Economic anthropologist Jason Hickel has done a lot of work exposing neoliberal poverty reduction myths. From his response to Steven Pinker and Bill Gates:

If you have read colonial history, you will know colonizers had immense difficulty getting people to work on their mines and plantations. As it turns out, people tended to prefer their subsistence lifestyles, and wages were not high enough to induce them to leave. Colonizers had to coerce people into the labour market: imposing taxes, enclosing commons and constraining access to food, or just outright forcing people off their land.

The narrative that you and Gates peddle relies on a poverty line of $1.90 per day. You are aware, I’m sure, that this line is arbitrary. Remarkably, it has no empirical grounding in terms of how much money is necessary to satisfy actual human needs.

If $1.90 is inadequate to achieve basic nutrition and sustain normal human activity, then it’s too low – period. It’s time for you and Gates to stop using it. Lifting people above this line doesn’t mean lifting them out of poverty, “extreme” or otherwise.

Remember: $1.90 is the equivalent of what that amount of money could buy in the US in 2011. The economist David Woodward once calculated that to live at this level (in an earlier base year) would be like 35 people trying to survive in Britain “on a single minimum wage, with no benefits of any kind, no gifts, borrowing, scavenging, begging or savings to draw on (since these are all included as ‘income’ in poverty calculations).”

In fact, even the World Bank has repeatedly stated that the line is too low to be used in any but the poorest countries, and should not be used to inform policy. The USDA states that about $6.7/day is necessary for achieving basic nutrition. Peter Edwards argues that people need about $7.40 if they are to achieve normal human life expectancy. The New Economics Foundation concludes that around $8 is necessary to reduce infant mortality by a meaningful margin. Lant Pritchett and Charles Kenny have argued that since the poverty line is based on purchasing power in the US, then it should be linked to the US poverty line – so around $15/day.

Your argument is that neoliberal capitalism is responsible for driving the most substantial gains against poverty. This claim is not supported by evidence. Here’s why: The vast majority of gains against poverty have happened in one region: East Asia. As it happens, the economic success of China and the East Asian tigers – as scholars like Ha-Joon Chang and Robert Wade have pointed out – is due not to the neoliberal markets that you espouse but rather state-led industrial policy, protectionism and regulation (the same measures that Western nations used to such great effect during their own period of industrial consolidation).

Not so for the rest of the global South. Indeed, these policy options were systematically denied to them, and destroyed where they already existed. From 1980 to 2000, the IMF and World Bank imposed structural adjustment programs that did exactly the opposite: slashing tariffs, subsidies, social spending and capital controls while reversing land reforms and privatizing public assets – all in the face of massive popular resistance. During this period, the number of people in poverty outside China increased by 1.3 billion ($7.40/day line for achieving basic nutrition and normal human life expectancy). In fact, even the proportion of people living in poverty increased, from 62% to 68%. In other words, the imposition of neoliberal capitalism from 1980 to 2000 made the poverty rate worse, not better.

Since 2000, the most impressive gains against poverty (outside of East Asia) have come from Latin America, according to the World Bank, coinciding with a series of left-wing or social democratic governments that came to power across the continent. Whatever one might say about these governments (I have my own critiques), this doesn’t sit very well with your neoliberal narrative.

As I pointed out in the Guardian piece, only 5% of new income from global growth goes to the poorest 60% of humanity – people living on less than $7.40/day.

Here’s how well it’s working: on our existing trajectory, according to research published in the World Economic Review, it will take more than 100 years to end poverty at $1.90/day, and over 200 years to end it at $7.40/day. Let that sink in. And to get there with the existing system – in other words, without a fairer distribution of income – we will have to grow the global economy to 175 times its present size. Even if such a feat were possible, it would drive climate change and ecological breakdown to the point of reversing any gains against poverty.

Hickel also had a great episode regarding this topic on Citations Needed.