⚡War
Hope everyone had a great weekend! If you missed last Friday’s, you can find it here.
It’s International Anti-Corruption Day. Every year, $1 trillion is paid in bribes while an estimated $2.6 trillion are stolen annually through corruption — this is 5 percent of the global GDP. Check out the United Against Corruption campaign to learn about what you can do.
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How Poverty Ends
Esther Duflo, Abhijit Banerjee, and Michael Kremer were recently awarded the Nobel Prize for their groundbreaking research on using randomized-controlled trials to address poverty, as we covered recently. Duflo and Banerjee released another essay last week — How Poverty Ends — to address the evolving role of economic growth in reducing poverty. This is going to start with a little bit of economic theory, but we highly recommend driving through to the end to understand their point!
Understanding today’s poverty rates. People have been climbing out of poverty at the fastest rate in human history. We still have a significant inequality problem today in rich countries, but overall, the last few decades have been pretty good for the world’s poorest: the average income of the bottom 50 percent of earners nearly doubled since 1980, and the number of those living under the World Bank’s threshold for “extreme poverty” has halved since 1990
Why? Duflo and Banerjee chalk it up to economic growth. Expanding GDPs have allowed governments, like India and China, to spend more on schools, hospitals, medicines, and more. While there still isn’t a clear idea of what drives economic growth, Duflo and Banerjee believe that the “the fastest growth appears to come from reallocating poorly allocated resources — that is, putting capital and labor toward their most productive use.”
This reallocation of resources is critical. In traditional growth theory, many believe that resources flow to their best use automatically — “the best workers should end up at the most profitable companies” or “investors should entrust their capital to the most promising entrepreneurs.” Duflo and Banerjee find this assumption to be false. This is especially true in developing countries, where sufficient resources are available but the markets that allocate them function poorly. Correcting this misallocation of resources is critical and has been the biggest factor driving China and India’s explosive growth.
This cannot work forever. Growth for both India and China has been slowing, and India is in fact at risk for getting stuck in the “middle-income trap” — this is where an economy gets stuck in the middle because it is neither competitive with developing economies or developing economies (e.g., Mexico). Growth simply cannot be sustained forever.
What can an economy do? In the US and UK, both Reagan and Thatcher implemented “anti-poor, pro-rich policies” to try to jumpstart growth. This included tax cuts for the rich and bailouts for corporation. This has (obviously) not worked — growth hardly picked up, but inequality skyrocketed. We mentioned earlier than the poorest 50 percent has done pretty well, but the top one percent has done even better.
We must shift the focus to quality of life. Duflo and Banerjee argue that countries need to understand that GDP growth is a “means to an end, not an end in itself.” The ultimate goal should be improved quality of life — better health, access to education, dignity, and more. Yes, it can be one way for the world’s poorest to be better off — but it’s not the only way and it often isn’t the best way. Governments need to focus on raising living standards and need to start measuring their success against a broader quality of life index, rather than just GDP.
We love this piece. We have seen a number of articles over the past few months about how policymakers are calling for a shift away from GDP as the sole metric against which an economy’s success is measured, and we are hopeful that this data-driven and empirically-backed essay can drive some action here. Driving this fundamental transformation in the way we think about growth will take some time, but we firmly believe that this is the best path forward.
War: Fake vs Real Meat
The meat industry has expressed a warning: Beware of plant-based meat.
New ads. In the recent weeks, full-page ads have appeared raising health concerns around plant-based meat substitutes. The ads call them out for being “ultra-processed imitations” and the campaigns ask “What’s hiding in your plant-based meat?” These ads have been pushed by the Center for Consumer freedom, a PR firm whose financial supporters have included meat producers.
The response. Impossible Foods said the campaign was misleading and fear-mongering. But, they actually celebrated (a little):
“It’s a point of pride to have that organization come after us,” said Pat Brown, the company’s chief executive. “It’s hard to imagine a stronger endorsement.”
They believe the new “disinformation” campaign is a sign that their mission to disrupt the meat industry is working.
Meat-eaters are loving it. NPD Group, a market research firm, says that 90% of the customers purchasing plant-based burgers are meat-eaters who believe the products are more healthful and better for the environment.
“The two big brands, Beyond and Impossible, have replicated the burger experience without having to sacrifice the taste of the burger… So now a lot of consumers feel like they have a healthier option, they are reducing the amount of meat they consume, and they just feel better about that.” Darren Seifer, an analyst at NPD.
Is it better for you though? Dr. Frank Hu, chairman of the nutrition department at the Harvard T.H. Chan School of Public Health, believes it depends on how you eat them. It’s supposed to be a burger after all. Dr. Hu said studies comparing the metabolic effects of eating beef vs plant burgers are currently being running.
It’s just plants. In response to the haters, Beyond Burger and Impossible Foods claim the building blocks of their food are plants. Beyond Burger has about 18 ingredients and the company says it uses no genetically modified or artificially produced ingredients.
People want it. Burger King said it had its most successful quarter in four years this fall because of its plant-based Impossible Whopper. Dunkin’ Donuts announced it was rolling out a breakfast sandwich with Beyond Meat sausages in 9,000 stores after it’s success in NYC. Many grocers and restaurants are beginning to carry these products as well.
Other battles. Meat producers are challenging plant-based.
A group of scientists challenged the warnings that linked red meat to heart disease and cancer. However, this study’s lead author had past research ties to an industry group whose members include fast food companies and a beef processor.
At least 25 states have introduced bills making it illegal to use the words “beef” or “meat’ on products made from plant ingredients or cultured meat that is grown in a lab. Missouri even passed it last year.
Representative Roger Marshall, a Republican from Kansas and the top recipient of livestock industry donations in the House, introduced a bill that would require companies to use the word imitation” on their plant-based meat products.
The fact that the meat industry is challenging plant-based meat is a positive sign for the plant-based industry. It shows that traditional meat sees the new players to be an actual threat.
Short takes
Throw away your portable battery packs (sustainably!) — you’ll soon be able to charge your phone using your t-shirt.
Investing in green buildings delivers better financial returns alongside environmental and well-being benefits.
Apple just bought the first-ever batch of carbon-free aluminum.
The Kakatiya Sandbox program in Nizamabad, India supports microentrepreneurship and skill development for community members.
Climate change is starving the oceans of oxygen.
Tomorrow Today
🎟️ Date and time for the next one to be announced soon!
We’re thinking February.
Change cannot be achieved alone, only together. In that spirit, we are hosting community events at our space in New York City. Eat some food, learn from some seasoned, unconventional activists, and meet others aspiring to change the world!
Why are we hosting this?
For us, community is the center of everything. In an age of prolific digitization, there's a great need for greater human connection. It's almost necessary to carve out time and space to purposefully engage in person. While it's amazing to be able to discuss and interact with multiple people online and exchange stories and insights, we don't think anything beats the experience of sharing a meal.
Igniting Tomorrow
💰 $100k-$250k Pre-Seed Funding
UPDATE: We’ve already had multiple people reach out and share their ideas. It gets us super excited to learn more about the projects and companies everyone is working on. Please keep reaching out. We’ll be releasing more information around this in the upcoming year.
Many of you are either already working on a number of world-changing things or have ideas bursting out of you every day. Our goal is to see unconventional activists like you succeed. Let us help connect you into the space and access the financing you need to get started. If you’d like to share your ideas (or know a friend working on something exciting), please reply to this email!
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