Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think (7 page)

How do you like your bath water? Ice cold or steam hot? Of course, those are not the only alternatives. You can also have your water freezing, tepid, scalding, or anything in between. Many options, along a range.

FACT QUESTION 2

Where does the majority of the world population live?

A: Low-income countries

B: Middle-income countries

C: High-income countries

The majority of people live neither in low-income countries nor in high-income countries, but in middle-income countries. This category doesn’t exist in the divided mind-set, but in reality it definitely exists. It’s where 75 percent of humanity lives, right there where the gap is supposed to be. Or, to put it another way, there is no gap.

Combining middle- and high-income countries, that makes 91 percent of humanity, most of whom have integrated into the global market and made great progress toward decent lives. This is a happy realization for humanitarians and a crucial realization for global businesses. There are 5 billion potential consumers out there, improving their lives in the middle, and wanting to consume shampoo, motorcycles, menstrual pads, and smartphones. You can easily miss them if you go around thinking they are “poor.”

So What Should “We” Call “Them” Instead? The Four Levels

I am often quite rude about the term “developing countries” in my presentations.

Afterward, people ask me, “So what should we call them instead?” But listen carefully. It’s the same misconception: we and them. What should “we” call “them” instead?

What we should do is stop dividing countries into two groups. It doesn’t make sense anymore. It doesn’t help us to understand the world in a practical way. It doesn’t help businesses find opportunities, and it doesn’t help aid money to find the poorest people.

But we need to do some kind of sorting to make sense of the world. We can’t give up our old labels and replace them with … nothing. What should we do?

One reason the old labels are so popular is that they are so simple. But they are wrong! So, to replace them, I will now suggest an equally simple but more relevant and useful way of dividing up the world. Instead of dividing the world into two groups I will divide it into four income levels, as set out in the image below.

Each figure in the chart represents 1 billion people, and the seven figures show how the current world population is spread out across four income levels, expressed in terms of dollar income per day. You can see that most people are living on the two middle levels, where people have most of their basic human needs met.

Are you excited? You should be. Because the four income levels are the first, most important part of your new fact-based framework. They are one of the simple thinking tools I promised would help you to guess better about the world. Throughout the book you will see how the levels provide a simple way to understand all kinds of things, from terrorism to sex education. So I want to try to explain what life is like on each of these four levels.

Think of the four income levels as the levels of a computer game. Everyone wants to move from Level 1 to Level 2 and upward through the levels from there. Only, it’s a very strange computer game, because Level 1 is the hardest. Let’s play.

    

LEVEL 1.
You start on Level 1 with $1 per day. Your five children have to spend hours walking barefoot with your single plastic bucket, back and forth, to fetch water from a dirty mud hole an hour’s walk away. On their way home they gather firewood, and you prepare the same gray porridge that you’ve been eating at every meal, every day, for your whole life—except during the months when the meager soil yielded no crops and you went to bed hungry. One day your youngest daughter develops a nasty cough. Smoke from the indoor fire is weakening her lungs. You can’t afford antibiotics, and one month later she is dead. This is extreme poverty. Yet you keep struggling on. If you are lucky and the yields are good, you can maybe sell some surplus crops and manage to earn more than $2 a day, which would move you to the next level. Good luck! (Roughly 1 billion people live like this today.)

    

LEVEL 2.
You’ve made it. In fact, you’ve quadrupled your income and now you earn $4 a day. Three extra dollars every day. What are you going to do with all this money? Now you can buy food that you didn’t grow yourself, and you can afford chickens, which means eggs. You save some money and buy sandals for your children, and a bike, and more plastic buckets. Now it takes you only half an hour to fetch water for the day. You buy a gas stove so your children can attend school instead of gathering wood. When there’s power they do their homework under a bulb. But the electricity is too unstable for a freezer. You save up for mattresses so you don’t have to sleep on the mud floor. Life is much better now, but still very uncertain. A single illness and you would have to sell most of your possessions to buy medicine. That would throw you back to Level 1 again. Another three dollars a day would be good, but to experience really drastic improvement you need to quadruple again. If you can land a job in the local garment industry you will be the first member of your family to bring home a salary. (Roughly 3 billion people live like this today.)

    

LEVEL 3.
Wow! You did it! You work multiple jobs, 16 hours a day, seven days a week, and manage to quadruple your income again, to $16 a day. Your savings are impressive and you install a cold-water tap. No more fetching water. With a stable electric line the kids’ homework improves and you can buy a fridge that lets you store food and serve different dishes each day. You save to buy a motorcycle, which means you can travel to a better-paying job at a factory in town. Unfortunately you crash on your way there one day and you have to use money you had saved for your children’s education to pay the medical bills. You recover, and thanks to your savings you are not thrown back a level. Two of your children start high school. If they manage to finish, they will be able to get better-paying jobs than you have ever had. To celebrate, you take the whole family on its first-ever vacation, one afternoon to the beach, just for fun. (Roughly 2 billion people live like this today.)

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