The Reason for Existence of Poverty in Some Nations in 2020
Even though it was perceived in the past that numerous countries would achieve economic prosperity in the twenty-first century, poverty remains prevalent in a number of them. In particular, some nations are still struggling with stagnated economies as of 2020. The present economic problems in many global nations can be attributed to factors such as poor quality of education, reduced technological advancement, geographical locations, distinct detrimental cultures, and political instability.
Some of the world countries are presently poor because they lack quality education necessary to spur robust economic growth. Poverty in the poor world nations has largely been facilitated by low levels of education. In essence, minimum education standards result in a large number of unskilled and unproductive workers who earn low income and do not facilitate economic growth. Besides, low education outcomes result in reduced entrepreneurial activities, invention, innovation, investment, and sophisticated trading initiatives, thereby leading to economic growth. The low education standards in some of the poor nations in continents such as Africa, Asia, and Latin America can be attributed to minimal diffusion of knowledge and harsh political climates. According to Easterlin, “The global distribution of modern economic growth has relied majorly on the diffusion of specific knowledge regarding emergent production techniques” (1). In particular, unequal knowledge diffusion and educational standards have predisposed some third world nations to experience sustained economic difficulties and economic growth. For instance, the development and advancement of formal education in the 25 largest global countries has greatly depended on the nature of their ideologies and political conditions (Easterlein1). In this regard, nations that endure positive political atmosphere and peace have well-established education systems that propagate innovation, entrepreneurship, investment, and economic growth.
Also, poverty in several global nations has resulted from the rapid technological advancement of technology in a small number of countries, making the latter have economic and trade advantage over those with less developed technologies. In particular, limited technological diffusion has led to rich nations that have huge tech companies controlling a significant percentage of global inventions, innovations, communication, industrialization, and other production activities (Easterlin 4). Moreover, this differential transfer of technology explains why nations with greater technological advancement exhibit high rates of employment, entrepreneurship, and economic growth compared to those having less developed technology. The rate of technological advancement is dependent on that which the nation and citizens embrace the technology. For instance, nations in western and northern Europe advanced faster than the rest of the parts, and are leaders of economic growth today (Easterlin 7). Additionally, the United States in North America and Argentina were also quick to embrace technological advancement during the industrial revolution, making them richer than other nations in the region to date (Easterlin 7). This establishes that despite the rapid technological advancement in the present world, nations that had prior access to technology or embraced it faster are richer and have greater rates of economic growth compared to those lagging in technological development.
Additionally, the distinct geographical locations of nations explain why some nations are poorer than the others in 2020. For instance, nations that have proximity to rich natural resources such as minerals, oil, rich arable land, and attractive tourist scenery are bound to be wealthier than those with the scarcity of natural and essential resources. However, access to large natural resources can lead to laziness and corruption and propagate reduced economic growth, as presently witnessed in the Democratic Republic of Congo. For instance, Britain rapidly achieved economic growth during the industrial revolution primarily because it lacked some of the essential natural resources and had to look for them elsewhere, spurring invention, innovation, risk-taking, and commerce (Landes 30). On the contrary, the Portuguese and Spanish nations had easy access to silver and gold, hence had less intensive to work hard, making them trail Europe on economic growth (Landes 30). This establishes that poverty not only emanates from lack of essential natural resources but also easy access to resources while lacking the intensive to effectively utilize them in propagating individual and national economic growth.
Furthermore, the distinct cultures of nations dictate the levels of economic growth as well as poverty incidences in the 21st century. For instance, nations that are rampant in detrimental cultures such as corruption lag behind in terms of economic growth. In particular, detrimental cultures are the chief inhibitors of economic change and growth. According to Landes, the disadvantageous Japanese culture entailing isolationism, institutional rigidity, and minimal work ethics hampered their economic progress compared to that of Western Europe during the industrial revolution period (32). Also, numerous global nations lag economically presently due to a lack of effective government institutions which facilitates rapid productivity rates (Landes 34). For instance, Europe surpassed Russia and China in economic growth during the industrial revolution as a result of establishing an enabling environment for production and market competition.
Moreover, a majority of poor nations in the present world can trace their economic problems to political factors. Presently, it is noteworthy that countries that face political insecurities, civil wars, and rampant political disagreements experience stagnant economic prosperity and risk high poverty levels. This is because political problems result in property destruction and loss of vital human labor in war as well as an unfavorable environment for education, investment, entrepreneurship, and technological advancement. For instance, a majority of African nations continue to languish in poverty primarily the economic ripple effects of colonization by the European nations (Michalopoulos & Papaioannou 1). Additionally, “the colonialists roughly demarcated the borders of African nations resulting in border disputes which inhibited fruitful regional economic cooperation, for instance, the conflict between Burkina Faso and Mali” (Michalopoulos & Papaioannou 5). Stemming from the scramble for Africa, numerous ethnicities were separated leading to regularly conflicting minorities and majorities and thereby creating a harsh political climate that has propagated stagnated economic growth in many African nations to date (Michalopoulos & Papaioannou 6). This confirms that nations that face political instability are highly likely to face poverty.
In sum, the present poverty cases in some global nations can be traced to aspects such as poor quality of education, reduced technological advancement, geographical locations, distinct detrimental cultures, and political instability. In this regard, national governments of poor nations need to pursue peaceful politics, embrace technology, promote quality education, and facilitate positive business, entrepreneurship, and investment culture.
Chinas Fall behind Europe in the 19th and 20th Century and its Economic Boom in the 1970s
In the 19th and 20th Century, China trailed West and Europe in terms of economic growth. In particular, China possessed the chance of marching Europe’s economic growth by developing a consistent technological and scientific breakthrough that conformed to their traditions and learning from the sophisticated technology of the Europeans. However, China failed to catch up with the economic and technological progress of Europeans and the West because of its conservativeness, totalitarianism, communist culture and interference of private enterprises, rejection of foreign technology, and lack of a free and integrated market. Consequently, China achieved rapid economic growth in the 1970s as a result of pursuing economic reforms that empowered scientific development and technological advancement, facilitated individual economic growth and entrepreneurship, and propagated multiple bilateral trade agreements.
China’s totalitarianism, conservative culture, and interference of private enterprises prompted its failure to keep up with Europe. In particular, “China lacked institutional property rights and free-market” (Landes 6). Besides, China discouraged invention and innovation by constantly manipulating prices, inhibiting or prohibiting particular private production activities, and striving to control natural resources such as the iron and salt from public access. China’s detrimental conservativeness, Ming laws, and Confucian beliefs also facilitated its failure since it disapproved of self-enrichment, maritime technology, and social mobility which further stalled economic growth. Instead, China chose abortive technology to achieve total control over its citizens without realizing the significance of scientific developments to the welfare of its economy (Landes 9). Contrary to China, Europe did not interfere with private enterprises and scientific innovations and had a free market, while their transformation was propelled by the advancement of Christianity (Landes 9). Moreover, Europe manifested joy in and propagated discovery, particularly due to their religious beliefs in the fruits in discovery after hard labor. In this regard, it is evident that China’s totalitarianism culture impeded scientific development and minimized its technological and economic advancement during the nineteenth and 20th century.
China failed during the industrial revolution as a result of rejecting foreign technology. In particular, China perceived a majority of incoming European technology as belittling and strange, hence was reluctant to embrace it ((Landes 17). Moreover, the Chinese mindset was utterly opposed to the efficacy, truth, competitiveness, and urgency of European technology. For instance, Qianlong successor sent a letter to Europe establishing that “My dynasty attaches no value to products from abroad ((Landes 17). This confirms that China’s sense of self-sufficiency and superiority predisposed it to failure in catching up with the rapid scientific and technological advancement pursued by Europe and the West during the 19th and 20th centuries.
Furthermore, China did not keep up with Europe during the industrial revolution due to its lack of well-integrated markets. In particular, Western Europe industrialized faster than China. Western Europe had excellently operating markets that were supported by well-established institutions as well as investment incentives (Shiue & Keller 1189). Even though the two countries were well a par in terms of market and trading of goods, Europe surpassed China in market integration and strength during the industrial revolution.
However, China primarily experienced rapid economic growth in the 1970s due to the enactment of free trade policies as well as the promotion of foreign investment and growth. Previously, China’s economic growth had been largely stagnated by an isolated, greatly inefficient, centrally managed, stalled, and poor economy. Consequently, China’s economy assumed renewed growth due to its vibrant support for scientific development and technological advancement. Also, China assumed a rapid expansion of its economy by opening up new bilateral trade ties. Before the 1970s, China had sustained a firm control, command, and plan over its economy, in which a significant percentage of the nation’s economic activities were regulated by the state. To keep up with the rapidly expanding economies such as Europe and North America, China resolved to largely invest in human and physical capital and embrace science and technology to reap from the industrial revolution. Moreover, Chine shifted from its stringent objectives of becoming self-reliant and sufficient to pursuing several economic treaties with regional and international nations (Brandt, Ma, & Rawski 95). In particular, China pursued fiscal decentralization, globalization, replenishing state enterprises, and upscaling globalization (Brandt, Ma, & Rawski 96). Furthermore, China’s economic growth in the 1970s emanated from increased empowerment of private enterprises and innovations, thereby improving the purchasing power parity of its citizens. Moreover, “Chinese reformists strived to replenish state enterprises by injecting emergent technologies, flexibility, and incentives” (Brandt, Ma, & Rawski 96). The decentralization of China’s control over the local companies was facilitated by its economic reforms in the 1970s in which it offered ownership and price incentives to farmers, entrepreneurs, and businessmen. In this regard, it is evident that China’s shift from totalitarian and conservative nature helped it achieve rapid economic growth and become one of the most advanced economies worldwide.
In sum, China economically lagged behind Europe and the Western nations during the 19th and 20th century mainly due to its conservativeness, totalitarianism, interference of private enterprises, refusal of foreign technology, and lack of a free and integrated market. Contrastingly, Europe facilitated private and public scientific and technological initiatives, positively embraced innovation, and had a well-interacted market which enabled it to experience rapid economic growth. Consequently, China finally attained robust economic growth in the 1970s from enacting economic reforms that boosted technological advancement and scientific development, facilitated individual economic growth and entrepreneurship, and propagated multiple bilateral trade agreements.
Works Cited
Brandt, Loren, Debin Ma, and Thomas G. Rawski. “From Divergence to Convergence: Reevaluating the History Behind China’s Economic Boom”. Journal of Economic Literature, 2014, vol. 52, no. 1, pp. 45-123
Easterlin, Richard A. “Why isn’t the Whole World Developed?” Journal of Economic History, 1981, vol. 41, no. 1, pp. 1-19
Landes, David S. The Wealth and Poverty of Nations: Why some are so rich and some so poor. New York: Norton, 1999, pp. 29-59
Landes, Davis S. “Why Europe and the West? Why not China?” Journal of Economic Perspectives, 2006, vol. 20, no. 2, pp. 3-22.
Michalopoulus, Stelios, and Elias Papaioannou. “The Long-Run Effects of the Scramble for Africa”. American Economic Review, 2016, vol. 106, no. 7, pp. 1802-1848.
Shiue, Carol H., and Wolfgang Keller. “Markets in China and Europe on the Eve of the Industrial Revolution”. American Economic Review, 2007. vol. 97, no. 4, pp. 1189-1216