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Joining me on the podcast today is Kevin Corinth, a senior fellow at the American Enterprise Institute, where he researches economic mobility, poverty, safety net programs, homelessness, social capital, and other issues. He is a co-author, along with Richard Burkhauser, of a recent paper titled “Poverty and Dependency in the United States, 1939 to 2023.”

What motivated you to revisit nearly a century of American poverty trends?

We have a lot of evidence about the extent of economic progress over the past 50 years or so. My co-author, Richard Burkhauser, and I did a paper a few years ago showing that, since President Johnson declared his war on poverty, we’ve seen a dramatic decline in poverty in the US from a 20 percent baseline to less than 2 percent today. In this paper, we wanted to ask, “What happened before that? Were we seeing declines in poverty before we had a large and expanding safety net?”

I also think that the idea that living standards have not improved over time is motivating a lot of today’s political turn toward socialism. And if we lose our understanding of what we’ve gained through our imperfect capitalist system, that could have very deleterious effects on policy today.

Before we get into the findings, why should people care about how we measure poverty?

A lot of people would agree that you should judge a society based on how it treats its most vulnerable members. I subscribe to that. So measuring poverty matters a lot for people’s views about how society is doing, which matters a lot for determining which policies to adopt.

You measure poverty almost the same way that you measure incomes. The only difference is that you have to pick a poverty line because poverty is the number of people with an income below some threshold. A lot of the debate on poverty comes down to where to draw that line. Where you draw the poverty line is a value judgment. It’s scientifically arbitrary, but it’s not arbitrary in terms of our values. As an economist and social scientist, I don’t get to decide that. You tell me where you want me to draw that poverty line, and then I’ll update it with inflation each year to measure our progress.

The official poverty measure is not measuring poverty well. It tries to be an absolute measure in that it increases the poverty line with inflation, but it uses an inflation measure that overstates how much prices go up each year. It also doesn’t include in-kind transfers like the SNAP program, which is our largest non-medical transfer today. It doesn’t include Medicaid or refundable tax credits. It doesn’t adjust for taxes at all.

Based on the official poverty measure, we’ve seen essentially no decline in poverty over the past 50 years because of these problems. When Rich Burkhauser and I looked at it, we found 90 percent reductions. So how you adjust the threshold and which resources you include matters a lot. Fortunately, almost everyone recognizes that the official poverty measure doesn’t make sense.

Among those who do recognize that poverty has come down in the United States, many assume that it has fallen because of government redistribution. Your central finding is that poverty fell dramatically before the War on Poverty even began. Could you tell me more about that result?

We’re not looking at the causal effect of the War on Poverty. I think we’d argue that it’s not possible for someone to estimate the causal effect of such a massive change in society. However, a lot of people want to say, “Poverty has fallen a lot since 1963 or 1964. That must have been caused by the great expansion of the safety net.” We strongly push back against that assertion, because we found that poverty was actually falling in the 24-year period before the War on Poverty began.

In the paper, you distinguish between poverty reduction through government transfers and poverty reduction through rising earnings. Why should policymakers pay attention to dependency as well as poverty?

That’s the exact way that President Lyndon Johnson thought about it when he declared the War on Poverty in 1964. He wanted to reduce poverty, but he cared a lot about the way in which we did it.

You can reduce poverty by more redistribution, providing more resources to people at the bottom. But that comes with some adverse behavioral effects; maybe they work less, and there could be reductions in marriage, and that could counteract some of the benefits. The other way, which is the one that President Johnson wanted, was to reduce poverty by increasing people’s earnings. People are usually better off, materially and psychologically, when they are able to overcome poverty through their own efforts.

Today, with our spiraling federal debt, there’s also some point at which we cannot continue to expand these programs. If we want to see people flourish and rise up the economic ladder, it’s going to require more than just government transfers. Whenever you redistribute resources to people with lower incomes, these programs are all means-tested. That creates an implicit tax on increasing your own earnings, because if you increase your own earnings, you’re going to reduce the amount of transfers that you receive. Those penalties can stop people from moving up the economic ladder. So those are all reasons why it’s typically better, if possible, to reduce poverty through increases in market income as opposed to more redistribution.

In your view, how much of the post-1960s slowdown in market income growth among lower-income households may be connected to some of those changing incentives from welfare policy itself?

I don’t think it’s the whole story, but it is probably one reason that we’ve seen diminished growth.

There are a few ways that redistribution can slow growth. One of them is by reducing the incentives for people to work, invest in themselves, and get married. It also requires a lot of taxes, which is possibly even a bigger factor. We have high effective marginal tax rates that disincentivize working and investing, which can slow growth. We also borrow money to fund these programs, and the more we borrow, the more taxes we pay in the future. It also means higher interest payments on our existing debt, which slows growth by driving up interest rates and reducing investment.

Many people today are arguing that unconditional cash transfers are the future of social policy in the age of AI.

I worry a lot about the universal basic income debate. My former colleague at AEI, Charles Murray, has talked about it, although for him universal basic income was a replacement for the large safety net that we already have. His idea was to spend the same amount of money, but do it in a way that doesn’t have some of these perverse incentives. The debate has moved on from that idea. Now people are saying,

“Let’s keep the existing means-tested programs and also add a universal basic income for everybody, even middle-class people.”

In the short term, that’s completely unrealistic. We don’t have the budget for it. The cost would be astronomical, and you certainly could not do it just by taxing the rich. You would need vast expansions in taxes for middle-class people too.

However, I worry a lot about universal basic income in the longer term. I don’t know what’s going to happen with AI, but I think in the back of people’s minds there’s this belief, and maybe they’re right, that with AI and all of the benefits it brings, we could see much stronger economic growth in the future. I think that people see that as an opportunity for a universal basic income, and think that once we can afford it, we should implement it. But universal basic income payments could discourage people from working, and especially from entering the labor market. Younger workers may decide, “I may not need to enter into the labor market.” And if you have less labor, you also have less of the augmentation effect of AI, which is where most of the value from AI might be created. So we could see a much smaller economic boom if the labor supply shrinks as a result of universal basic income.

Even if we don’t need human workers and we could actually get by with the machines doing everything, I still think universal basic income would be a terrible idea. People don’t just need work to fuel their own material well-being, but also for the sense of purpose that comes with contributing to society. And there will be ways to contribute to society, no matter what happens with AI.

What policies can we pursue to increase earnings opportunities for Americans without expanding dependency?

We can’t wave a magic wand and get the economic growth rate that we had during the 1940s and 1950s. And we already have a large social safety net. But we can want to design it in a way that reduces poverty and reduces dependence.

Starting in the 1960s, if you measure poverty based only on people’s market income, you see a flatlining of the poverty rate, maybe even a small increase. And at the same time, you see a greater dependence on government transfers. That pattern breaks starting in the early 1990s. Between 1990 and 2000, you see a continued reduction in poverty based on market income and a reduction in dependency.

What happened was welfare reform.

In the late ’80s, there was a lot of frustration about our cash welfare program. It was called AFDC, Aid to Families with Dependent Children. There was concern that it was breeding dependency and reducing marriage rates. In the late ’80s and early ’90s, states started experimenting with other ways of providing assistance, like having time limits on cash welfare, work requirements, and more investment into training programs and education. Then, in 1996, or early 1997, we passed welfare reform legislation that rolled those kinds of policies out nationally: time limits on assistance, work requirements, and, at the same time, expanded refundable tax credits that target families with children, including the child tax credit, which didn’t exist before 1997, and the earned income tax credit, which did exist but was much smaller until the 1990s.

In short, didn’t get any of the benefits unless you worked. And then benefits phased in as you worked more. Eventually there is a phase-out, and that has major problems, but these programs all encouraged people to enter the labor force and work. And after these reforms went into effect, we saw a growth in work efforts. Single moms had something like a 10 percentage point increase in their labor force participation. We saw many measures of child outcomes improving, including test scores and long-term outcomes. And even though we were still seeing a reduction in poverty, we were also seeing a reduction in dependency.

The 1990s example shows that, even with a large social safety net, if we design it correctly and address some of these perverse incentives, we can see reductions in poverty and reductions in dependency at the same time.

 

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“Economic growth is most important for the world's poorest people, and most of the world’s poorest live on the African continent. Are Africa’s economies growing?

The picture is mixed. In some countries, incomes have unfortunately declined in the last decades. This includes Madagascar, Zimbabwe, and Burundi. I have written about this in my brief explainer on extreme poverty.

In today’s Data Insight, I want to focus on the other side: I want to highlight the African countries that are achieving economic growth. Nine of them are shown in the chart above.

In all nine countries, people’s average incomes have more than doubled since 1990.

This made substantial improvements in living standards possible: the share of people in extreme poverty and the rate of child mortality declined in all nine countries.”

From Our World in Data.

Summary: Degrowth has gained influence by combining environmental concerns with calls for redistribution. Its central arguments, however, falsely assume that economic growth requires consuming more physical resources. Evidence suggests that economic growth can be decoupled from environmental harm, while greater economic freedom can improve social and ecological outcomes. Degrowth is more of a rhetorical strategy than a serious academic concept.

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In recent years, an intellectual movement known as “degrowth” has grown in popularity through the efforts of a small but growing group of academics and activists. Key texts that champion this ideology, such as Jason Hickel’s 2020 book Less is More: How Degrowth Will Save the World and Kate Raworth’s 2017 Doughnut Economics, appear on bestseller lists and in bookstores worldwide. In 2020, Japanese philosopher Kohei Saito published Capital in the Anthropocene (published in English in 2024 as Slow Down: The Degrowth Manifesto), arguing that Karl Marx, in his later writings, anticipated the damage capitalism would do to the environment and called for rejecting unconstrained economic growth. When Saito’s book was published, it sold an unprecedented 500,000 copies in Japan alone, and it now appears in 15 languages. The degrowth paradigm has become so popular that the Autonomous University of Barcelona now offers it as a master’s degree.

Since the mainstream left and the mainstream right agree that economic growth is an important goal—they just disagree about how to achieve growth and how the proceeds should be spent—it is important to understand the appeal of degrowth.

The main motivation is, likely, ecological: concern for the damage we as humans have done to our environment. Writing this in the hot summer of 2026 as wildfires rage across much of Europe, this motivation from degrowthers is understandable. Yet, as we will see, the evidence for the relationship between economic growth and environmental outcomes is much more nuanced and mixed. Nonetheless, enthusiasm for degrowth rests on the authors’ genuine belief that we could be on the edge of various tipping points that could seriously disrupt our planetary equilibrium.

Feeding into this concern about the impact on the planet are egalitarian impulses. Degrowth is an appealing idea for those who fifty years ago would have been socialists or Marxists of some variety. Supporters of degrowth believe the global middle class is already “rich enough.” In their mind, the solution to poverty is not more growth but redirecting growth. Timothée Parrique, author of Slow Down or Die, a best-seller in France, argues that poverty is not a question of production but of allocation, and that “attempting to eradicate poverty by stimulating GDP growth is like trying to change a car’s direction by adding gas to a full tank.”

Hickel and other advocates for degrowth work backwards from the idea of a “planetary allowance” for growth, which is the additional output that they believe the planet can absorb while staying inside safe ecological limits. They argue this “allowance” should go to those earning below the global average income. What average income should be, however, remains difficult to pin down, though Hickel has suggested that the relevant benchmark should be around $24,000, as that is currently the world average GDP per capita at purchasing power parity.¹

Given how appealing degrowth arguments are to an environmentally aware younger generation, it is worthwhile addressing the former and demonstrating that degrowth rests on a series of misconceptions about economic growth and economic history.

First, degrowthers often appeal to the simple intuition that eventually economic growth must end because continuous growth is impossible. The economist Kenneth Boulding first made the oft-repeated claim that infinite growth is impossible on a planet with finite resources (and, he added, that only a madman or an economist would think otherwise).

If growth is necessarily finite, as the argument goes, then surely the environmental stress that the planet is now showing is a sign that now is a good time to think about slowing growth down or even ending it entirely?  But the claim that we should slow growth now does not follow from the claim that growth is finite. The finitude of growth tells us nothing about when growth might end. Finite might be thousands, or indeed, millions of years. It doesn’t tell us much about the prospects for growth in our own generation or for many generations to come.

Moreover, Boulding’s argument rests on a misconception: the false presumption that economic growth necessitates consuming more resources or producing more physical stuff. This mistake goes back to critics of economics who misunderstod the marginal revolution of the 1870s (i.e., the birth of modern economics). Economic growth is about value. It means producing more of what individuals value. While degrowthers associate economic growth with environmental damage, deforestation, and disregard for our natural habitat, economic growth often brings more parks, reforestation, and cleaner air. Physicists have raised a related objection. Because the Earth contains a finite stock of matter and energy, they argue, economic growth must eventually run into physical limits.

That conclusion confuses growth in economic value with growth in material consumption. As resources become scarcer and more valuable, people have stronger incentives to conserve them, use them more efficiently, recycle them, and find substitutes. Long-run economic growth can therefore increase the value people obtain from resources even as the amount of resources used per unit of value declines.

So economic growth and environmental damage are not necessarily related. Nonetheless, degrowthers can point to the damage that increased temperatures have already caused. The practical debate therefore rests on the extent to which it is possible to decouple economic growth from environmental harms. UK greenhouse gas emissions in 2024 were 54% below 1990 levels even as the British economy grew by approximately 84%. French emissions fell by around 32% in the same period. Degrowthers, in response, point out that some of these reductions came from shifting polluting production overseas and that global emissions have continued to rise. I think the evidence suggests that decoupling is eminently possible and, in fact, happening, but also that the huge uncertainties around future climate change mean we shouldn’t be complacent about the risks involved.

Degrowthers talk about redirecting the global economy or downscaling it. That brings us to the second misconception: the assumption that we (though who “we” are is left unspecified) currently pursue policies that seek to maximize economic growth. In this way, degrowthers blame all the myriad problems, including (perceived or real) stagnant living standards, inequality, and political polarization, not on a lack of economic growth but on the pursuit of growth.

Even commentators and journalists critical of degrowth often buy this premise; they too assume a “they” who chooses policies that maximize growth and wonder whether adding other goals alongside growth might make sense. In truth, however, there is no “we” or “they” in control of the economy. To think that that is the case is to mistake the spontaneous order of the marketplace for a machine or engine that is driven or directed by policymakers. Of course, politicians mention growth as an important outcome, but in reality they are seeking reelection. That means politicians are incentivized to pursue policies that they think will appeal to the median voter. While politicians can’t ignore the economy, the idea that they are dead set on “maximizing” growth to the detriment of other objectives cannot be seriously maintained.

Third, just as degrowthers misinterpret current policies as those intended to “maximize economic growth,” they also seriously misrepresent the history of economic growth. Hickel’s work provides the historical underpinning of the degrowth ideology. Chapter 3 of his 2018 book, The Divide, is entitled “Where did Poverty Come From?” In it, he asserts that traditional accounts of the Industrial Revolution are false. He argues that the modern world’s wealth stems not from innovation but from conquest and the establishment of an extractive world system based on colonialism and capitalism. It was this exploitation and appropriation that supposedly kickstarted the rise of the West. Indeed, according to Hickel, capitalism created “mass poverty as a historical phenomenon”. In 2023, Hickel and Dylan Sullivan published an attempt to validate this narrative empirically in World Development. If we take this work seriously, mainstream economists and social scientists have misled the public. If the origins of economic growth are in fact responsible for impoverishing millions, why wouldn’t we want degrowth?

That is, of course, a cartoon version of economic history that no specialist in the field takes seriously. Sullivan and Hickel’s most substantive evidence is simply that Robert Allen’s estimates of real wages and welfare ratios show significant declines after 1500, which is when they date the rise of capitalism in Europe. But economic historians have known for decades that living standards fell as populations recovered from the Black Death. That is consistent with a simple Malthusian model, and it tells us next to nothing about the relationship between markets, capitalism and economic growth.

Nor is that an isolated lapse by the proponents of degrowth. Economists have tried to formalize and test Raworth’s doughnut model, which describes a “safe and just space” between a social floor of basic needs and an ecological ceiling of planetary boundaries. Raworth suggests that more capitalist economies stray further from that space. A recent test found the opposite: economies with more economic freedom tend toward less imbalance, improving on social and ecological measures together rather than trading one off against the other.

Critics of degrowth, including economists who are sympathetic to the goals of redistribution and egalitarianism, have commented on its infeasibility. Branko Milanović, for example, notes that even though degrowthers believe in economic growth for the poorest in the global economy, their proposals would require some 86 percent of people in currently rich countries to reduce their standards of living. As Milanović rightly notes, the idea that citizens of rich countries would accept such cuts voluntarily and democratically is pure magical thinking.

That brings us to a fourth fallacy committed by the degrowth movement: the idea that degrowth can be achieved without mass coercion and violence.

The reality, of course, is that degrowth would require a massive increase in governmental organization and intervention in the economy. Parrique asks: “Should every company make a profit? Should we let the markets decide what we produce?” The implicit answer is “no,” for as Parrique continues: “degrowth is planned—meaning it is democratically discussed with society and organized in advance by public authorities and the economy’s stakeholders according to a plan.”

And so, the degrowthers return to the errors made by socialist planners in the 20th century. Degrowthers talk about broadening human capabilities, individual freedom and collective self-realization. “Let’s draw up plans for the boldest utopias without fearing the changes they will impose,” writes Parrique. But the rest of us have heard such calls for revolutionary action before. Needless to say, they have ended badly. 

Or perhaps degrowth is not meant to be taken seriously. That is, degrowth is more of a political slogan than a serious academic concept. The radical policies required to reduce the living standards of the middle classes in developed economies would be so politically infeasible that degrowth advocates tend to retreat from the bailey of actual degrowth to the motte of more generic proposals for global redistribution.

Indeed, in The Divide, Hickel ends by arguing for quite run-of-the-mill left-leaning policies such as universal basic income or replacing GDP measures with GPI (Genuine Progress Indicator). His more recent book, Less is More, is subtitled How Degrowth Will Save the World. But it similarly ends with fairly normal left-wing proposals. Understood this way, degrowth may be less radical than it seems, and is more a way of shifting the rhetorical backdrop of policy debates in favor of more redistributive and left-wing policies.

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1. World GDP per capita was $24,248 in 2024, measured at purchasing power parity (World Bank). But GDP per capita is not household income: it also counts investment, government spending, depreciation, and retained corporate earnings, and so runs several times higher than what households actually receive. A more accurate measure of average household income is the one used by Branko Milanović, who puts the global mean at $PPP 16 a day, or roughly $5,800 a year. See Branko Milanović, “Degrowth: Solving the Impasse by Magical Thinking,” Global Inequality and More, April 28, 2021. Hickel uses the GDP per capita benchmark himself: in his 2017 reply to Milanović he put world average GDP per capita at $17,600 (PPP) and called it “not dystopic.”