Abstract

The facts of global poverty are staggering. Consider, for instance, how 1.5 billion people subsist below the international poverty line, which means about a quarter of the world's current population lives in poverty. There is much talk about how freer markets will help the situation of these people, in particular how it will help the worst off. So far the evidence for this claim is fairly unclear. ‘At any rate, on several accounts, alleviating the worst aspects of poverty would impose fairly small costs on us in more affluent countries, yet we continue to do very little about alleviating this situation. For instance, a 1 per cent tax on world product would make enormous inroads in lifting people out of poverty. Alternatively, simply a shift in priorities could do this without any added taxes: a 1 per cent decrease in military spending in the developed world and a 10 per cent decrease in military spending in the developing world could have the same effect.