PPI’s Trade Fact of the Week: The number of poor countries has fallen by more than half since 2000

FACT: The number of poor countries has fallen by more than half since 2000.

THE NUMBERS: 

2022          26
2012           36
2002          54
1992           55

*World Bank definition and estimate, based on per capita gross national income.

WHAT THEY MEAN:

Since the mid-1980s, the World Bank has been informally grouping economies into four tiers of wealth. They begin at “low-income” and ascend through “lower-middle income” and “upper-middle-income” to “high income”, divided by annually adjusted levels of Gross National Income per capita. The list comes out each year, with the thresholds slightly adjusted to take account of inflation and a few arcane macro-issues. It is meant less to measure inequality among countries (though it does offer some comparisons) than to give a stable definition of what it means for an economy to be poor, rich, or somewhere in the middle. Over time, it also allows you to see change — this year, with a vivid four-color visualization — as some countries rise, others descend, and the world as a whole changes. First the numbers, then the colors and the trend they show:

Numbers: In the 2023 list, a “low-income” economy has a GNI per capita of $1,135 or less per year. The Bank finds 26 such countries, from Burundi (the poorest country in the world at $240 per person per year, with Afghanistan and Somalia a bit above) to Ethiopia at $1,020. A “high-income” economy’s GNI per capita, meanwhile, is anything above $13,845. This group’s brackets are two small-island tourist favorites: Seychelles in the Indian Ocean at $14,340 and Bermuda at $125,240. (The U.S. is seventh at $76,370; more below.)  In between are (a) lower-middle-income countries from $1,136 to $4,445 per person per year, in practical terms from Tanzania, Tajikistan, Nepal, and Myanmar just above the low-income line to Mongolia, Jordan, and Ukraine at $4,200+; and (b) upper-middle-income countries from Indonesia and the West Bank and Gaza a bit above $4,500 to China, Bulgaria, and pre-invasion Russia, each a few hundred dollars below “high-income” status.

The list changes a bit each year, sometimes to add some new economies but mostly to report shifts in classification. The 2023 list, for example, the Palestinian territories and El Salvador in upper-middle income territory  for the first time, and restores Indonesia (which first entered this group in 2019, but temporarily fell back out during the Covid pandemic).  Guinea and Zambia likewise cross from low-income to lower-middle income, and Guyana and American Samoa from upper-middle to high-income. More systemic changes show up over decades rather than years: taken in 10-year jumps, the last 30 years reveal a steady upward drift across the entire list:

1992: This early edition of the list, contemporary with the birth of the World Wide Web, the creation of the WTO, etc. included 204 economies.  Of this total, 55 were low-income, 71 lower-middle income, 39 upper-middle income, and 39 high income. Using a simpler breakdown, the list was weighted toward the bottom, with 126 low- and lower-middle income states and 78 upper-middle and high-income economies. Thus about 62% of economies fell below the line separating the low and lower-middle income tier from the upper-middle and high-income region, while 38% placed above it.

2002: 209 economies, of which 64 were low-income, 54 lower-middle, 34 upper-middle, and 57 high income.

2012: 215 economies (larger in part because of a couple of declarations of independence, but mainly due to more complete coverage of small islands), of which 36 were low-income, 48 lower-middle, 55 upper-middle, and 76 high income.

2022: This most recent edition, out in early July, covers 217 economies, of which only 26 are low-income, 54 lower-middle, an identical 54 upper-middle, and 83 are high income. So 137 of them, or about 63%, are now above the “median” line and 37% below, reversing the 1992 proportions.

Colors: Accompanying this year’s release, a time-series map colors high-income countries dark forest green, upper-middles a lighter emerald shade, lower-middles a kind of lilac purple, and low-incomes dark purple or violet. The 1992 map has no green anywhere between Germany and South Korea; all the most populous countries in the heart of Asia — Pakistan, India, Bangladesh, Indonesia, Vietnam, and China — combine in a forbidding block of low-income violet, relieved only by lilac Thailand, emerald Malaysia, and tiny dark green dots for Brunei, Singapore, and Hong Kong.  Africa meanwhile has some light green at the top and bottom, but apart from a bit more light green for oil-exporting Gabon and light purples for Namibia and Angola, it’s gloomy violet all the way from the Sahara to the Kalahari. In the Western Hemisphere, a light purple shading extends through nearly all of Latin America; and Western Europe’s, dark green ends at the eastern borders of Germany, Austria, and Italy, with a bit of light green for Hungary and everything else lower-middle income lilac.

As the time-lapse proceeds, Asia’s violet block fades to lilac for China and Southeast Asia by the 2000s, and then (with exceptions for Afghanistan and North Korea) goes green in the north and lilac in South Asia.  Africa’s violet retreats from the continent’s maritime rim, and now concentrated in inland states and the Horn, is almost completely ringed by lilac. The light purples in Latin America mostly vanish (though Venezuela falls off the green map, and the Bank isn’t venturing a guess this year), and dark green high-income tones turn up in Panama, Chile, Uruguay, and five Caribbean island states. And the forest-green edge of western Europe flows east and south as EU and NATO membership grows, sequentially incorporating Poland, the Baltic states, the Czech Republic and Hungary, Croatia, and most recently Romania.

In practical human-being terms, as this has proceeded the number of people living in deep poverty has dropped from 1.995 billion of 5.3 billion people then – that is, 38% or nearly two-fifths of humanity — to 655 million of 8 billion, or about 8%, as of the last estimate covering the year 2018. Sometimes, things do get better.

* Technically by “Gross National Income Per Capita, Atlas Method.”

 

 

FURTHER READING

The WB’s visualization, with links to this year’s country income groups and explanations of the various calculations they involve.

The U.S. and the top end  The U.S.’ 2022 ranking is seventh among the 216 economies by per capita income, just above Denmark and Qatar at $76,370 per person. The top six are Bermuda at $125,240, Norway at $95,610, Luxembourg at $91,200, Switzerland at $89,450, Ireland at $81,070, and the Isle of Man at $79,300. An alternative calculation, by purchasing-power parities, lifts Norway into first, followed by Qatar and Singapore, then Bermuda, Luxembourg, Ireland, the United Arab Emirates, and Switzerland with the U.S. ranked ninth.

The big economies — Among the world’s 16 largest economies (as measured by total GDP), the list reports nine in the high-income group, six at “upper-middle-income,” and one “lower-middle-income” economy, and no low-income economies. A list with these 16 and their “rankings,” along with Bermuda and Burundi in italics as the top and bottom bounds:

[High-income]
1.     Bermuda, $125,240
7.     United States, $76,370
15.   Australia, $60,430
21.   Germany, $53,390
22.   Canada, $52,960
24.   United Kingdom, $48,890
28.   France, $45,860
30.   Japan, $39,570
34.   Korea, $35,990
35.   Spain, $31,860

[Upper-middle-income line = $13,845]
70.    China, $12,830
71.    Russia, $12,810
80.    Mexico, $10,410
88.    Brazil, $7,920
121.  Indonesia, $4,580

[Lower-middle income line = $4,445]
147.  India, $2,380

[Low-income line = $1,145]
217.  Burundi, $240

A PDF of the full list from the World Bank.

 

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week

The Future is Woman, feat. Tracey Dumas Clark & Crystal Gilliam

PPI’s Reinventing America’s Schools (RAS) Project has a new podcast series on titled “The Future is Woman” recorded live at the 2023 Essence Festival in New Orleans, Louisiana.

In the third episode of this five-part series, RAS co-director Curtis Valentine sits down with Tracey Dumas Clark, Chief Program Officer at 4.0 and Crystal Gilliam, Director of Philanthropic Programming at 4.0.

Learn more about the Reinventing America’s Schools Project here.

Learn more about the Progressive Policy Institute here.

Lewis for The Hill: The fight over Reagan National Airport is bigger than Washington

By Lindsay Lewis

You can’t easily reduce America’s flagging faith in government to any single factor. But if there’s any one thing that surely contributes to the electorate’s frustration with Washington, it’s the seemingly endless litany of examples demonstrating how government gets in its own way.

That’s about to happen, once again, with the forthcoming reauthorization of the Federal Aviation Administration’s oversight of the nation’s airline industry. Unless those interested in the greater good prevail, a handful of self-serving companies may undermine the public interest. And if that happens, those who regularly trumpet the notion that government is always the problem — those who, as President Trump likes to argue, believe the public is constantly getting a “bad deal” — will have yet another sorry episode to burnish their indictment.

Read more in The Hill

Jacoby for The Washington Monthly: Ukraine’s Other Front: The War on Corruption

By Tamar Jacoby

Pavlo Novyk monitors his native Kharkiv, a city of 1.4 million near the Russian border, from an apartment 500 miles away in much safer western Ukraine. Part journalist, data geek, and civil society activist—he works for the nonprofit Kharkiv Anticorruption Centre—Novyk spends his days online, scrutinizing Kharkiv government purchases. Once one of the most corrupt cities in Ukraine, Kharkiv is now legally required to make purchases—everything from printer paper to hospital beds to food for animals in the city zoo—through an online portal available to the public.

Westerners watching the fighting in Ukraine are waiting for a breakthrough on the battlefield. But Ukraine’s struggle to free itself from centuries of Russian rule and toxic Soviet-era influences is more than a military face-off. It is also a war on corruption. This second fight is being waged in the capital, Kyiv, where the president and parliament have created a network of anticorruption courts and law enforcement agencies, but also in cities like Kharkiv, where corrupt mayors aligned with Russia have historically stolen public funds with impunity.

The good news from Kharkiv, Ukraine’s second-largest city, once a bustling industrial hub and gateway for trade with Russia: anticorruption activists like Novyk say their 10-year battle against bribery, extortion, and other forms of corruption is beginning to pay off. A combination of new online tools and pressure from international donors has given activists an edge, and city officials have started to respond when civil society groups file complaints.

Read more in The Washington Monthly.

Marshall for The Hill: Why working families aren’t sold on Bidenomics

By Will Marshall

The U.S. economy presents a frustratingly mixed picture. Viewed from some angles — low unemployment, rising wages and bullish financial markets — it conveys strength. From others – high prices, interest rates and debt — it looks heavily burdened and susceptible to recession.

While economists debate whether the glass is half empty or full, the public’s verdict is clear. Americans are strikingly pessimistic about the nation’s economy, with only 30 percent describing it as good.

The White House thinks it’s found just the thing to lift the country’s glum spirits — a new economic doctrine. In recent weeks, President Biden and his advisors have been touting “Bidenomics” as a bold new departure from the “trickle-down” theories that supposedly held sway over the past 40 years.

This grandiose claim hardly seems fair to the Democrats who occupied the White House for 16 of those years. Did the Obama-Biden administration really embrace the tax-cutting, trickle-down policies of Ronald Reagan and subsequent Republican presidents?

Read more in The Hill.

PPI Applauds FDA’s Approval of Over-the-Counter Birth Control Pill

Erin Delaney, Director of Health Care Policy at the Progressive Policy Institute (PPI), released the following statement on the Food and Drug Administration’s (FDA) decision to approve an over-the-counter (OTC) birth control pill:

“PPI applauds the FDA for its approval of Opill, the first daily OTC birth control pill, after decades of advocacy to make birth control more accessible. Allowing the sale of OTC birth control pills means that the more than 19 million women of reproductive age living in contraceptive deserts could have access to the health care they need. This is a historic victory for public health and health equity as we continue to fight for reproductive access and freedom, especially in the wake of Roe.

“Now that this step has been taken, it is critical to ensure that OTC birth control pills are affordable, covered by insurance, and are available in all pharmacies — including independent pharmacies — to ensure rural access. While OTC medications are typically less expensive than prescription, the cost of Opill is not yet known and health plans are only encouraged, not required, to cover OTC birth control pills without cost-sharing. Currently, most private health insurers cover prescription birth control pills thanks to the Affordable Care Act, and all five major insurers cover different forms of OTC birth control.

“To ensure equitable access to Opill and future OTC birth control pills, PPI endorses the Affordability is Access Act, sponsored by Senator Patty Murray (D-Wash.), that would require all private health insurance plans to fully cover OTC birth control without any out-of-pocket costs to the patient.

“PPI will continue to support efforts to broaden access to comprehensive reproductive health care for all Americans.”

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

Follow the Progressive Policy Institute.

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Media Contact: Amelia Fox – afox@ppionline.org

The Future is Woman, feat. Steph Walters

PPI’s Reinventing America’s Schools (RAS) Project has a new podcast series on titled “The Future is Woman” recorded live at the 2023 Essence Festival in New Orleans, Louisiana.

In the second episode of this five-part series, RAS co-director Curtis Valentine sits down with Steph Walters, Director of Engagement and Communications at Yellow.

Learn more about the Reinventing America’s Schools Project here.

Learn more about the Progressive Policy Institute here.

PPI’s Trade Fact of the Week: The U.S. collects more tariff money on Pakistani goods than on British goods

FACT: The U.S. collects more tariff money on Pakistani goods than on British goods.

THE NUMBERS: 

Imports from U.K., 2022:                $63.8 billion
Imports from Pakistan, 2022:         $6.0 billion

Tariffs on Pakistani goods, 2022:   $607 million
Tariffs on U.K. goods, 2022:           $578 million

 

WHAT THEY MEAN:

National Security Advisor Jake Sullivan in April asserted (mistakenly) that the U.S.’ “trade-weighted average tariff rate is 2.4 percent.” His source for this number is unclear; the actual figure, via the U.S. International Trade Commission (see below for detail on authoritative estimates) for 2021 was 3.0%, and pending their official word the 2022 rate looks like 2.8%.

A single number like this, though, is useful but blurry. The blurriness reflects the fact that the actual 11,414 official tariff rates vary greatly. The 5,864 ad valorem tariffs alone start at 0.1% and go as high as 48.0%, the 1,078 specific duties and compound tariffs add complexity, and both are then complicated by thousands of special waivers and surcharges. Therefore as a buyer, the rates you pay depend both on what you’re buying and from whom you got it, and as a country, it’s unusual to get a rate very close to the ‘average.

To oversimplify, the permanent “MFN” tariff system raised about $45 billion last year. It taxes low-priced clothes, shoes, and other consumer goods most heavily, natural resource products and high-tech goods most lightly, and heavy-industry and food in between. Therefore it hits lower-income families hardest. The Trump era’s administratively created “232” tariffs on metals and “301” tariffs on about half of imports from China brought in about the same amount of money (mainly from Chinese goods), but mainly cover industrial inputs such as metals, auto parts, and electronics, and so fall most heavily on industrial-sector buyers like auto plants, construction firms, and repair shops. Meanwhile, the U.S.’ 20 FTAs and three currently operating developing-country “preference” programs waive most tariffs for buyers of things from Canada, Mexico, Australia, South Korea, 16 other FTA partners, and also for countries in sub-Saharan Africa and the Caribbean littoral. Putting all these things together, in practice the 2.8% average becomes a range rising from 0% (for Cuba) to 15.0% (for Bangladesh), with natural-resource exporters and most African countries near the bottom, high-income countries a bit below the world average, diversified middle-income states very close to the average, and low-income Asian countries along with China at the top.

Here’s a look as of 2022, with a few entries from earlier years to illustrate the impacts of the 232 and 301 tariffs:

Three explanatory notes for this pattern:

High tariffs on low-income Asia: The high rates at the top reflect the specialization of many lower-income Asian countries — Bangladesh, Sri Lanka, and Pakistan in particular, Cambodia now a bit less so — in exports of clothing and home textiles. This explains why buyers of Pakistan’s modest $6 billion worth of shirts, towels, and similar goods pay fourteen times more than buyers of Norway’s slightly larger $6.7 billion in salmon, oil, and pharmaceuticals, and in fact more than buyers of $63 billion in British medicines, art auction proceeds, and aircraft parts. Ethiopia also shows up here, having lost its AGOA tariff waiver in January 2022 but still exporting somewhat smaller quantities of clothes.

Low-to-medium rate on others: The lowest rates show up for countries that are (a) natural resource exporters (oil for Kuwait and Saudi Arabia, fish for Fiji and Greenland); and (b) FTA partners and special program beneficiaries, with Canada, Jordan, El Salvador, South Korea, and Colombia representing the first group; and Kenya, South Africa, Ghana, Haiti, and Jamaica the second. Larger upper-middle-income and high-income countries — Germany, Poland, Brazil, Argentina, Thailand, Japan — have diversified export mixes, typically with a lot of zero-tariff products, a lot of mid-tariff products, and some high-tariff goods, and usually wind up in a range from 1% to 3%. India is also now in this range, though still a lower-middle-income country. There was only one actual zero-tariff country in the world — meaning, some imports but no tariff revenue collected at all. This weirdly turns out to be Cuba, where trade remains mostly banned, a few licensed U.S. buyers have been buying Cuban artwork, and tariffs on paintings, sculpture, antiques, etc. are all permanently set at zero.

301 & 232 effects: The U.S. worldwide tariff average — that is, the statistic Sullivan was looking for — doubled from 1.4% in 2017 to 2.8% in 2022. The effect of the Trump administration’s “232” steel and aluminum tariffs was small, affecting only about 1.5% of imports and changing average rates for suppliers like the EU, Japan, and Brazil only modestly. The higher global average mainly results from the “301” tariffs on Chinese goods: following these, though China lost some “import market share,” total imports of Chinese goods remained at $500 billion, tariff revenue rose about four-fold, and the average tariff paid by buyers of Chinese goods accordingly rose from 2.7% to 11.0%.  This 11.0% is quite high in comparison to the world average — but, pretty remarkably, is still below the normal rates imposed on buyers of Bangladeshi and Sri Lankan goods.

FURTHER READING:

Sullivan’s April global-economy talk.

… and a worried response from PPI’s Ed Gresser.

At home:

PPI’s take on the tariff system as a form of taxation, and its impact on low-income American families and communities.

Case study 1: PPI’s Valentine’s Day blast against the unfair, gender-biased U.S. underwear tariff system.

Case study 2:  And reports on the contrast between high tariff rates on cheap stainless-steel spoons, and low ones on sterling silver.

“Average tariff rate”:

The NSC’s neighbors at the Office of Management and Budget report $99.9 billion in “customs duties and fees” in FY2022. This makes the tariff system the fourth-largest federal tax, about equal to the combined revenue totals from the $32.5 billion inheritance taxes, the $46.6 billion gas tax, and the $10.2 billion alcohol and $11.3 billion tobacco excise taxes. Subtracting the two main fees from this total (CBP’s Merchandise Processing Fee and Harbor Maintenance Fee revenue), the result is an average of about 2.8%. The U.S. International Trade Commission annually reports “duties” without the “fees”, but hasn’t yet released its final 2022 figure. For 2021 it got $84.5 billion in tariffs, $2.824 trillion in imports, and a 3.0% overall rate. Their preliminary figure for 2022 is a bit lower, with $90.1 billion in tariffs on $3.277 billion in imports, or 2.75%.

OMB’s Historical Tables offer comparisons with other taxes.

… CBP explains the “fees.”

A long view – The U.S. International Trade Commission tracks U.S. tariff rates from the McKinley Tariff of 1890 to 2021.

The tariff system itself:

From the first chapter (01 for live animals) to the last, (97, for artwork), the tariff system’s 11,414 different eight-digit “lines” are meant to give every physical thing a number and a tax rate. The first line, “0101.21.00” stands for “purebred breeding horses” and is set at zero. The last, “9706.90.00,” is for antiques between 100 and 249 years old and is also zero. Overall, the 11,414 lines include (a) 4,315 set at zero (say, for natural gas, smartphones, paper, toys, and medicines); 5,864 with above-zero “ad valorem” (i.e., percentage) tariffs ranging from 0.1% to a peak of 48% for cheap sneakers; and 1,078 “specific duties” (flat fees) and “compound” tariffs (percentages plus flat fees), where tariff change each year with prices. For example, pinking shears used by tailors and dry cleaners are set at 8% plus 8 cents for each. Adding to the confusion are thousands of exemptions and surcharges coded via letters or set down in alternative chapters 98 and 99.

From the ITC, a two-page summary of the 11,414 U.S. tariff lines — how many zero? how many duty-free under FTAs and preferences? how many “specific duties” and compounds? — etc.

And the actual U.S. tariff system, by chapter or the full 4,352-page book in PDF.

International comparisons:

The World Bank’s interactive table of average tariff rates worldwide and by country uses the same “weighted” approach. It has a worldwide average of 2.6% as of 2017, and rates by country for the most recent available year. The world’s highest rate is Bermuda’s 24.1%, followed by Belize at 18.7%, Gambia 17.8%, and Djibouti 7.6%. The lowest are the zeroes for Hong Kong and Macao. Use this with care; its 1.5% figure for the U.S., though correct for 2017, is dated “2020” and isn’t right.

The WTO’s World Tariff Profiles 2022 has more detail, with simple averages, trade-weighted averages, “tariff peak” counts, ag vs. non-ag., and more for 151 countries.

 

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week

The Future is Woman, feat. Dr. Steve Perry

PPI’s Reinventing America’s Schools (RAS) Project has a new podcast series on titled “The Future is Woman” recorded live at the 2023 Essence Festival in New Orleans, Louisiana.

In the first episode of this five-part series, RAS co-director Curtis Valentine sits down with Dr. Steve Perry, Founder and Head of Schools at Capital Preparatory Schools.

Learn more about the Reinventing America’s Schools Project here.

Learn more about the Progressive Policy Institute here.

Bledsoe for The Messenger: A Melting Arctic Will Bring Climate Disaster Without Urgent Action

By Paul Bledsoe

President Joe Biden met with both U.K. Prime Minister Rishi Sunak and then King Charles this week to discuss climate change, and action on the Arctic should have been at the top of the agenda since the melting of Arctic sea ice is rapidly destabilizing the climate more powerfully than any other immediate cause.

As the Arctic’s reflective sea ice continues to melt, more and more heat is absorbed by the darker ocean underneath, disrupting the world’s weather and inflicting punishing and hugely expensive climate impacts in the U.S., U.K. and around the globe.

The loss of sea ice also is rearranging geopolitical power in very dangerous ways for the West, as Russia and China cooperate on newly opened Arctic sea lanes and plot to jointly exploit oil, gas and other minerals made more accessible as the ice disappears.

But there is still a choice: temporary riches from oil and gas for a few, or planetary safety for all.  This should be an easy call.  But it doesn’t seem to be.

Read more.

This story was originally published by The Messenger on July 11, 2023.

Jacoby for The Neoliberal Podcast: Building a New Ukraine

 

The war to fight Russia’s invasion is the most important story in Ukraine. But what comes after the war? Tamar Jacoby, head of The New Ukraine Project, joins the podcast to discuss Ukraine’s efforts to build a stronger society. We discuss Ukraine’s history of poverty and corruption, what’s being done to address issues like corruption, what the Ukrainian people really want, and how much more liberal and democratic Ukraine can become in the near future.

Bledsoe and Gresser for The Messenger: A Trade-Based Climate Policy Can Cut Emissions Globally

By Paul Bledsoe and Ed Gresser

The recent reopening of diplomatic dialogue by Secretary of State Antony Blinken and Chinese leaders highlighted the enormous importance of climate change action by the world’s two largest greenhouse gas emitters. But it did not yield immediate progress on China’s huge annual carbon emissions.

In contrast, the U.S., European Union and their G7 allies are taking historic actions to reduce greenhouse emissions. America’s effort includes hundreds of billions of dollars in subsidies for domestic private-sector investments in clean energy, intended to reduce emissions by 50% or more by 2030 and reach “net-zero” emissions before mid-century.

Action by the G7, however, isn’t nearly enough. Total global emissions continue to grow, setting another record last year. The reason is emissions growth from large middle-income countries. China produces nearly one-third of the world’s 36 billion tons of annual carbon dioxide emissions, more than all developed countries combined, while Russia, India, Brazil and Indonesia add 5.6 billion tons. Emissions from all these countries are still rising.

As emissions and global temperatures increase, hugely expensive and deadly climate impacts are multiplying, from last year’s floods in Pakistan to this year’s Canadian wildfires and many others in every region of the world. These are clear warnings of a future of far more devastating climate disasters unless global emissions begin falling very soon.

Read more.

This story was originally published in The Messenger on July 3, 2023.

PPI’s Trade Fact of the Week: American colonies’ ‘official’ tea imports in 1772: 370 tons

FACT: American colonies’ “official” tea imports in 1772: 370 tons

THE NUMBERS: Vessel calls at Boston Harbor –

2020:         779*
1772:           845

* Cargo vessels; adding fishing vessels and cruise ships, the annual total is likely around 1,500. 

 

WHAT THEY MEAN:

A post-Fourth coda:

The Declaration’s opening paragraphs speak to aspirations — “Life, Liberty, and the pursuit of Happiness” — and the responsibilities of government.  The actual declaration of independence, “these United Colonies are, and of Right ought to be Free and Independent States”, comes at the close.  In between is a list of 27 grievances, of which the sixteenth is a trade policy complaint — “cutting off our Trade with all parts of the world” — and the seventeenth is a general problem of taxation appearing in the form of tariffs. (“Imposing Taxes on us without our Consent”.)  Apart from the patriotic images the list elicits – chests of tea falling into the harbor, red-coated soldiers patrolling colonial Boston, the Continental Congress meeting in Philadelphia — the grievances both refer to very specific events of 1773 and 1774, and raise larger questions about how trade policy and commerce interact with governance, personal rights and liberties, and war.

Background: Just before the revolution, the American colonies had a population of about 2.15 million spread out along the Atlantic seaboard, with the largest concentrations in Massachusetts, New York, Pennsylvania, and Virginia. They appear to have made up about 20% of the population and 30% of the “GDP” of the British empire, and had very busy maritime economies.  Modern attempts to estimate a trade-to-GDP ratio for the early United States in the 1790s show imports at something like 17% of GDP and exports a bit less — figures very close to those of the 2020s — and these ratios were probably higher before the Revolution. Actual figures collected at the time illustrate: The Port of Boston served a Massachusetts population of about 280,000 and reported 845 ship arrivals in 1772, the year before the Tea Party.* Of this total, 93 came into port from Britain and Ireland, 20 from continental Europe, 216 from the Caribbean, and 427 from other North American ports. Adding New York, Philadelphia, Hampton, and Charleston to the Boston figures gives a total of 3,076 arrivals, including 393 from Britain and Ireland, 230 from Europe, 31 from Africa, and 985 from the Caribbean.

In financial and product terms, outbound vessels carried about £3.4 million a year in colonial exports, of which about half (by value) went to Britain and Ireland, a quarter to continental Europe, and a quarter to the Caribbean. These were mostly resource products and agricultural goods. The top 1772 export, accounting for a bit more than a quarter of the total, was £907,000 worth of tobacco from slave-worked plantations in the mid-Atlantic. Next came £397,000 of New England fish, £504,000 of flour and bread, £341,000 of South Carolina rice, and on down through indigo, wheat, furs, whale oil, horses, and a few manufactured goods including wooden barrels, pig iron, and ship masts. British “Navigation Acts” dating to the 17th century regulated several of these products quite strictly (for example, on grounds of naval need the colonies weren’t allowed to ship timber anywhere but Britain) but don’t seem to always been very energetically enforced in other areas. The Declaration’s two trade grievances, relating to events of 1773 and 1774, are as follows:

(1) “Imposing taxes without our Consent”:  Parliamentary laws in the 1760s imposing a series of taxes — first document-stamping, then imported molasses, paper, glass, sugar, and tea — opened up the taxation-without-representation argument. The Tea Party event (December 16, 1773) was the last phase in this dispute, and adds vivid global-economy color to its more abstract intellectual and constitutional core. To recap:  about three dozen “Sons of Liberty” raided three Nantucket-owned ships chartered by the British East India Company, which then administered Britain’s relatively new Asian empire (concentrated in present-day Bangladesh and the Calcutta hinterlands along with southern India and Bombay but quickly getting bigger) and handled China trade. The actual tea thrown into the harbor, collected in 342 wooden chests weighing about 125 kilos each, had all been purchased in Guangzhou in 1771. It included 75 chests of green tea, 240 of low-priced bohea, 15 of upper-class congou, and 10 of elite Fujian souchong. Together it weighed 46 tons, or about an eighth of the year’s British 370 tons of tea sales to the colonies.

The grievance prompting this event was a 3 pence-per-pound tea tax, kept in effect since 1768 though the other objectionable taxes had been withdrawn in 1770. In passing the May 1773 “Tea Act,” Parliament’s main ‘policy’ goal was to bail out the East India Company, which had nearly bankrupted itself during the conquest of Bengal. The Company had originally purchased the tea intending to auction it off in London, but found itself stuck with more than it could sell during an economic downturn. (Having sat in warehouses for two years, it might have gotten a bit moldy.)  In more ideological terms Parliament wanted to (a) enforce Navigation Act regulations barring colonists from buying tea from other sources, amid probably exaggerated claims that as much as 85% of colonial tea came tax-free from the Netherlands via colonial “smugglers”, and (b) insist once again on the very grating point about Parliamentary rights to tax the colonies without their approval.  Bostonians weren’t alone in their annoyance: Philadelphians boycotted a similar East India Company tea ship in the same month (the captain left without a fight), and New Yorkers had planned to do the same, but their tea ship got blown off course in a storm and wound up in Antigua. The last tea ship, sent to Charleston, off-loaded the tea but couldn’t sell it.

(2) “Cutting off our Trade with all parts of the world”: Parliament learned of the Tea Party in late January of 1774 — the trans-Atlantic voyage took about a month — and responded in March with five new laws collectively called the “Coercive Acts.” The first of these, the “Boston Port Act,” banned shipping from Boston with the exception of ships delivering food and fuel. The loss of 800 or more ship visits and nearly a million pounds worth of exports, and the presumed intention to wreck the Massachusetts economy as retaliation for the Tea Party, likely discredited whatever pro-U.K. sentiment remained, even apart from the four other laws. (Two of them involving “quartering” soldiers at local expense, the other two reducing local government and judicial rights. These points are noted in grievances #11, 14, 21, and 22.)

Massachusetts Bay diplomats in turn requested a sympathy boycott of trade with Britain from the other 12 colonies. The Continental Congress, meeting in September, agreed with an exception for rice exports. By 1775 imports had dropped from £2.59 million to £0.2 million, and most of this seems to represent flows of weapons to the British garrison in Boston. The export boycott program worked less quickly, but effectively enough that almost all trade had ceased by the time the Continental Congress reconvened in June of 1776.

PPI wishes you a happy, if slightly belated, Fourth.

* By way of context, this 845 vessel-call total compares very favorably to the Department of Transportation’s report of 779 cargo vessel arrivals in Boston Harbor in 2020. Cruises, non-existent in the 1770s, add another 115 or so, and two or three fishery vessels arrive daily, so a combined total is likely around 1,500.

 

 

FURTHER READING:

The National Archives’ official Declaration text.

The Massachusetts Historical Society’s Tea Party recap.

Colonial data on demographics, maritime economy, import/export, the 18th-century slave trade, and other topics from the Census Almanac of Statistical Abstracts.

… and the Department of Transportation’s Boston Harbor cargo snapshot.

From the World Green Tea Association in Japan, a concise piece on the British East India Company and the tea trade.

 

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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Marshall for NYDN: Colleges without affirmative action: What the schools must do now

By Will Marshall

Once again, the U.S. Supreme Court has brushed aside its own precedents to achieve a long-sought conservative goal — banning race-conscious college admissions. Unlike last year’s inflammatory decision overturning abortion rights, however, this ruling is likely to be popular.

Americans have been leery of race, ethnic and gender preferences since the Nixon administration first introduced them in 1969. According to a recent YouGov poll, two-thirds of the public say colleges shouldn’t factor race into their admissions decisions. Majorities of whites, Hispanics and women take that view, as does a plurality of Blacks, Democrats and liberals.

But polls don’t quite settle the issue. Neither will the court’s ruling that the University of North Carolina violated the 14th Amendment’s “equal protection” clause and Harvard violated the 1964 Civil Rights Act by using race as one of several factors in deciding which students to admit.

The court’s ruling only applies to affirmative action in college admissions. Programs that put a thumb on the scale for women and minorities seeking jobs as cops or firefighters, in competition for government contracts and radio licenses, and for private sector jobs are pervasive — and remain controversial.

Keep reading in the New York Daily News.

PPI Urges Dems to Pursue More Responsible Higher Ed Policy After SCOTUS Cancels Debt Cancellation

Ben Ritz, Director of the Progressive Policy Institute’s Center for Funding America’s Future, released the following statement in reaction to the Supreme Court’s decision to strike down the Biden administration’s attempt to unilaterally cancel up to $20,000 per borrower:

“The Supreme Court has officially ruled what we have known for some time now: U.S. presidents have no constitutional authority to unilaterally spend hundreds of billions of taxpayer dollars without Congressional approval. The Court’s decision comes after bipartisan majorities in both the Republican-controlled House and Democrat-controlled Senate voted to overturn the president’s attempt to unilaterally cancel over $400 billion of student debt.

“The message to the president from his co-equal branches of government couldn’t be clearer: it is time to move on from this misguided effort. Even if the president’s action were constitutional, there is no sound policy justification for asking Americans who don’t get the benefits of a college education to pay for the debts of those who do.

“We hope the White House will work with Congress on comprehensive solutions to ensure pathways to well-paying jobs are affordable and accessible for all. That means making real reforms to curtail the skyrocketing cost of college rather than using taxpayer funds to paper over the problem, expanding skills-based training options for non-degree students, and offering limited debt relief targeted only toward those most in need.”

PPI recently published a data-driven report on why the far left’s obsession with canceling student debt is deeply misguided and worsens the “diploma divide” in America.

PPI’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. It tackles issues of public finance in the United States and offers innovative proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, and transform our tax code to reward work over wealth.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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Media Contact: Amelia Fox – afox@ppionline.org

Marshall for The Hill: Red states take aim at public schools

By Will Marshall

The states, said Supreme Court Justice Louis Brandeis, are America’s “laboratories of democracy.” Today’s red-state Republicans see them differently — as staging grounds for cultural revolution.

Despite polls showing that most Americans favor legal abortion, 15 Republican-controlled states have passed laws depriving women of their reproductive rights. They are also targeting the nation’s public schools.

So far this year, 10 red states have enacted laws expanding school vouchers and similar subsidies to private schools. Arizona, Iowa, Utah, Oklahoma and Florida have gone farther, passing “universal voucher” bills that allow even the wealthiest families to collect public dollars for private schooling.

Republican support for vouchers isn’t new, of course. In the past, however, conservatives at least pretended to be concerned about low-income and minority parents whose children are trapped in bad urban schools. Now it’s clear their idea of “school choice” is to give all U.S. families with children financial incentives to exit public schools.

Read more in The Hill.