I've been to Mexico City fairly recently, and I guarantee that in the right places -- possibly the same place the 1986 picture was taken -- you could take something very much like that 1986 picture today (which is perhaps even more tragic today, since its not just after the major earthquake). And I've seen Mexico City pictures just like that 2011 one, barring changes in fashion, from the 1980s. And even the 1960s.
On a bigger problem with Myth 1, not only are the pictures distortion, so is the main set of economic claims supporting the myth thesis they are meant to illustrate. Gates makes claims about "per person income", but the statistic he uses and treats as if it meant that is actually GDP per capita. Because much of the value of goods produced in developing countries is captured by foreign capital holders owning the firms doing the production, and because all that value extracted from the country's economy still shows up as part of the GDP of the country it is extracted from, GDP per capita, particularly in the developed world, is often very different than income per person.
I've lived in Mexico City a couple years and visited regularly since 1997.
Things have changed drastically in the last seventeen years. Statistics show that they changed even faster between 1985 and 1997, but I didn't see that.
The middle class has been growing at an astonishing pace. Vast swathes of Azcapotzalco, Xochimilco, and even Iztapalapa that were poor and backwards are now prosperous, clean, and exciting. The fashionable neighborhoods in Coyoacán, Polanco, and the Roma have become outright opulent. The Historic Center is neat, safe, popular, and crowded at all hours with local and international botiques and restaurants.
You can clearly see the mountains Chiquihuite from downtown and El Águila from Coyoacán nearly every day now. In 1997, the mountains around the city were more like rumors behind the pollution. Last month, I actually saw Iztaccihuatl and Popocatépetl from the center of the valley. Out by the canals of Cuemanco, local wildlife biologists tell me that the water is cleaner, the population of birds is increasing again, and recovery programs for the aquatic axolotl are working.
High school graduation and college completion rates have been skyrocketing. New universities are spreading and growing across the valley. Education is especially important because Mexico City college graduates live nearly as well as American college graduates. The income gap is in the working classes without credentials.
GDP per capita is misleading, so let's consider personal income. Housing and transportation and meals cost about a quarter as much as in the USA for the middle class. That's about 80% of a typical budget. Cops and public administrators with good educations are now making US$10k to start and programmers and engineers around US$20k. The median household income in Benito Juarez county, with about 600k people and no fashionable rich areas, is approaching US$30k. The neighboring parts of Coyoacán, Miguel Hidalgo, Álvaro Obregón, and Cuauhtémoc counties are richer.
So I really endorse the Gates's impression of development success in Mexico City.
that's why is better to use Purchasing Power Parity indexes, for example Mexico is 14th in Nominal GDP with 1,183B USD, but in PPP terms it is the 11th with 1,758B USD. The country as a whole has a GDP per capita PPP of 15K USD, but Mexico City has a GDP per capita PPP of 44K USD. It's a very big country with a lot of inequality between urban and rural population.
Bill Gates is not saying that everywhere in Mexico City is like the picture on the right.
"There are still slums and pockets of poverty, but by and large when I visit there now I think, “Wow, most people who live here are middle-class. What a miracle.”"
Sadly, I don't understand what you are saying in your second paragraph. I don't see how your criticism refutes Myth 1 "Poor Countries are Doomed to Stay Poor"? Take a metric, look at it over time. Watch it change. That's exactly what Bill Gates did in his piece.
I'm not refuting that the myth is a myth (though I think its more of a strawman that Gates attacks poorly than a myth), I'm pointing out that Gates particular attempt to argue from so-called "income per person" trends (that starts with mistreating GDP per capita as "income per person") line of argument against the "myth" is fundamentally flawed.
I don't think poor countries are "doomed to stay poor". But I don't think Gates attacks on that supposed myth (which I don't think is really a particularly dominant belief) are very good, and particularly I don't think they support the alternative thesis he is presenting to the "myth" (which seems to nbe not merely that they aren't "doomed to stay poor", but that the "poor" countries are in fact not poor now.)
> Take a metric, look at it over time. Watch it change. That's exactly what Bill Gates did in his piece.
Except that the metric he takes (which he attempts to conceal by presenting it as something it is not) includes wealth extracted from the nation to other nations, as well as income earned in the nation, so it isn't actually a good measure to show whether the poor nations are actually getting less poor over time.
Taking a metric that doesn't actually measure the thing you are using it to measure is, well, wrong.
Another issue with GDP is that it increases as an artifact of marketization, independently of changes to efficiency or standard of living produced by marketization. If two people each cut their own lawn, this contributes $0 to GDP. If they swap so that each mows the other person's lawn for $5, GDP goes up! If they each hire the other person as childcare to watch their own kids while cutting the other person's lawn, GDP goes up even more! This is because GDP does not include non-paid productive work, so simply making it paid increases GDP (even if actual production goes down).
Some of these shifts might improve welfare, but GDP increases regardless of whether they do or not, just by putting dollar figures on existing activity. A government really wanting to artificially boost GDP could give it a big boost by mandating that each parent take care of a different parent's kids for N days a week instead of their own, at a government-fixed rate of pay. The payments in each direction net out, childcare probably does not improve, and GDP goes up.
I see what you're saying. However, I wouldn't attribute to malice "attempts to conceal by presenting it as something it is not" what could otherwise be explained by the difficulty in getting a different globally available metric. GDP per capita is a metric that is globally available from reputable sources.
Is there a different globally available metric from reputable sources that you would suggest?
> However, I wouldn't attribute to malice "attempts to conceal by presenting it as something it is not" what could otherwise be explained by the difficulty in getting a different globally available metric.
Using GDP per capita can be explained by its ready availability compared to better measures.
Calling it "income per person", which it very much is not (and not, in explaining what metric you are actually using, noting the very significant way in which it is not "income per person"), cannot be explained that way.
You skipped over the quote where he explicitly calls that out.
Additionally don't most measures of GDP explicitly exclude those cases where the money is immediately siphoned out of the country?
In either case it is usually true that GDP and income per person are at least linearly related, meaning the kinds of comparisons he is doing are valid, since he is comparing the numbers within a country. The scale of growth may be off by little bit, but the fact that growth occurred is still true.
On a bigger problem with Myth 1, not only are the pictures distortion, so is the main set of economic claims supporting the myth thesis they are meant to illustrate. Gates makes claims about "per person income", but the statistic he uses and treats as if it meant that is actually GDP per capita. Because much of the value of goods produced in developing countries is captured by foreign capital holders owning the firms doing the production, and because all that value extracted from the country's economy still shows up as part of the GDP of the country it is extracted from, GDP per capita, particularly in the developed world, is often very different than income per person.