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Is poverty in the eye of the beholder?

25 Feb 2008 12:40 pm

Incidentally, there's a pretty interesting discussion in the comment thread of Tyler Cowen's Cuba post at Marginal Revolution. Tyler says:

A simple checklist would start with the question of whether an apologist has visited both the Dominican Republic and Cuba. And a non-communist Cuba could have done much better than the DR. It is a fascinating place for visitors, but right now the quality of life in Cuba isn't close to that of the DR or for that matter Honduras, the second-biggest Latino mess in the hemisphere. While we're at it, let's not forget northern Mexico or even central Mexico. It's time to stop apologizing for communist dictatorships; are you really so taken with the idea of confiscating property as to overlook decades of tyranny, impoverishment, and human misery? Yes I am familiar with the UN social indicators; I say you need to visit each of these countries, preferably speaking Spanish, and then report back to me.

A couple of commenters claim that they have visited Cuba, and it looks a lot better than Northern Mexico. It's pretty unambiguously clear to economists that quality of life is higher in Northern Mexico, which is the richest part of a country that has a per-capita GDP three times higher than that of Cuba. So why the difference?

Possibilities:

1) Sample error: they visited the nicest parts of Cuba, and the nastiest part of northern Mexico.

2) The economists are wrong: per-capita GDP is missing important components of quality of life; a more egalitarian distribution of a little income makes people, on average, better off than a much higher GDP unequally distributed.

3) Deep poverty is much more picturesque than moderate poverty. Poor countries have their old colonial buildings still standing, because no one had the money (or the reason) to tear them down and put up something bigger. The countryside is dotted with adorable houses made out of natural materials and natives wearing colorful traditional garb. Animals graze in verdant fields, besides teams of sowers and reapers. Middle income countries are smoggy, and almost everything looks like a cheaper, shabbier version of what you get in the US. Scenic landscapes are despoiled by cinderblock buildings with hideous tin roofs, or trailers; cities are choked with boxy modern buildings that look something like our housing projects. The genteel decay that looks gothic and intriguing on an old Victorian mansion just looks seedy when it's eating away at badly poured concrete. Affluent Americans underestimate the utility value of things like having personal space, or an automobile.

4) Cuba was relatively wealthy in 1959; it therefore has more of the markers, like old majestic buildings, that we associate with wealth.

Obviously, 2 is true to some degree, but not enough to explain why you would think Cuba is better off than northern Mexico. Northern Mexico could be a lot more unequal than Cuba and still provide a better standard of living to its citizenry. Especially since a lot of big improvements in third world poverty come not from transfer payments, but from fixed infrastructure like electricity, sanitation, and decent roads; higher per-capita GDP simply provides more of those things. I'd put a lot of emphasis on 4, and especially 3; I have no idea what role 1 might play.

Comments (30)

Watched a show on the Food Network with Meriel Hemingway where she visited the places Papa used to haunt. I have to say that for Cuba, a whole lot of #s 3 & 4 apply.

The island has buildings and locals that are absolutely beautiful. While there are some natural sites in northern Mexico that are nice, they do not compare to Cuba.

#4 is implausible if you've actually seen what the "majestic" old buildings in Havana look like. Although it is true than in terms of GDP per capita Cuba was one of the wealthiest countries in the western hemisphere in 1960.

#3 seems off the mark w.r.t the poor countryside I've seen in Latin America, with its ramshackle shacks etc. Deep poverty is quite different from semi-prosperous peasants pursuing traditional agriculture. Think of the difference between Bangladesh and VietNam.

I'd go for #2 - a standard two room concrete building with a dirt floor plus runing water and electricity - which characterizes at least some of the Cuban countryside - looks better than what you'll see in parts of Honduras or even Panama. On the other hand, you will see lots of consumer goods in those parts of Panama and Honduras vs approx. zero in Cuba.

I can imagine at least one other option. Perhaps their visit to northern Mexico consisted of the rundown, ugly, and full of drunks and prostitutes tourist part of Tijuana; that is where most people actually go. They should try Hermosillo or Chihuahua or Ciudad Juarez, or for that matter the nicer parts of Tijuana. I might add that I've seen only the nicest parts of Cuba. Insofar as northern Mexico has a problem of extreme poverty, it is because people from the more indigenous parts of Mexico use it as a jumping off point for crossing the border. They set up temporary quarters which are less than dignified, but of course you should consider to where they are headed.

I loved watching Brad DeLong argue with his commenters over their sympathy toward Castro...he even called Betram over at Crooked Timber a candidate for the stupidest man alive for his fawning over Castro. Market-minded liberals, especially economists like DeLong, often forget what lies just beneath the surface of many seeming passionate Democratic allies.

The cautious market intervention ideas of the likes of DeLong and others often blur together with the ideas of the liberal activists in a way that the stark differences are totally missed. The common hatred for the GOP tenuously glues them all together and masks some serious differences.

The devil is always in the details. And when those details get smoked out, DeLong finds himself calling his posters "worms":

DeLong:It's time to stop apologizing for communist dictatorships; are you really so taken with the idea of confiscating property as to overlook decades of tyranny, impoverishment, and human misery?

Much to his dismay, DeLong needs to acknowledge that the answer is sadly "YES" in many cases at the activist level. YES. YES. YES.

Liberal Economists should make greater effort to differentiate themselves from their partisan allies in ultra liberal wing who essentially use the same rationales as budding socialists and communists in the past. The Anti-GOP sentiment only goes so far.

there are good and bad things about cuba's government. Yes, everyone is poor. But look how everyone seems to be happy. Cubans are known for being happy, giving people. No one is absolutely starving as they are say in mexico. You don't see kids out in the streets dealing dope and selling chiclets. They get ration cards, even though very small for rice beans, and I think even tabacco and rum. Does mexico do that? Does panama? Does the honduras. They get medical care for free. Yes there is a shortage on medicine, but maybe that wouldn't be such a problem if the US would lift that embargo trade. I mean, the US says we don't trade with communists. Well we certaintly trade with china. Almost everything we have is made there. And they're one of the hugest communist countries. The problem w cuba is that the people make at least 6-8 dollars a month, but the cost of everything else is still the same. Shoes are still 15 dollars. They can't better themselves. They work all day but have nothing to show for it at the end of the day. Their family from the US can send them what money that the cuban gov't will let them send. The cubans can save it, but even if they wanted to, they can't buy a bigger house than the one room shack in guanabacoa that is housing a husband, wife, and 2 kids. Thay can't buy a car. The gov't won't let them. That's why everyone is trying to be a musician or athlete. Because than you can buy whatever you would like.

Victoria,

"Yes, everyone is poor. But look how everyone seems to be happy. Cubans are known for being happy, giving people. No one is absolutely starving as they are say in mexico."

Oh please. Just stop. JUST STOP. This is what DeLong meant by "worms".

My GF, a liberal democrat, visited Cuba was simply horrified at the poverty and totalitarianism. Why oh why do people insist on seeing "the glass half full" when there are barley a few humid drops in the bottom of the glass (Cuba) while insisting on seeing an empty glass when the glass is indeed half full (Mexico). It amazes me.

Cuba sucks. And no handful of romanticized and exaggerated bright spots can change that. I'll take Mexico any day.

So...the Noble Savage is not only alive and well; he has groupies.

It's pretty unambiguously clear to economists that quality of life is higher in Northern Mexico, which is the richest part of a country that has a per-capita GDP three times higher than that of Cuba.

OK, it's been quite a while (almost 30 years) since I've been in Mexico, but from what I remember, calling northern Mexico "the richest part of [the] country" is not saying very much.

I vote #1, which subsumes #3.

"Yes, everyone is poor. But look how everyone seems to be happy."

I imagine plantation owners uttered similar nonsense:

"Our darkies are happy; look how they always sing and dance."

Jesus.

More possibilities:

5) The commenters are leftists viewing Cuba through rose colored glasses.
6) The commenters are lying.

Here is an interesting article about the reactions of a couple of self-described "unreconstructed paleo-lefties" on a trip to Cuba "in search of a left-wing Utopia."

The Spectator

In reply to liberalrob - if the last time you visited Mexico was 30 years ago, then go visit again. You truely have no idea what the country is like. I have visited Mexico most recently in 2004, and for the 1st time in 1983. The differences between then and now are like night and day. Since your last visit was even earlier, and it is 4 years later now, you are probably going to be shocked by the changes. Mexico is an up and comer in the world of developing counties - many people have compared it to South Korea in the early 80's. At that time, all anybody knew about Korea was the Korean war. Today it is a major exporter of automobiles, cell phones, flat panel TV's high end appliances, ships, steel, etc. In 20 years Mexico is likely to be in the same position South Korea is now. The old socialist collectivist Mexico is in the scrap bin now. That is the one you saw 30 years ago. In it's place is a new Mexico - one that still battles corruption and poverty, but with new wealth and vigor, and that allows it's citizens to have hope for the future, and to control their own destiny.

Eric wrote: The old socialist collectivist Mexico is in the scrap bin now. That is the one you saw 30 years ago. In it's place is a new Mexico - one that still battles corruption and poverty, but with new wealth and vigor, and that allows it's citizens to have hope for the future, and to control their own destiny.

That can't be right. The root of all evil in the United States is our lack of a socialist collective, preferably armed with moral imperative. I know this because several people on the Internet told me so on this very website.

Glowing reports about Cuba now remind me of the glowing reports various "liberals" gave after touring Russia in the 1930's - a period when the Soviets were sending trainload after trainload of successful farmers ("Kulaks") off to die in Siberian work camps while tens of millions starved due to crop failures.

I would not forget the crime and drug wars element. Someone up there cited Ciudad Juarez as a place which could impress visitors more than Cuba - are you kidding me? Yeah, it is XX times richer, but have fun getting robbed by the cops.

Don't have any particular stars or experience with Cuba - I've been loyally obeying the travel ban - so someone with experience please feel free to jump in about their levels of crime / corruption or other such indicators which do a tremendous amount to affect one's enjoyment of life.


markm - I agree that the glowing statements about Cuba are a little ridiculous. Cuba is politically and economically a bad place to live in. Mexicans are freer and wealthier. OTOH Cuba isn't Russia under Stalin either. But I guess your point may be that they are similar in some ways, even if Cuba is much better than Stalin's Russia, and the reports aren't quite as dishonest or deluded.

I haven't been to Cuba, but have many friends who have, and know some Cubans here in Vietnam.

The general sentiment of Cubans who arrive in Vietnam, as expressed by a Cuban woman in her 40s who recently arrived here, is: "Cuba is so fucked."

There is nothing good to be said for the traditional command economy, and nothing good to be said for societies which arrest people for expressing their opinions, engaging in risque private lives, or forming peaceful organizations.

However, there is much to be said for societies which actually do provide universal education and literacy; which give people universal access to health care that is adequate and appropriate to their country's level of development; and which provide high levels of safety and freedom from violent crime. Indeed, the world over, these last phenomena -- relative equality and access to public goods, and freedom from crime -- seem to be closely linked.

Finally, the "picturesque poverty" indictment is too glib. What is "picturesque" about village societies is often not so much that they are full of mud huts with pleasing color combinations, but that they are clean and have vibrant public social lives -- healthy values and self-respect, for want of a better phrase. When I think about how it felt to be in African subsistence farming villages, and how it felt to be in American Indian reservation trailer parks, well, the American Indians are a hell of a lot richer in dollar terms; but in those trailer parks, you think, this is a sick place, and these people are beaten and angry, and I don't feel safe here after dark. In the African villages, you feel, these people are dirt poor hardworking citizens with families. That's a real difference, and I would imagine it could apply to Cuba too.

Even going by the UN Cuba is only slightly above Mexico, all Mexico, in development.

http://hdr.undp.org/en/statistics/

The parts of Mexico near Guatemala probably bring Mexico's average down.

I think it is true that Cubans are more literate and less likely to die in childhood or infancy than Mexicans. I think this was likely true before Castro, but admittedly I don't know for certain. This explains most of the UN indicators.

In both countries over 90% are literate. I'm going to assume most of those who are literate are over 5 years old. So for that 90% Mexico is generally going to be a better place. There is much more availability of clean water, telecommunications, literature, travel, and self-improvement. (Exempting maybe Chiapas and a few other places in the South) Mexicans have a higher rate of Life Satisfaction than Cubans.

http://www.happyplanetindex.org/list.htm

Cuba is higher on this index due to having a greater life expectancy and less ecological imprint. (I couldn't find a better source to compare life satisfaction.) Which might lead to Mexico, plausibly, being more polluted in urban areas.

If you are a child Cuba might conceivably be a better country. Children's lives are restricted anyway and they're not exactly in a position to travel on their own or run a company. Possibly Cuba is also better if you have a respiratory element, if it's truly less polluted. (Although smoking rates might be higher in Cuba) If you are a adult without respiratory problems than Mexico is probably better. Bare in mind I've never been to either country.

It's disgusting to see that we now have people willing to eulogize Pinochet in the same way leftists have exonerated Castro. Let's get this out of the way: Pinochet was one of the better dictators out there, but only in the sense that some murderers are better than others.

3,000 people dead (killed for "political reasons"), but ten times that tortured. Thousands more exiled and hunted down on orders of Pinochet. Hundreds raped. Let's not even talk about forced disappearances. The psychological fear is unspeakable - my mother lived through the Marcos era in the Philippines, and her fear was palpable when a friend working for the political opposition in another Asian authoritarian democracy was taken away from his office without warning by men in plainclothes. (He fortunately resurfaced unharmed in a police lockup.)

Allende would have ruined Chile, no doubt. Thanks to Pinochet Chile is one of the strongest countries in Latin America. That does not exculpate Pinochet or his regime.

I'd also like to see where this "didn't treat his country like a personal fiefdom" crap is coming from. Evidence of his secreting money in foreign banks is in the public domain. His corruption even continued after he left the office of president.

Whoops, that comment was meant for the previous entry. Yikes.

"Indeed, the world over, these last phenomena -- relative equality and access to public goods, and freedom from crime -- seem to be closely linked."

This is a matter of opinion, particularly for communist countries. Once the government steals pretty much everything, there's not much left for the amateurs, but all that you had or could have had is still gone.

I always found it bizarre to hear people claim that there was less corruption in China before the market reforms. There was still plenty of corruption, it's just that it was less monetary, because the government had already picked everyone dry. But during the Cultural Revolution, if a woman that had been sent to the countryside wanted to ever go home, she had to allow herself to be raped by the local Party leader if he was in the mood. I'd rather have the option of paying money.

Perhaps you're thinking that at least there's less fear of violence from the government than from a mugger on the street, but even that's questionable. The correlation between the willingness of a government to arbitrarily confiscate your personal possessions and its willingness to arbitrarily confiscate your freedom is pretty high. And, as a practical matter, brutal repression is generally necessary to enforce economic 'equality', because it's so inefficient and so widely seen as unfair.

Theft is theft, and thus I would argue that there's substantially more crime in areas with forced 'equality'.

For #3, Cuba is a Caribbean island. A poor beach is still a beach. A well-off industrial park in northern Mexico is still an industrial park in the desert.

But I think there is also something to some of the other comments about the picturesque-ness of some types of poverty. Rural African villages are extremely poor -- in many cases, a quarter the per cap GDP of urban Sri Lanka (which is dirt poor). But in Sri Lanka you see dirty tin shanties built alongside railroad tracks, covered in soot and nasty chemicals. In rural Uganda, you see rather "clean" mud huts or shops built out of old oceanic shipping containers, and generally happy people. I would have thought for sure that Sri Lanka was the poorer country, given the grime and number of beggers. But this is clearly not the case when you compare infant mortality levels, average lifespans, literacy rates, etc.

I'm curious as to how many of those who have commented have visited Cuba and/or Mexico outside of the tourist enclaves. And how about the author? I suspect the number is very few.

Talking about GNP is swell, but doesn't at all address the distribution of wealth. Carlos Slim is the richest person in the world, yet millions of Mexicans live in abject poverty.

I have numerous times in recent yeas visited the backwaters of Cuba (Pons or Playa Baracoa anyone?) and have lived and traveled throughout Mexico for going on three years.

Cuba is a poor nation, but the poorness is equally distributed. Mexico, on the other hand, wealth, or lack thereof is not at all equally distributed.

To suggest that "Deep poverty is much more picturesque than moderate poverty. Poor countries have their old colonial buildings still standing, because no one had the money (or the reason) to tear them down and put up something bigger." is to reveal one's complete ignorance of the subject.

I wrote some reflections based on my own travel to all three places at Economists for Obama:
http://econ4obama.blogspot.com

By the way, the only countries in Latin American and the Caribbean which lead Cuba in the "Human Development Index", according to the United Nations Development Program's "Human Development Report 2007/2008", are Barbados (#31 in the world), Chile (#40), Uruguay (#46), Costa Rica (#48), and the Bahamas (#49). Cuba is at #51 and Mexico is at #52.

For comparisons, Brazil ranks #70, the Dominican Republic is at #79, Venezuela at #74, Grenada #82, Paraguay #95, and Honduras #115.

The human development index is explained here:
http://hdr.undp.org/en/humandev/

GNP is an expression of the "mean" wealth. That is total wealth divided by the number in the population. GNP is hardly a measure of the general well being of folks. Die and the GNP goes up, come down with terminal cancer and the GNP rises, wreck your car and the GNP rises, and etc.

I have been to Cuba. The people who report that Cubans are prosperous also report that Cubans are unafraid to speak their minds.

It is perfectly apparent that Cubans are frightened and desperate. Those who report differently, are simply lying.

"Cuba is a poor nation, but the poorness is equally distributed. Mexico, on the other hand, wealth, or lack thereof is not at all equally distributed." Chris Brown

First I'll leave aside whether that's even true. (Do you really think the Castros or the people running the hotels are "equally poor") The idea seems to be it's better to live where everyone is kind of miserable than to live in a place where there's a range from great happiness to utter despair? I can see the logic in that, but not everyone would agree.

Also in my case I was trying not to go by GNP. Cubans are more undernourished

http://hdrstats.undp.org/indicators/63.html

Among other things. Although as mentioned I agree they do well on health, particularly of children, and literacy. However they're not happy, they're oppressed, and they have few opportunities. It's better to be an average Cuban than to be a Mayan in Mexico, but I'm not sure if that means being in Cuba is better for average citizens.

I live in Honduras. There are many Cubans here that have escaped from Cuba and come here to start over. They do tend to have a better education and strong work ethic than the locals, but all will agree life is 100% better in Honduras. BTW every one of them owns a business of some kind, small or large.
Rick

I´m from Baja California and I have visited Cuba just one time. I think that in therms of quality of life right now is even in both places. Cuba has a lot of beautiful places, huge old buildings and gorgeous beaches that has to do with the point #3. But speaking of civil rights, the perception of freedom and the poverty issues are a big factor comparing both places. As we now Castro's regime in Cuba was an heroic government in the sixties, but nowadays has become a villian.

Northern Mexico has incredible cities and virgin lands, although people are free to speak their mind and have the freedom to start a business, things aren't as good I say. Narcotics, poverty and violence are common issues there. So I would say that people in both regions have problems with his quality of life by diferent factors. One is due to the excess of goverment and the other by the lack of it.

I´m from Baja California and I have visited Cuba just one time. I think that in therms of quality of life right now is even in both places. Cuba has a lot of beautiful places, huge old buildings and gorgeous beaches that has to do with the point #3. But speaking of civil rights, the perception of freedom and the poverty issues are a big factor comparing both places. As we now Castro's regime in Cuba was an heroic government in the sixties, but nowadays has become a villian.

Northern Mexico has incredible cities and virgin lands, although people are free to speak their mind and have the freedom to start a business, things aren't as good I say. Narcotics, poverty and violence are common issues there. So I would say that people in both regions have problems with his quality of life by diferent factors. One is due to the excess of goverment and the other by the lack of it.

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