argues that tax corruption from Western corporations is far greater in financial value than the government corruption for which poor countries are criticised.

Another I would add is to abolish agricultural subsidies in the US and EU. Although this would meet with significant corporate opposition, these subsidies are not in voters' best interests and so could be out-voted.

The scale of the benefit from these changes is potentially huge - much bigger than pretty much any enterprise I can think of. Google, Facebook, or the world's leading social enterprises don't seem to be making these sorts of systemic changes - because they can't really, I think. Please correct me here if you think I'm wrong!

What about neglectedness and tractability?

I should firstly point out that I think neglectedness may be overemphasised; sometimes, I feel that certain fringe EA causes (fish welfare, perhaps) are emphasised mainly because of their neglectedness. To me at least (perhaps a blatant species-ist) I would much rather aim to eliminate poverty than enable fish to live happier lives. This may be my bias.

As for tractability, as mentioned earlier I think these issues can be solved. Yes, powerful vested interests may be against the reforms above, but the most powerful countries still have sufficient democratic control, despite the power of lobbying.

At times of great challenge, such as our current climate crisis, radical policies can be made that harm vested interests. We saw this, in my understanding (not an expert) with the abolition of slavery. If we could abolish slavery, it seems plausible that we could abolish agricultural subsidies!

At a personal level, I will soon be an Oxford PPE graduate. Having specialised in economics, I have been told by one of my tutors (professors) that I wouldn't have a huge amount of difficulty getting into Oxford's MPhil in economics. From there, I think I could plausibly obtain a PhD from a top UK or US university, and head out into some area of policy / advocacy directly or via academia. The next part discusses tractability at a personal level in a little more detail.

Some relevant stuff about me

This part isn't really about how I hope to achieve changes like the ones mentioned above. As to that question, I am very unsure. Instead, this part gives you some information about what I like and where I think my strengths and weaknesses are.

I would really appreciate ideas and advice based on the thoughts here.

1) Economics, mathematics, and academia

I have generally achieved strong results in economics, despite working only moderately hard (and occasionally working very little). This suggests that, if I were to work harder in economics, I could do very well by conventional criteria and use those results (e.g. final exam results) as leverage to build career capital. It might also suggest that I could be a good economist - I hope so.

Economics is not the only route to systems change. Law is another, for example. I get the impression that economics provides more options because it can be quite quantitative, whereas law is not usually quantitative. If I decided to focus on something different, Economics might be more flexible as a graduate degree to hold.

Fortunately, I know a lawyer who has achieved significant social change. I will talk to her about law as an option, being aware that she may have a pro-law bias.

My ability in maths is quite strong, but frankly unexceptional. It seems like it wouldn't be my comparative advantage to focus on a particularly quantitative field, unless it also required a rare skillset or understanding that I had (e.g. a neglected but important field of economics that requires some skill that most people with high quantitative skills currently lack).

I've often thought I wouldn't be a good fit for academia. But my teachers, parents, and friends, and one of my tutors (professors) seem to disagree and think I would be a very good fit. I like asking challenging questions and think I have a relatively analytical mind.

I also think that my writing skills are reasonably strong. (You can be the judge, although this post is more like thought spaghetti anyway!) I think I could see myself writing popular economics books.

2) Bureaucracy, formality, and directness

I'm not very keen on bureaucracy, and usually not very keen on formality either. I do not think I would make a very good diplomat.

I like to be very direct and do not like to be dishonest. Sometimes, I am too direct, speak before I think, and offend people. I try to avoid this and think I am doing this much less often than I used to (and still progressing).

Given my directness, I think I would struggle to back a party line that I disagreed with very significantly. This, and my desire to be honest, make me think I wouldn't be a good fit for party politics, despite the obvious advantage of Oxford and PPE in the UK political system.

3) Autonomy and feedback length

I think I would dislike any career where I lacked sufficient autonomy. I think this is why I wanted to be an entrepreneur: being in charge of creating something that didn't exist before doesn't just allow an impact to be made; it allows you to make an impact. This might not matter morally, but it definitely matters for me with respect to personal fit.

This is tied to the concept of feedback length. Advocacy is a long game, and I am concerned that you often fight for a long period of time and it is difficult to track your efforts. The fast-paced startup environment of fast feedback loops excites me; honestly, slow and bureaucratic meetings do not.

As a result, I don't think I would make a good fit for the civil service, despite being (I hope) sufficiently competent.

4) A 'personal pull'

For years, I have felt a 'personal pull' towards entrepreneurship of some sort, although I have not been sure what exactly. Maybe this is too much romanticism, but as a result I wanted to at least test personal fit for entrepreneurship in my 20s, and had designed my career plans around that.

The plan was to gain career capital through work in something very flexible like strategy consulting (or possibly investment banking), then quit after a predetermined maximum number of years to start startups and keep going unless I realised I didn't like it.

Abandoning this plan is difficult to swallow for me. Ignoring impact, I don't know if I'd be more effective in entrepreneurship than in policy, but as it stands I imagine I'd be much more excited about entrepreneurship. I've been forced to seriously consider this switch because I think that the impact of systemic change far outweighs that accessible to traditional entrepreneurs (even 'social entrepreneurs').

Charity entrepreneurship remains an option. I've enjoyed creating small nonprofit initiatives. However, I'm sceptical of charity entrepreneurship's ability to achieve systemic change - and I'd probably (correct me if I'm wrong) need a graduate degree in economics to tackle the global economic system. (Well, I probably wouldn't in practice, but I think I'd need an advanced degree to be taken seriously in a society where you are judged based on brands and certificates!)

I think the best option is to become a public- and/or political-facing economist in development or a related field, advising governments or lobbying related political groups to improve the global economic system.

Cause prioritisation & personal next steps

If Hickel is right, what follows is not just that changes to the global economic system are necessary but that the nature of global development is misunderstood. If I can change both these things (I'd be open to and enjoy writing popular books, for example) my impact could be very large.

I want to read some more about cause prioritisation first, but it seems that an economics background would equip me well for tackling other cause areas (including Global Priorities Research) affecting policy if I were to come to believe they were more important.

From a longtermist perspective, the global economy's inherent ties to ecological sustainability and the time-sensitive nature of irreversible climate damage suggest that reform is essential.

In any case, systemic reform seems much more important than what I could accomplish as even an exceptionally successful social entrepreneur. Is this correct?

There is always a risk of unintentional harm, but it seems like much greater harm could arise from leaving the global economy exactly as it is than from trying to change it (in incremental and moderate ways). I am not proposing communism; I am proposing a rethink and moderation of capitalism to serve people, particularly the poorest people.

My next steps are to talk to intelligent friends and connections (including a former economist at a major international organisation) about Hickel's work, and to read and research much more to understand development better. I might also try to find some research opportunities for skill and academic CV development.

Before that, I want to know what you think.

I know this post, while long, is very much incomplete. It is a first pass at thoughts that have come to me all over just a few days.

Main reasons I might be wrong, in a guessed order of likelihood/concern:

  • I have poor personal fit, meaning that I would have a relatively lower impact in careers related to policy than in careers related to entrepreneurship
  • I'm underestimating the positive potential of social entrepreneurship to create social impact, either within or outside of systemic change
  • The types of systemic change I'm considering would in fact have minimal or negative impacts, or are inadvisable given uncertainty and possible significant negative downside
  • The types of systemic change I'm considering are likely to be too intractable to have a high expected impact

Things I would massively appreciate:

  • Ideas and critiques of anything I've said (major parts of Hickel's arguments, superiority of systemic change over social entrepreneurship, personal fit, plans)
  • Thoughts on dealing with the mental pressure of switching away from something I've wanted to pursue for a long time, and/or ideas about incorporating an entrepreneurial approach to the study of economics and influence of poverty
  • General ideas about optimal career planning, particularly from those who have pursued postgrad studies in economics
  • Books or articles that I should prioritise reading - I feel like a muggle
  • Connections to anyone in development economics or related fields who would be willing to chat to me

Thank you!

p.s. I apologise if I have offended anyone or said something egregious, wrong, or egregiously wrong! Please don't take me too seriously at this point, since these are early thoughts.


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2 Answers

However, I'm sceptical of charity entrepreneurship's ability to achieve systemic change - I'd probably (correct me if I'm wrong) need a graduate degree in economics to tackle the global economic system.

It might plausibly be helpful to hire staff who had graduate degree in economics, but I think you would not necessarily need a graduate degree in economics yourself in order to start an organization focused on improving economic policy. Of course it's hard to say for sure until it's tried - but there's a lot that goes into running an organization, and it takes many different skills and types of people to make it come together. Domain expertise is only one part of it. A lot of great charities (e.g. GiveWell, AMF) were started by people who didn't enter with domain expertise or related degrees. (None of which is to say that economics isn't a strong option for a variety of paths, only that you shouldn't put the path of starting an organization in the "I need a degree first" box.)

(As for my opinion more generally, I do think that social entrepreneurship would under-perform relative to purely EtG (if you give to the right place), and also under-perform relative to focused non-profit or policy work (if you work on the right thing), because it has to simultaneously turn profit and achieve impact, which really limits the flexibility to work on the higher impact things. But it primarily depends on what specifically you're working on, in every case.)

Hi, let me try and give some feedback on your career plan:

Your career plan sounds great!

• I think the thing the world is missing right now is a good understanding of how to create sustainable systemic change. I think an econ qualification with the aim of producing really high value research on issues that are pertinent to how to bring countries out of poverty would be a really high value action, and doing this kind of work is near the top of my to do list too.

However I would caution:

• Explore whilst you are young. The path sounds like it would be good for impact but I think it is important to work in the area where your strengths match. And you should think about ways to explore your strengths. This could be by getting a job and doing a Masters course part time or doing internships over the summer or doing something else for a year etc.

• Similarly, many of the academics I think are best at creating really useful research have some experience outside of academia in creating change. Eg: taken time out from academia to run for a political position or work in politics. You can get experience in a field that is pertinent to how change is created then you might be better able to address the problems. Also at some point in the future when you have a clearer idea to solutions you might want to pivot from academia to starting a campaign or a social enterprise etc so other experience is useful.

Hope that helps