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| Can the world afford a middle class? |
| 2008-02-12 |
| The middle class in poor countries is the fastest-growing segment of the world's population. While the total population of the planet will increase by about a billion people in the next 12 years, the ranks of the middle class will swell by as many as 1.8 billion -- 600 million just in China. Homi Kharas, a researcher at the Brookings Institution, estimates that by 2020, the world's middle class will grow to include a staggering 52% of the total population, up from 30% now. The middle class will almost double in the poor countries where sustained economic growth is fast lifting people above the poverty line. While this is, of course, good news, it also means humanity will have to adjust to unprecedented pressures. The rise of a new global middle class is already having repercussions. In January, 10,000 people took to the streets in Jakarta to protest skyrocketing soybean prices. And Indonesians were not the only people angry about the rising cost of food. In 2007, pasta prices sparked street protests in Milan. Mexicans marched against the price of tortillas. Senegalese protested about the price of rice, and Indians took up banners against the price of onions. Argentina, China, Egypt, Venezuela and Russia are among the nations that have imposed controls on food prices in an attempt to contain a public backlash. These protesters are the most vociferous manifestations of a global trend: We are all paying more for bread, milk and chocolate, to name just a few items. The new consumers of the emerging global middle class are driving up global food prices. The food-price index compiled since 1845 by the Economist is now at its all-time high; it increased 30% in 2007 alone. Wheat and soybean prices rose by almost 80% and 90%, respectively. Many other grains reached record highs. Prices are soaring not because there is less food (in 2007, the world produced more grains than ever before) but because some grains are now being used as fuel, and because more people can afford to eat more. The average consumption of meat in China, for example, has more than doubled since the mid-1980s. The impact of a fast-growing middle class will be felt in the price of other resources. After all, members of the middle class are also buying more clothes, refrigerators, toys, medicines and eventually will buy more cars and homes. China and India, with nearly 40% of the world's population -- most of it still very poor -- already consume more than half of the global supply of coal, iron ore and steel. Thanks to their growing prosperity and that of other countries such as Brazil, Indonesia, Turkey and Vietnam, the demand for these products is booming. Moreover, a middle-class lifestyle in these developing countries, even if more frugal than what is common in rich nations, is more energy-intensive. In 2006, China added as much electricity as France's total supply. Yet millions in China lack reliable access to electricity; in India, more than 400 million don't have power. The demand in India will grow fivefold in the next 25 years. And we know what happened to oil prices. Oil reached its all-time high of $100 a barrel not because of supply constraints but because of unprecedented growth in consumption in poor countries. China alone accounts for one-third of the growth in the world's oil consumption in recent years. The public debate about the consequences of this global consumption boom has focused on what it means for the environment. Yet its economic and political effects will be significant too. The lifestyle of the existing middle class will probably have to drastically change as the new middle class emerges. The consumption patterns that an American, French or Swedish family took for granted will inevitably become more expensive; driving your car anywhere at any time, for example, may become prohibitively so. That may not be all bad. The cost of polluting water or destroying the environment may be more accurately reflected. But other dislocations will be more painful and difficult to predict. Changes in migration, urbanization and income distribution will be widespread. And expect growing demands for better housing, healthcare, education and, inevitably, political participation. The debate about the Earth's "limits to growth" is as old as Thomas Malthus' alarm about a world in which the population outstrips its ability to feed itself. In the past, pessimists have been proved wrong. Higher prices and new technologies that boosted supplies, like the green revolution, always came to the rescue. That may happen again. But the adjustment to a middle class greater than what the world has ever known is just beginning. As the Indonesian and Mexican protesters can attest, it won't be cheap. And it won't be quiet. |
| Posted by:Seafarious |
| #7 As "global warming" hysteria morphed into "climate change" hysteria that is now morphing into record low temperatures in International Falls, Moisés NaÃm expects us to do the same thing that the "global warming" advocates expected us to do: panic, or at least care. The problem with all of these so-called experts is that they are little more than tabloid journalists -- depending on the pessimists to stroke their egos and approve their government grants to study things can barely be influenced if at all. Neither climate nor the size of the global middle class is likely to change abruptly because there are significant moderating forces present. "In January, 10,000 people took to the streets in Jakarta to protest skyrocketing soybean prices." That doesn't sound like the growing middle class to me. That sounds like the impoverished pushed to desperation. |
| Posted by: Darrell 2008-02-12 16:55 |
| #6 The nobles class always fears the rise of the peasants and serfs. If the peasants and serfs become better off it's historically likely they will refuse to submit and pay taxes to the nobles, and may actually rise up and throw off the nobles as unnecessary to their lives and perhaps even a detriment they can do without. It's one reason why Europe dislikes America so often, so much, and resents us "dirty colonials". We're not ruled by kings, have no (real) noble class that can make our decisions for us, and seem bound and determined to make decisions for ourselves rather than have them properly made by our "betters". According to some people, half this country is run by dirty, uneducated, red-necked, sod-busting, gun-toting, hicks who haven't got the intelligence, having been raised in the backwoods someplace and been marrying ourselves off between brothers & sisters, to know that folks on the coasts and especially in Europe are better able to make our decisions for us than we are ourselves. It almost seems, sometimes, that this kind of prejudice and malice is genetic, a product of the actual inbreeding that took place between the noble families of Europe. |
| Posted by: FOTSGreg 2008-02-12 11:27 |
| #5 I see this more as a case for free trade. Agriculture is heavily subsidized/regulated in most countries. Drop those and watch prices fall. (This means you too, EUros) |
| Posted by: Spot 2008-02-12 08:25 |
| #4 Statistics about diet and meat consumption have notoriously been manipulated in recent years. The best example I can think of happened back in the 1990's when "nutritionists" were touting how the Japanese diet in the immediate post WWII era was predominantly rice and veggies (More than 80% of caloric intake) and this made for the longevity of the Japanese. And that now that Japan had adopted a "nontraditional" (read: Western and therefore evil) diet with a lot more meat and fish, their longevity was suffering. Except that the researchers didn't do their homework back further in time, a la AGW advocates. As recently as 1900, the Japanese diet was more than 75% meat and fish and scant veggies and rice. And the longevity was not appreciably different from the all veggie-and-rice era. There are just some people in the world who have it in for flesh consumption, and they'll do anything to curtail or stop it. Although I suspect the author of the article wants it to diminish for other, not himself. Standard of living in the West will necessarily take a hit as other countries compete for resources to make their own lives better. We'd best all get used to it. I think the world is a safer place in a world of comfortable bourgoisie than it is with a bunch of starving peasants, so we get something in return for our slight loss of lifestyle. The real fear of elites, from Europe's ruling class to Middle Eastern sheiks to Ted Kennedy to guys like this, is that a growing and burgeoning middle class will be the fertile soil from which new economic elite will spring, displacing the old ones. What else can explain their love of "progressive" taxation, or hyperregulation of business both of which hold back each new crop of entrepreneurs? |
| Posted by: no mo uro 2008-02-12 07:06 |
| #3 Just a few of the meat savings found this week at the FORT BELVOIR commissary: BACON CENTER CUT OSCAR MAYER 12.00 OZ EDLP BACON LOW SALT OSCAR MAYER 16.00 OZ EDLP BACON SLCD BAR S 16.00 OZ 26% BACON SLCD OSCAR MAYER 16.00 OZ EDLP BACON SLCD THCK OSCAR MAYER 16.00 OZ EDLP BACON THCK SLCD BAR S 16.00 OZ 26% FRANK BEEF BN LNGTH OSCAR MAYER 16.00 OZ 27% FRANK BEEF EZ OSCAR MAYER 16.00 OZ 27% FRANK BEEF XXL DELI STYL OSCAR MAYER 16.00 OZ 27% FRANK CHEESE OSCAR MAYER 16.00 OZ 27% FRANK NAT BEEF OSCAR MAYER 12.00 OZ 27% FRANK XXL HOT N SPICY HOT DOG OSCAR MAYER 16.00 OZ 27% HMR BEEF SHREDDED BBQ SAUCE LLOYDS 18.00 OZ 13% HMR BEEF TACO TUB CHI CHIS 18.00 OZ 13% |
| Posted by: Besoeker 2008-02-12 04:50 |
| #2 Yea, that's the impression I got, too. |
| Posted by: Spike Uniter 2008-02-12 04:04 |
| #1 Moisés NaÃm is editor in chief of Foreign Policy magazine I suppose this guy's solution is keep everyone but he and his in a starving "lower class" that uses less and dies sooner. |
| Posted by: Throger Thains8048 2008-02-12 00:46 |