Why the poor countries do not overcome its poverty? Political economy

"When public money is stolen for private gain, it means fewer resources to build schools, hospitals, roads and water treatment facilities. When foreign aid is diverted into private bank accounts, major infrastructure projects come to a halt. Corruption enables fake or substandard medicines to be dumped on the market, and hazardous waste to be dumped in landfill sites and in oceans. The vulnerable suffer first and worst."

UN Secretary-General.  UNDP, Democratic Governance. 23 April 2011.

Index

1. Overview
2. Ancestral attitude of man
3. Material conditions
4. Natural resources change
5. Distribution of wealth
6. Least developed countries
7. Income and development
8. National currencies and international currency
9. The United States has no external debt
10. Value and support of the national currencies
11. Gold value
12. The external debt is the main obstacle for the development
13. Corruption, a source of the world’s poverty
14. Lack of efficiency
15. People’s attitudes and development
16. A contradiction: the United States poverty
17. The Neo liberalism was imposed to the undeveloped nations
18. The extreme liberalism also affects the United States
19. What to do

1. Overview

The majority of the world population is poor. Only a small group of countries concentrate the world wealth. Why does this happen? There are diverse opinions on the theme. Some researchers assure that it is a problem of intellectual capacity. Others say that the wealth is a consequence of the attitude regarding the work. But I consider that the poverty is a consequence of two limitations: a) the man attitude and b) the material conditions.

In the year 2000, the world leaders defined a program of 8 points to improve the economic and social conditions of the world population; this program was named the Millennium Development Goals and their objectives are: 1. Eradicate extreme poverty and hunger, 2. Achieve universal primary education, 3. Promote gender equality and empower women, 4. Reduce child mortality, 5. Improve maternal health, 6. Combat HIV/AIDS and other diseases, 7. Ensure environment sustainability and 8. Develop a Global Partnership for development.

Between the years 2000 and 2011 has been achieved some important progress in some countries but the most still remain in a precarious condition. Why does this occur? To understand this, it is necessary to considerer some key aspects of the man history.

2. Ancestral attitude of man

Since the beginning of the times, a small group of men took for them the principal wealth that is the Earth. They became landlords by mean of the appropriation, the robbery of the land. That is the origin of the wealth accumulation. This fact, in turn, determined the born of the social classes.

The phenomenon of the land appropriation occurred in all the societies.

Egoism is the feeling that predominates in the majority of the human beings and was the feeling that motivated the first wealth accumulation. This feeling is the cause of the most problems of the world: poverty, damage to nature and the environment, social violence and war.

3. Material conditions

Some regions of the world are privileged while others not. The abundance, scarcity or lack of natural resources determines the poverty or the richness of nations. Notwithstanding, it must be highlighted that there are countries do not privileged in natural resources that are rich, Switzerland and Japan, for example. Why does this happen? The answer is very simple: because in the modern world the money is employed as mean of change for obtaining all the goods that exist and who possess money can buy the resources and everything. 

4. Natural resources change

But the availability of natural resources is changing, as a consequence of three factors: a) the overexploitation, b) the pollution and c) the climate change. These restrictions set in peril the Millennium Development Goals, MDGs.  

Every day the signs of scarcity appear in many regions of the world. This means that, at mid term, the possession of money will be not enough for obtaining natural resources. This already has happened in some periods of history, for example, in times of war. During the Second War, the availability of resources was restricted and it was decisive for the Hitler’s and Japan defeat. In that time, a piece o bread was more valuable than a diamond or an amount of gold or money.

The Food and Agriculture Organization, FAO, are warning about the impact of the climate change and the pollution on the food production. In the last months, the food prices have suffered an important increase; this reveals the food trends. The price of the goods demonstrates its scarcity or abundance. So that the availability of natural resources is key for the poverty overcome. Until now it has been possible for the nations less favoured in matter of natural resources to buy them in the international markets, but if the situation of scarcity acquire a most intense form, it will be not easy for those countries to get the scarce resources.

It is necessary to underline that the food price is influenced by a key input: the oil price. In the last decade this has experienced an important augment and the perspective is of a sustained trend in that same sense.

Other important situation that deserve be mentioned is that there are two other facts that affect the food security; they are the food loss and the food waste.

In a Report entitled Cutting Food Waste to Feed the World, of 11 May 2011, FAO assure the following:

“Roughly one third of the food production in the world for human consumption every year ---approximately 1.3 billion tones gets lost wasted.

Food losses ---occurring at the production, harvest, post-harvest and processing phases--- are most important in developing countries, due to poor infrastructure, low levels of technology and low investment in the food production systems.

Food waste is more a problem in industrialized countries, most often caused by both retailers and consumers throwing perfectly edible foodstuffs into the trash.”

End of the quotes. Available in Internet in:

http://www.fao.org/news/story/en/item/74192/icode/

5. Distribution of wealth

The same that has happened inside the countries also has passed between the nations; this mean that the strongest countries invaded the less developed and weak nations and this fact caused the economic preeminence of the formers. The wealth of the European nations ---in good part--- came from America, came from the slavery, from the appropriation of the American lands and the overexploitation of its resources. For example, all the gold and silver obtained by the European countries during the 16^th and 17^th centuries was taken in violent form from America.

In the interior of the less developed nations occurred a similar phenomenon. The privileged classes took for them the best lands and established the slavery. By mean of this process was consolidated the power of the rich classes in those countries.

In the modern world ---formally--- the slavery disappeared but in the true reality it still exist in many countries of the world; for example, currently there are nations, especially in Asia, where the workers work the 30 days of the month and their salaries do not pass $ 120 per month. Those are the new forms of slavery. There are international institutions that denounce these situations. Concretely, it exists denounces about the situation of slavery that suffer millions of workers in the industrial cities of China and other regions of the world. China has obtained a privileged position in the international commercial market because of the overexploitation of their workers. International companies have moved their activities toward China and other countries of Asia to obtain benefits of that unfair situation.

In the next table may be appreciated the situation of poverty in regions like East and Pacific, China, South Asia, India and Sub-Saharan Africa. A common fact for those regions is its overpopulation and this is a key factor that impulse its poverty.

Source: World Bank, Global Monitoring Report 2011, Improving the Odds of Achieving the MDGs, Box 1.1.

6. Least developed countries

Between 8 and 13 March 2011 in Istanbul, Turkey, United Nations realized the Fourth Conference on the Least Developed Countries. In an official document UN assure the following:

“Since 1971, the United Nations has recognized the Least Developed Countries (LDCs) as the “poorest and weakest segment” of the international community. Extreme poverty, the structural weaknesses of their economies and the lack of capacities related to growth, often compounded by structural handicaps, hamper the efforts of these countries to improve the quality of life of their people. These countries are also characterized by their acute susceptibility to external economic shocks, natural and man-made disasters and communicable diseases.

How many countries are the LDCs?

The current list of LDCs includes 48 countries: 33 in Africa, 14 in Asia and the Pacific and one in Latin America. Cape Verde graduated from the list at the end of 2007 and Maldives on 1 January 2011.

What qualifies a country to be an LDC?

The United Nations Committee for Development Policy (CDP) uses the following criteria to identify LDCs:

1) Low-income, measured by an average income per person over three years. An average income less than $745 per person per year is considered for inclusion, and above $900 for graduation;

2) Weak human resources, as measured by indicators of nutrition, mortality of children aged five years or under; secondary school enrolment; and adult literacy rate;

3) High economic vulnerability, measured by population size; remoteness; diversity of goods exported, share of agriculture, forestry and fisheries in the economy; instability of agricultural production; instability of exports of goods and services; and homelessness owing to natural disasters.

What are the main challenges facing the LDCs?

● High levels of poverty: More than half the 800 million people in the LDCs live on less than a dollar a day. Women in LDCs have a one in 16 chance of dying in childbirth, compared to one in 3500 in North America.

● Food insecurity: More than 300 million Africans, where 33 out of the 48 LDCs are located, are food insecure.

● Economic vulnerability: LDCs are highly dependent of external sources of funding, including official development assistance, workers’ remittances and foreign direct investment. This overly exposes them to external shocks such as the global financial crisis, which has had a severe impact on their economies.

● Environmental vulnerability: While they contribute least to climate change, LDCs are among the groups of countries most affected by climate change. Poor housing, over-dependence on natural resources and the lack of adaptive capacity all people in LDCs at a greater risk to the impact of climate change than people in other countries. Many LDCs are also small islands whose very survival is threatened by rising sea levels.”

End of the quotes. Available in Internet in:

 http://www.un.org/wcm/content/site/ldc/home/Background/quick_facts#11127

7. Income and development

The lack of income or the reduced scale of income is the material cause of the poverty.In the modern industrial world, the money is the mean through which the human beings get the goods and services that they require to satisfy its needs. In the pre-industrial society, the situation was different and the people had the possibility of changing goods by other goods or of to be self-sufficient in some activities. For example, the antique farmers had certain level of self-sufficiency; they were able of producing the food and some basic inputs employed in other basic activities of the life. But now, in the modern world, if you do not have money you cannot get anything. In this scenario arise a key question:  

Where does the income come from?First of all it is necessary to make a distinction between the income of the nations and the private person’s income; this last encompasses the income of the private business and the income of the individual people.In the case of the governments, the income comes from two sources: a) the tax system and b) the sovereign capacity of the states to issue money. In the case of the private persons (business and individuals) the income arises of different sources, like the government (public spend), the remunerations of the diverse private activities in the internal market and the remuneration of the exports to the external markets.

8. National currencies and international currency

The income is ever in money, national money or international currency. With the national money the governments and the private people of each country make the economic transactions inside of their countries.

Since the Second World War, the nations selected the dollar of the United States of America like the currency for the international transactions. This means that the U.S. dollar is the currency through which the world does the most international business.

Each country can issue its own national currency but they cannot issue currencies of other countries. However, it is necessary to say that the issue of national currency of the different countries should follow some international rules.

If a country or a private people do not have the international currency required to pay in the international markets ---and this is the dollar of the United States--- that country or person cannot realize international economics operations.

How the countries and the private persons do obtain the international currency, the U.S. dollar?The answer is: through the international mechanism of payments: you sell a good or service and the buyer pay you an amount in the international currency, the dollar. A minor amount of international transactions are made in Euros and in the national currencies of Japan and China. This means that you will have more or less international means of pay ---dollars--- depending of your ability to sell goods and services in the international markets.

The United States of America has the biggest advantage in the international finances and in the international commerce because its government can issue the U.S. dollar that is the international currency for the international interchange. None other country have this advantage. This means that the United States of America can acquire ---without limits--- all the goods and services that want in the entire world, because its currency is accepted worldwide. The rest of the countries do no not have this advantage. They must get the US dollar for making their international economical transactions.

The national governments of the rest of the countries are able only of to issue their national currencies.

9. The United States has no external debt

The reason is very simple: because the technical concept of external debt is the debt acquired in foreign currency. According to the international statistics published by the International Monetary Fund, the United States has no debt in foreign currencies reflected in the international financial statistics. The debt of the United States is in dollars of the same United States; this means that it is an internal debt because it is a commitment in its own currency. So that the people that talk about the burden debt of the United States are not right. It is not the same an external debt than an internal debt. The external debt represents a sign of weakness of the economy of the rest of the countries because they need foreign currency ---U.S. dollars--- to pay it and they do not have always the amount of money that requires. But for the United States the situation is completely different, because the United States can issue all the amount of dollars that need its internal economy because the dollar is its own national currency. Also it can issue the total amount of dollars that the international economy requires.

We must remember that the most international operations are made in dollars; therefore, the United States must fulfill the monetary needs of the international economy. The debt of the United States is a consequence of its role as issuer of the international currency of interchange, the U.S. dollar.       

The debt of the United States instead of to be a factor of weakness of its economy and the world economy, is a factor that reveals the strength of the US economy. The financial crises are caused by the owners of private fortunes to obtain personal benefits. They do the crisis and the governments pay the bailouts. That is the true truth.

10. Value and support of the international currencies

Since the Agreements of Breton Woods, in the post war, the value and support of the national currencies of the different countries of the world was established in base to the dollar of the United States of America. In those years, in Breton Woods, the countries agreed: a) the creation of the International Monetary Fund, b) that the international reserves of the nations must be kept in dollars c) That the value of the U.S. dollar should be established regarding the gold value, d) That the dollar would be the international currency of interchange, and e) that the emission of national currencies should maintain a relation with their reserves in dollars. For example, if you set that your national currency is worth in two (2) units per U.S. dollar, this mean that each national currency in circulation should be supported by a reserve of $ 0.50; the problem is that the nations not ever obey this rule. In all the cases, the parity regarding the dollar is an act of sovereignty of each government; this means that they can issue more or less amount of national currencies.

I don’t believe in public fiscal deficit; the governments have sovereign capacity to issue national money; which is the support? The people faith, nothing more; none currency has an own value, per se. The currencies of all the countries are simple papers without intrinsic value that are accepted by the people to make transactions in the market and only the governments have the power to issue those papers. In the past, the currencies had an intrinsic value, because they were made of gold or silver. But with the apparition of the bills of paper the situation changed. At the beginning the bills had a support in gold but along the time this support was eliminated and now its support is only its credibility, its acceptance.

11. Gold value

The currencies cannot be supported in gold for a simple reason: all the gold that exists in the world is not enough to support the big amount of money that circulates in the world.

The other issue is the intrinsic value of gold. Why gold does has a value? Which is the utility of gold? The value of gold is a convention, a creation of man without real base. You cannot eat, drink or use gold but for jewelry. The most important use of gold is as international instrument of reserve by the central banks of the countries. This is also a convention. The central banks might use other minerals like diamonds, platinum, and others. In change, there are goods that represent a true value: oxygen, water, food, medicines, petroleum. They have an intrinsic and useful value. You cannot live without them but you can without gold.

12. The external debt is the main obstacle for the development

The programs for the development of the undeveloped countries have been based in a paradoxical policy: the acquisition of big amounts of loans from the international financial system and the international agencies. This is new form of domination that became the undeveloped countries in absolutely dependents of the international financial system.

Many countries must employ more than 50% of their income to pay the external debt. This implies that they cannot afford the basic necessities of the population.

13. Corruption, a source of the world’s poverty

The other problem that impedes the development of the poorest countries is the corruption of a part of its leadership. The scarce fiscal resources of these countries are not ever employed in an honest form. The own fiscal resources of each country and the international aid sometimes is diverted for the personal benefit of the rulers. This determines the maintenance and enhancement of the poverty. The United Nations Secretary speech on the theme that heads this work is a perfect synthesis of the consequences of corruption for the world. The corruption subtracts the resources that should be employed in the progress of the people, usually, of the less favored social groups. Therefore, more than a crime, corruption is a sin against the poorest.

14. Lack of efficiency

Important investments in public services and infrastructure are made in many underdeveloped nations but, in many cases, those investments do not produce the appropriate results. This is especially visible in the sanitary and educational fields. Indeed, is in those activities where the majority of the undeveloped countries are very far of the Millennium Goals.  

15. People’s attitude and development

The economic and social behaviors and custom described in the previous paragraphs reveal the existence of a solid system that obstructs the development. Instead of promoting the progress of the nations, in the undeveloped nations the people’s attitudes contribute to stress the underdevelopment. Those attitudes are, among others, the following: a) the lack of conscience about the sanitary and health norms; for example, it is a custom in an important part of the population of the undeveloped countries the practice of unhealthiest actions like to cough and sneeze without protecting their mouths or to spit in the streets. A Mayor of a Chinese city has developed an intense campaign to teach at the citizens to avoid this custom. It is common also the commerce in the streets of food without the most elementary norms of sanitary, the inexistence or bad use of the public services of water and waste, b) The destruction of the natural resources and the damage to the environment, especially the contamination of the sources of water.   

16. A contradiction: The United States poverty

The United States is the first capitalist nation of the world but, in that country ---though it seems a contradiction--- the poverty exists. According to the Census Bureau document entitled Income, Poverty and health Insurance Coverage in the United States 2009, “the official poverty rate in 2009 was 14.3 percent up from 13.2 percent in 2008.” The report assure that “In 2009, 43.6 million people were in poverty, up from 39.8 million in 2008, the third consecutive annual increase in the number of people in poverty.” In the following table may be appreciated the official figures.

Source: United States Department of Commerce, U.S. Census Bureau, Income, Poverty and Health Insurance Coverage in the United States 2009, table 4, page 15.

Perhaps the most relevant proof of the poverty in the United States is the limitation of health care services which affects millions of citizens. This do not happens in the other industrialized developed nations, where the states guarantee the medical attention to the citizens.

In the United States, the health services are private business managed with economical benefits criteria and this impede at the poor people the access to the health services. A report published recently, assure, for example, that the time of wait for elective surgery might be of several months for the poor people and sometimes this never happen and the people die.

Source: United States Department of Commerce, U.S. Census Bureau, Income, Poverty and Health Insurance Coverage in the United States 2009, table 8, page 23.

The figures demonstrate key issues of the economic conduction of the United States. Moreover, too few days ago, conservative economists pointed out to sell the gold reserves of Fort Knox to pay the internal debt of the United States. The same economists requested the privatization of public services that are in hands of the Federal Government.

17. The extreme liberalism also affects the United States

The previous examples reveal that the U.S. faces an extreme economic liberalism trend that might be an important cause of the economic and social problems of this great country.

In the last years, the United States has begun to feel openly the extreme liberalism effects. The financial crisis of the year 2008 and its consequences is an irrefutable proof of this. The Federal Reserve boss, Ben Bernanke, recognized that the weak supervision by the government was one of the main causes of the financial fallout. The United States balance of payment weakness is other visible consequence, because the country imports are very important and their exports are affected by the competition of new exporters, like the countries of Asia. These situations have increased the unemployment rate and the poverty rate in the United States like was proved in the previous statistical tables. 

18. The Neo liberalism was imposed to the undeveloped nations

In the decade of the 80^th years, starting the dissolution of the Soviet Union, the World Bank and International Monetary Fund imposed the Neo liberalism to the undeveloped nations. The threat of do not refinancing their debts was the method employed to obligate at the undeveloped nations to accept the policy. The Neo liberalism may be considered like an extreme phase of the economic liberalism.

The basic elements of the Neo liberal policy of the eighty and ninety years of the 20^th century was: a) the privatization of the public services and public enterprises, b) the public services price increase, c) the international commerce liberalization (Globalization) and d) the interest rates augment. This policy ruined the economy of the undeveloped countries and destroyed the success that those nations had reached in the past. The results were more poverty, more unemployment and more damage to nature and the environment, because that system search only financial benefits at any cost.

19. What to do

First of all we must underline that the model of development followed until now by the undeveloped nations ---the Neo liberalism and Globalization--- has not been successful. It is necessary, then, creates a new model of development to diminish the poverty, the dependence, generate employment, fair salaries and protect nature and the environment. I would like to make mention of some concepts that might contribute to make possible the creation of a new model of development:

a. The poverty is a big problem with numerous implications: This means that the solution must be tackled since diverse points of view. It is not only an economic problem. It is, moreover, a sociologic,politics and demographic problem. From that broad perspective the problem must be considered. Since the economic dimension, the poverty may be considered as the lack or scarcity of basic means of subsistence. In the modern world this may be translated like the lack of money, because the commerce all is based in money. To buy any good or service is necessary money, if you do not have money you cannot acquire anything. In turn, the lack of money has a cause: the absence of economical activity as entrepreneur or like worker. So that the first measure to combat the poverty is to guarantee the development of economic activities in the production and distribution of goods and services to generate employment and fair income to workers and entrepreneurs. A third economic actor exists; it is the most important: the States, the governments of the countries.

b. The natural resources and the resources of capital are limited: If the population grows to a superior rhythm than the resources, it is not possible to reach a balance between population and resources. The consequence is the poverty. Hence, the other key measure to tackle the poverty is the demographic control.  

c. The financial capitalism is the responsible of the poverty of nations:  Like the majority of the poor countries do not have enough financial income to buy in the international markets, it should be created a new system that let them to acquire the goods and services that they need without currency. For example, like these countries have abundance of raw materials the mechanism might be to change raw materials for goods and services. The undeveloped countries should employ those goods and services to develop its internal economy, by the creation of new economic activities in concordance with their natural resources and the size and abilities of its population. If the process is realized according with the mentioned objectives, to change raw materials for goods and services would not be a mechanism to accentuate the dependence. On the contrary, the mechanism would let at the poor countries to have access to the goods and services that they need but that they cannot acquire in this moment because do not have enough money and to build a solid economy.

The financial capitalism has caused also the poverty in the rich nations, because important sectors of those countries do not receive the necessary financial income to reach an adequate level of life.

d. More flexibility in the financial loans: This would be a road to enhance the number of loans to the undeveloped nations.  

e. Best control over the international financial aid: the international agencies and the donors should create a best system of control of the funds given to the undeveloped nations to guarantee its right use.

f. More employment: The struggle against the unemployment is vital. The employment is the key of the wellbeing. I suggest: a)  A Global Program of Reforestation that would let the creation of millions of ecological employments worldwide  and the protection of nature and the environment and b) A program for the intense use of the time and the productive infrastructure in those countries affected by the depression of their internal markets. The basic proposal of this program is the creation of the double working-day and the half working-day, to incorporate millions of unemployed to the productive activities.  

g. Protection of Nature and the environment: The international agencies and the governments of the countries should intensify and create concrete programs of employment for protecting nature and the environment. Programs in these fields currently exist but they are not sufficient. The effort should be enhanced and this would contribute effectively to the population wellbeing and the preservation of the planet.

h. The mentioned programs have something in common: they employ a minimum amount of energy which is one of the scarcer resources in the current world.

Political economy, the first objective of the science and technology should be to conquer the Earth

In the last century man has obtained a great advance in science and technology; one of the best examples of that progress is the spatial career. Man is conquering the exterior space but, ironically, still he has not conquered the Earth.
On April 15, 2010 a report of BBC News signed by the journalist Jonathan Amos, assured that the President of the United States, Barack Obama, announced that “it should be possible to send astronauts to orbit the planet Mars by the mid-2030s and return them safely; a landing on Mars will follow…”
This announce reveals the great development reached until now by the science and technology but it is a good opportunity also for to reflect about the challenges that man has not resolved yet.
The first objective of the science and technology should be to conquer the Earth. There are four key fields where a most effort might be made:
1. Agriculture development.
2. Environment protection.
3. How conciliate the technology and the need of create new jobs.
4. Defeat of the illnesses.
Those are critical areas where the science and technology would help to improve the quality of live of the people, especially in the underdeveloped nations, where is concentrated the world population.
1. The agriculture development encompasses some basic tasks, like the followings:
a) To reduce the consumption of water because is in this productive sector where the consumption is most.
b) To increase the crops yields and the production of food.
c) To guarantee a best and fair distribution of the food production to benefit especially at the poorest and hunger population of the world.
2. The environment protection encompasses:
a) To reduce the desertification phenomenon and to preserve the forests.
b) How to reduce the carbon dioxide emissions especially in the coal and petroleum industry. In this sense the experience of Norway in their North Sea oil fields is very important because they have reduced their emissions of CO2 in 40 percent of the global average. That example might be considered by the industry in other places of the world.
c) What to do for avoid the oil spills in the oceans that cause a severe damage to the environment.
d) How to improve the methods for the nuclear garbage and the industrial waste disposal.
e) How create new methods for a best use of the energy sources.
3. The creation of new jobs encompasses:
a) To identify those activities where may be created the most number of jobs and to carry out them. This is one of the most sensible areas because of the reduction of the employments in the world as a consequence of the substitution of the workers by machines.
4. The defeat of the illnesses encompasses:
a) To make possible the access of the total world population to the health resources.
b) To advance in the scientific research to find the cure of the most graves illnesses.
c) To spread information about the advances of the science in the discovering of new medicines and curative methods. The human beings have the right of to know those discovering. There are people that assure that the medicine and the pharmaceutical industry have the remedy for some illnesses but that they do not present those medicines because their business would result affected. I do not believe that that is true but, in any case, the commercial interest should not be the most important. I think that, on the contrary, the pharmaceutical industry and the health sector might obtain the same or perhaps most benefits if the discovery of new curative and preventive medicines and procedures be developed.
Definition
According with the OECD Frascat Manual, fifth edition, 1993, paragraph 20, page 5, quoted by STATS.OECD, “…Scientific and technological innovation may be considered as the transformation of an idea into a new or improved product introduced on the market, into a new or improved operational process used in industry and commerce, or into a new approach to a social service…”
Origin of the progress
The innovation is the base of the human progress. But the innovation is linked to the level of education of the nations. A person may have a natural capacity but that is not enough. The natural vocation must be complemented with the formal knowledge. The developed nations reached that level of scientific and technological advance because they had an important amount of creators, people with natural intellectual abilities and a great research capacity.
Many factors influence the intellectual capacity. One of the most important is the quality and quantity of food available in each country and their distribution between the people. In an impoverished country with food scarcity it is very difficult the biological and intellectual development of the population. In change, in the countries with abundance of food is different.
The developed countries have had abundance of food. The underdeveloped nations have had restrictions in this sense. This explains the difference in the level of progress between both.
So that for the construction of a best world, first of all, it is necessary to develop a solid agriculture for producing and distributing the food that the human beings need to live. Without food nothing is possible; for that reason the first priority of the world should be the production and fair distribution of food.
Wealth and knowledge distribution
Until now the distribution of the scientific and technological knowledge has followed the same pattern of the wealth distribution. For breaking that circle it is necessary a great effort. The creation of new institutions of research in the underdeveloped nations is very important. The support to the individual researchers is too very positive. It is necessary to develop a mechanism for to spread the ideas of the unknown creators, because in any mind and in place of the world might be a good idea, something that may help the progress of humanity.
Number of researchers
According with the World Bank, World Development Indicators 2010, Finland is the country with major number of researchers per million of people, followed by Iceland, Sweden, Japan and Singapore as you can see in the table.

The figures confirm that the most developed nations concentrate the most number of the world researchers; by group of nations the Nordic countries are the main.
In the next table you can appreciate the contrast between the most advanced nations and the Latin American countries.

That is the reality that should be modified; the underdeveloped nations should increase the number of their researchers and direct its attention to those problems that most affect those countries. It is the local solution of the problems a way for the global advance of humanity. The regions or countries might create their own scientific and technological methods for to resolve their own problems. Of course, the paper of the global science and technology is something essential, but should exist too the appropriate local or regional contribution.
Cultural duality
It is the coexistence of the most advanced scientific and technological advances with the most precarious and savages forms of live. If you visit some regions of the world you can appreciate that duality. For example some tribes of the Amazonian regions still live in the Stone Age but in those regions you can find, in turn, instruments of the modern civilization.
There are also educated and apparently civilized people that, nonetheless, in their attitudes and mind still live in the Stone Age.
Conclusion
Man is conquering the space but still he has not conquered the Earth. Three big problems deserve the attention of the world leaders: the poverty, the lack or scarcity of natural resources and the damage to the environment. They are politics, economics, scientific and technological problems. The political economy might give a very important contribution but the science and technology must provide the other part. There are concrete problems that need answer: the water scarcity, the pollution, the nuclear, industrial and cities waste disposal, the destruction of the forests, the desertification, the hunger, the poverty and the unemployment.
The objective of the sciences must be the human beings happiness.
What do you think?

The political economy may contribute to build a better world, reflection on the evolution

Abandoned by the politicians and economists of the 20th century, the political economy necessary will reappear in the 21st century, because of a simple reason: man can hide the true, do not recognize it, but this not change the true; and the true is that the political economy is the most important of the social sciences because it synthesize the two most important activities that determine the live of the human beings. The politics alone is not sufficient; the economy alone neither. The combination of both is the base of the power and government an all the societies.
The political economy was abandoned at the begin of the 20th century because she could not respond to the main economical challenges of that moment, among them the economic cycle, the inflation, the devaluation of the currencies, the poverty and the growing unemployment.
Alfred Marshall (1842-1924) separated the economy of the politics and tried of creating an autonomous discipline; he did it and since then emerged the economics as an independent study. The new economics focused their attention in the microeconomics and the econometrics among other issues.
Marshall had interest in the human side of the economy and in contrast with the previous classical economists he asserted that was possible better conditions of live for the working classes. Marshall had a strong social sense and assured that the principal task of the economics should be to eliminate the poverty.
But the new economy promoted by Alfred Marshall and his pupils could neither resolve the accumulated problems. It was John Maynard Keynes, a traditional economist, former pupil of Marshall, which developed the politics and economic new system that gave to the world a partial solution for the economics problems of that historic stage. That new system was the macroeconomics, an integral political proposal that considered the increase of salaries and the private and public expenditure as the key factor for attacking the jobless and the economic recession. The thesis of Keynes was contrary to the ideas sustained by the Classical Economy, which thought that the reduction of salaries was the way for reactivating the employment and the economic growth.
The conception of Keynes let the recovery of the hit economies of the post war. For that reason the thirty years of growth between 1945 and 1975 was named the Age of Keynes. That period was very favorable for the developed nations of America and Western Europe but not for the rest of the world; in those years and the followings (80 and 90) the gap between the rich and the poor nations registered a great difference. The Capitalism generated an important progress but limited only to a small number of countries.
The Communist regimes of the past and of the present, like the Former Soviet Union and the nations of the Eastern of Europe, China, North Korea and Vietnam neither reached an economic welfare; on the contrary, they were and they are impoverished countries.
The first conclusion in this sense is that none of the economics systems has been able of to improve the quality of live of the majority of the world population so far.
Origin of the wealth and the poverty
The first form of property was the community property. The primitive man did not know the private property. It was the appropriation of the first lands by the stronger men the cause of the original richness; this was too the first economic sin. The consequence of this process was the born of two classes: the owners and the exploited, this means the rich and the poor.
A reflection on the evolution
The concept of evolution deserves an especial consideration. Man of the 21st century has the same predatory attitude of the primitive man. He commits murders, abductions, cheatings and stealing, terrorist acts against innocent people, maintain the slavery and do the war.
In parallel also exists the contrary: goodness, kindness, justice, love, religiosity and peace; the great problem is that in the majority of the societies this is not the common. This lead to an unavoidable question: until what the human being has evolved?
Man has achieved a great level of development since the scientist and technological point of view but not in his social and economic behavior.
In the 21st century exist the same social and economics conflicts of the Prehistory, it means:
a) The struggle by the property of the land: a minority is the owner of the majority of the urban and agricultural lands in the entire world.
b) The majority of the workers worldwide receives an insignificant salary that do not let them neither to buy the essential food.
c) The unemployment and sub employment affects the most of the workers worldwide.
d) The economics and social conditions of the work in the most part of the underdeveloped countries are in the practice conditions of slavery.
e) The struggle by the wealth distribution benefits to the privileged rich classes.
A new conflict has emerged
But a new conflict ---unknown in the past--- has arisen in the beginning of the 21st century: the global shortages of basic natural resources ---as water and petroleum--- that change the economic paradigm. The shortage of natural resources is a consequence of the overexploitation of the resources and of the pollution. The outcome is the scarcity of manufactured goods and more inflation.
A look to the past
The evolution of the humanity is divided in two great stages: the Prehistory and the History; the first is the period previous to the invention of the writing and the second begin since that moment until the present.
In the Prehistory man built the basic elements of the progress: constructed the first instruments of stone, learned how to transform the matter through the fire and discovered the agriculture, the ceramic, the metals, the road, the tools, the architecture, the textile, among other great advances.
At the beginning of the history in successive stages developed the writing and after created the print, an instrument that changed completely the history.
The other great historic jump occurs in the 18th century: the creation of the machine of vapor and of a new scale of production developed during the First Industrial Revolution in Europe.
In the 19th century appears in the scene the Second Industrial Revolution; this was the revolution of the energy and emerged two inputs ---the petroleum and the steel--- that joined to the electricity modified completely the live of millions of people.
In the 20th century the progress of the chemical and the medicine and the creation of the mass media represented the other great changes of the history. In this century happened, moreover, two extraordinary facts: the discovery of the nuclear energy and the conquer of the space.
All the mentioned advances suppose a great dominium of the exact sciences, the mathematics, physics, chemical, biology, medicine and the astronomy.
Man do not dominate the social sciences
But the human being has not been able of to reach the same level of development in the social sciences, especially in the economics and in the politics.
Man has not been able of:
a) Diminishing the poverty and for that reason more of two thirds of the world population lives in the extreme poverty with an income of less of two dollars per day.
b) To guarantee a decent salary to the most of the workers neither to create enough employments in the world.
c) To avoid the war and to live in peace, employing the politics and the diplomacy.
d) Preserving the forests, the nature, neither of does not contaminate the planet.
What does it reveal?
Similar to the savage’s animals
This reveals that man can dominate the external things but he is not able of dominating his primitive’s impulses and his conduct. It means that in his essence man is a predatory animal similar to the savage beasts. A simple example is sufficient for validating this concept: observe the behavior of man against the other men in the war scenarios. Currently, in plenty 21st century there are unbelievable examples in this sense in the Middle East, in Africa, in Asia; you know which those scenarios are and it is not necessary to do explicit mention of them.
Has evolved the human being?
What is evolution?
What do you think?
Conclusion
The political economy may contribute to build a better world.
The first step is recognizing the failure of the economics systems so far.
The Communism has been a complete failure in the nations where has been applied.
The Classical Economy could not anticipate the depression nor the unemployment. It had a non realist and theorist vision of the economy. The classic economic model of pure competition and equilibrium supported in the laws of the supply and demand has never existed. For that reason the Classical economists could not believe that a crisis might occur as a consequence of a fail in the demand.
The Marginalist thesis of Stanley Jevons (1835-1882) and Leon Walras (1840-1910) had also a capital sin: they considered the economy as an automatic mechanism that work in independent form of the rest of the society.
By other hand, the partial vision of the microeconomics imposed by Alfred Marshall at the beginning of the 20th century neither represented a solution for the practice economics problems of that epoch.
The Keynesian model ---that combined the participation of the investments and the regulatory action n of the State with the productive action of the private sector--- has been the most successful economic model until now.
But in the eighty years of the 20th century came back again the formulas of the Classical Economy, especially the Quantity Theory of Money, from the hand of Milton Friedman and his pupils of the Chicago School. The new monetarism caused a severe damage to the world economy because it stressed the difference between the rich and the poor nations and increased the poverty in the entire world, through a mechanism known as globalization.
Which would be a solution?
A synthesis of the best of the capitalism and the best of the socialism might be the possible solution.
The recurrent economic crisis in the capitalists nations put in evidence that the free market policies without none class of restrictions generates graves consequences. The most recent economic debacle of the years 2008 and 2009 is a good example of the assured.
On January 3, 2010 during the American Economic Association meeting in Atlanta, the chief of the Federal Reserve, Ben Bernanke, pointed out that:
“Stronger regulation is the best way to prevent financial speculation from getting out of hand and throwing the economy in a new crisis…” (a) By Jeannine Aversa, AP Economics Writer, On Sunday January 3, 2010, 1:41 pm EST.
Other leaders have expressed opinions in the same direction but the resistance to any change is enormous. This happens not only in the United States but in the rest of the capitalist’s nations of the Western World.
Two concrete measures
The politicians and the economists have lost the time in non important affairs. For example, they have not been able of paying effective attention to the three most important problems that affects the humanity: the poverty, the unemployment and the destruction of the nature and the environment.
A concrete Policy of Global Wellbeing should begin with two activities:
a) A Global Program of Employments. The ecological employments ---through the reforestation--- would be an effective way in that sense.
b) A Global Program of study and improvement of the salaries for the working classes.
These two programs might create the conditions for the construction of a better world.

Wages and welfare, ecological employments

Job and a fair wage is the essence of the economic and social development.

But, what is a just wage?

It is the amount of money for acquiring the goods that a person or a family need for getting welfare.

And what is the welfare?

It is health, food, dress, house, education, recreation, security and stable job; this mean quality of live. The problem is that the most part of the world population do not enjoy of those benefits; the great challenge is changing that situation.

Restrictions of natural resources, especially of water and energy, the scarcity of capital ---know how, technology, goods of capital, infrastructure and money--- do not help to carry out a global and effective program of employments and just wages.

A cause of the poverty

The other great problem is the inequality in the income distribution. The salaries are the basic indicator of the poverty or the well-being of a society.
There is a huge gap between the bosses and executives earnings and the workers salaries.

Only in the developed industrialized nations the workers receive an income for satisfying part of its necessities. In the rest of the world the wages are not enough neither to eat, as it is demonstrated in the following tables.


In Australia an executive receive an average of 200,000 US $ of salary per month, but a worker obtain (minimum wage) 1,908 US $ per month; something similar happen in Germany where the average salary of an executive is of 316,666 US $ per month while a worker obtain (minimum wage) 1,701.26 US $.
But the most difference is in the United States, where the monthly of a worker is of 1,209.60 while the executive earning (average) is of 525,000 US $; this mean 434 times more than the former.


Australia pays the higher wages to their workers, followed by France, Germany, the United Kingdom and Italy in the first five places. In this table the United States is in the sixth position regarding the workers earnings, but the United States is in the first place regarding the remuneration of their executives.

Of the selected countries of Asia, Bangladesh has the lesser income followed by Vietnam and China. A person that visited the industrial city of Guangzhou said to me that the workers in that city are practically slaves; they receive a salary of approximately 120 US $ per month and work the thirty (30) days of the month.
Of the selected countries, the communist nations of the past (Russia) and of the present (China and Vietnam) are the societies where the workers receive the lesser wages; in change, in the developed capitalists nations the workers obtain the higher salaries. This reveal the failure of the communism system and it explain why the communism disappeared in the former Soviet Union and in the Eastern Europe.


The situation in Africa is worse than the situation in the poorest nations of Asia.
In Latin America the Dominican Republic has the major wage but that is an exception in the region and in the rest of the underdeveloped nations.

The extreme poverty in Latin America is a sad reality. The case of Brazil and Mexico, which economies are situated between the first ten economies of the world is something that deserves to be considered with special attention: in both countries the minimum wage was less of 100 US $.

Brazil and Mexico have an important industrial development but is evident that their governments have been not able of establishing a fair wage for the workers.
In the most countries of Latin America still exists concentration of the property of the land and a good part of the peasants live in precarious conditions.



Key of the economic expansion
The economic expansion is not possible without just salaries; the politicians and the private entrepreneurs should be aware of this true.

The wages are the force that impulse the market; they are the key factor that determines the effective demand behavior.
A first step for combating the poverty is to increase the wages to a level that let to the workers satisfying its basic necessities.

If the underdeveloped nations do not make an effective effort for improving the wages the poverty will remain and vice verse.

Conclusion
The analysis of the economic reality lead to a conclusion: the most workers in the world are practically slaves because its salaries hardly let them to eat. Only in the developed industrialized nations this does not happen. Nevertheless, the difference between the wages of the executives and the workers earnings in the industrialized countries is something unbelievable: is hundreds of times superior.

It is necessary to carry out a global program for combating the poverty, preserving the natural resources and the environment.
One way are the ecological employments, through a global program of reforestation and conservation of the forests that still survive, as the Amazonia Region. The base of that program should be fair wages for the workers.

This program does not require a great amount of energy for to be developed; in change, other economic activities in the agriculture and the manufacture need a very important amount of energy, oil and coal especially. The world is running out of basic natural resources as water and petroleum. It is a global shortage of resources that change the economic paradigm.

The great problem of the humankind is that the worlds need more food and more manufactured goods, but there is not enough water nor petroleum for sustaining those requirements. In some regions, like China, there is abundance of coal but this is most contaminant source of energy. The other sources as the nuclear energy are too very dangerous, while the industrial eolic and solar energy are not enough developed. So far, the research with hydrogen has been a success, especially in the transport sector, but still it is in the beginning.

The other great problem is that for developing the agriculture the forests are razed and without the forests the live is not possible.

It is necessary a balance between the necessity of producing the essential goods, the use of the natural resources, the creation of jobs and fair wages. Those are great challenges for the creative capacity, especially for the thinkers, scientists, politicians, economists, entrepreneurs and the mass media.