Poverty Changes

£14,000 is quite a large amount of money. Enough for 70,000 Freddos, a decade’s worth of holidays, two new Nissan Pixo’s, several thousand potatoes or a gold standard racing pigeon. However, if you’re trying to live off just that amount in modern Britain, it quickly seems quite a lot smaller. Half of that could easily disappear on rent, whilst the average British family will spend a further £4,000 on food (significantly greater than the European average, for one reason or another). Then we must factor in tax, work-related expenses, various repair bills, a TV license, utility & heating bills, petrol money and other transport expenses, and it quickly becomes apparent that trying to live on this amount will require some careful budgeting. Still, not to worry too much though; it’s certainly possible to keep the body and soul of a medium sized family together on £14k a year, if not absolutely comfortably, and in any case 70% of British families have an annual income in excess of this amount. It might not be a vast amount to live on, but it should be about enough.

However, there’s a reason I quoted £14,000 specifically in the figure above, because I recently saw another statistic saying that if one’s income is above 14 grand a year, you are one of the top 4% richest people on planet Earth. Or, to put it another way, if you were on that income, and were then to select somebody totally at random from our species, then 24 times out of 25 you would be richer than them.

Now, this slightly shocking fact, as well as being a timely reminder as to the prevalence of poverty amongst fellow members of our species, to me raises an interesting question; if £14,000 is only just about enough to let one’s life operate properly in modern Britain, how on earth does the vast majority of the world manage to survive at all on significantly less than this? More than 70% of the Chinese population (in 2008, admittedly; the rate of Chinese poverty is decreasing at a staggering rate thanks to its booming economy) live on less than $5 a day, and 35 years ago more than 80% were considered to be in absolute poverty. How does this work? How does most of the rest of the world physically survive?

The obvious starting point is the one stating that much of it barely does. Despite the last few decades of massive improvement in the living standards and poverty levels in the world in general,  the World Bank estimates that some 20% of the world’s populace is living below the absolute poverty line of surviving on less than $1.50 per person per day, or £365 a year (down from around 45% in the early 1980s- Bob Geldof’s message has packed a powerful punch). This is the generally accepted marker for being less than what a person can physically keep body and soul together on, and having such a huge proportion of people living below this marker tends to drag down the global average. Poverty is something that the last quarter of the century has seen a definitive effort on the part of humanity to reduce, but it’s still a truly vast issue across the globe.

However, the main contributing factor to me behind how a seemingly meagre amount of money in the first world would be considered bountiful wealth in the third is simply down to how economics works. We in the west are currently enjoying the fruits of two centuries of free-market capitalism, which has fundamentally changed the way our civilisation functions. When we as a race first came up with the concept of civilisation, of pooling and exchanging skills and resources for the betterment of the collective, this was largely confined to the local community, or at least to the small-scale. Farmers provided for those living in the surrounding twenty miles or so, as did brewers, hunters, and all other such ‘small businessmen’, as they would be called today. The concept of a country provided security from invasion and legal support on a larger scale, but that was about it; any international trade was generally conducted between kings and noblemen, and was very much small scale.

However, since the days of the British Empire and the Industrial Revolution, business has got steadily bigger and bigger. It started out with international trade between the colonies, and the rich untapped resources the European imperial powers found there, moved on to the industrial scale manufacture of goods, and then the high-intensity sale of consumer products to the general population. Now we have vast multinational companies organising long, exhaustive chains of supply, manufacture and retail, and our society has become firmly rooted in this intense selling international economy. Without constantly selling vast quantities of stuff to one another, the western world as we know it simply would not exist.

This process causes many side effects, but one is of particular interest; everything becomes more expensive. To summarise very simply, the basic principle of capitalism involves workers putting in work and skill to increase the value of something; that something then gets sold, and the worker then gets some of the difference between cost of materials and cost of sale as a reward for their effort. For this to work, then one’s reward for putting in your effort must be enough to purchase the stuff needed to keep you alive; capitalism rests on the principle of our bodies being X% efficient at turning the food we eat into the energy we can use to work. If business is successful, then the workers of a company (here the term ‘workers’ covers everyone from factory floor to management) will gain money in the long term, enabling them to spend more money. This means that the market increases in size, and people can either sell more goods or start selling them for a higher price, so goods become worth more, so the people making those goods start getting more money, and so on.

The net result of this is that in an ‘expensive’ economy, everyone has a relatively high income and high expenditure, because all goods, taxes, land, utilities etc. cost quite a lot; but, for all practical purposes, this results in a remarkably similar situation to a ‘cheap’ economy, where the full force of western capitalism hasn’t quite taken hold yet- for, whilst the people residing there have less money, the stuff that is there costs less having not been through the corporation wringer. So, why would we find it tricky to live on less money than the top 4% of the world’s population? Blame the Industrial Revolution.

Web vs. Money

Twice now, this blog has strayed onto the subject of legal bills attempting to in some way regulate the internet, based on the idea that it violates certain copyright restrictions, and everything suggests that SOPA, PIPA and ACTA will not be the last of such attempts (unless ACTA is so successful that it not only gets ratified, but also renders the internet functionally brain-dead). However, a while ago I caught myself wondering exactly why the internet gets targeted with these bills at all. There are two angles to take with regards to this problem; why there is any cause for the internet to be targeted with these bills, and why this particular problem has bills dedicated to it, rather than simply being left alone.

To begin with the second one of these- why the web? Copyright violation most definitely existed before the internet’s invention, and many a pirate business even nowadays may be run without even venturing online. All that’s required is a copy of whatever you’re pirating, some cheap software, and a lot of blank discs (or USB’s or hard drives or whatever). However, such operations tended to be necessarily small-scale in order to avoid detection, and because the market really isn’t large enough to sustain a larger-scale operation. It’s rather off-putting actually acquiring pirated stuff in real life, as it feels slightly wrong- on the web, however, it’s far easier and more relaxed. Thus, rather than a small, fairly meaningless operation, on the internet (which is, remember a throbbing network with literally billions of users) piracy is huge- exactly how big is hard to tell, but it’s a fairly safe bet that it’s bigger than a few blokes flogging ripped off DVD’s out of the boot of a car. This therefore presents a far more significant loss of potential earnings than the more traditional market, and is subsequently a bigger issue.

However, perhaps more important than the scale of the operation is that it’s actually a fairly easy one to target. Modern police will struggle to catch massive-scale drugs lords or crime barons, because the real world is one in which it’s very easy to hide, sneak, bury information and bribe. It can be impossible to find the spider at the centre of the web, and even if he can be found, harder still to pin anything on him. Online however is a different story- sites violating the law are easy to find for anyone with a web connection, and their IP address is basically put on display as a massive ‘LOOK HERE’ notice, making potential criminals easy to find and locate. The web is a collective entity, the virtual equivalent of a large and fairly open ghetto- it’s very easy to collectively target and wrap up the whole shabang. Put simply, dealing with the internet, if a bill were to get through, would be very, very easy

But… why the cause for dispute in the first place? It’s an interesting quandary, because the web doesn’t consider what it’s doing to be wrong anyway. This is partly because much of what a corporation might consider piracy online isn’t technically illegal- as long as nothing gets downloaded or made a hard copy of, streaming a video isn’t against the law. It’s the virtual equivalent of inviting your mates round to watch a film (although technically, since a lot of commercial DVD’s are ‘NOT FOR PUBLIC PERFORMANCE’, this is strictly speaking illegal too- not so online as there is no way to prove it’s not from a public performance copy). Downloading copyrighted content is illegal and is punishable by existing law, but this currently often goes unregulated because the problem is so widespread and the punishment for the crimes so small that it is simply too much bother for effective regulation. The only reason Napster got hit so hard when it was offering free downloads is because it was shifting stuff by the millions, and because it was the only one out there. One of the great benefits that bills like SOPA offered to big corporations was a quick, easy solution to crack down on copyright violators, and which didn’t entail lengthy, costly and inconvenient court proceedings.

However, downloading is a far smaller ‘problem’ than people streaming stuff from Megavideo and YouTube, which happens on a gigantic scale- think how many views the last music video you saw on YouTube had. This is what corporations are attempting to stop- the mass distribution of their content via free sharing of it online, which to them represents a potentially huge loss in income. To what extent it does cost them money, and to what extent it actually gets them more publicity is somewhat up for debate, but in the minds of corporations its enough of a problem to try and force through SOPA and PIPA.

This, really is the nub of the matter- the web and the world of business have a different definition of what constitutes violation of copyrighted content. To the internet, all the streaming and similar is simply sharing, and this is a reflection of the internet’s overarching philosophy- that everything should be free and open to everyone, without corporate influence (a principle which is astoundingly not adhered to when one thinks of the level of control exerted by Facebook and Google, but that’s another story in itself). To a corporation however, streaming on the huge scale of the web is stealing- simple as that. And it is this difference of opinion that has led to such controversy surrounding web-controlling bills.

If the next bill proposed to combat online piracy were simply one that increased the powers corporations could take the prevent illegal downloading of copyrighted content, I don’t think anyone could really complain- it’s already definitely illegal, those doing it know that they really shouldn’t and if anyone wants to grumble then they can probably stream it anyway. The contentious part of all the bills thus far have been those which attempt to restrict the streaming and sharing of such content online- and this is one battle that is not going to go away. At the moment, the law is on the side of the web. Whether that will stay the case remains to be seen…