Economy

Explained | Can Elon Musk’s wealth really end world hunger?

World Food Programme Director David Beasley last week claimed that just a fraction of the wealth owned by billionaires like Elon Musk could save millions of people from imminent death due to hunger. File

World Food Programme Director David Beasley last week claimed that just a fraction of the wealth owned by billionaires like Elon Musk could save millions of people from imminent death due to hunger. File

The story so far: Last week, Tesla CEO Elon Musk challenged the World Food Programme (WFP) to explain how $6 billion of his wealth would “solve world hunger.” The billionaire’s tweet, in response to a fact-check of a claim made by the WFP’s director, has brought back focus on the issues of inequality and global hunger.

What is the controversy about?

WFP director David Beasley in an interview last week claimed that just a fraction of the wealth owned by billionaires like Jeff Bezos and Elon Musk could literally save millions of people from imminent death due to hunger. In particular, he claimed that $6 billion could save 42 million people from dying of hunger. This figure is said to represent around 2% of Elon Musk’s total wealth. In response to this claim, Elon Musk tweeted that he would be willing to sell his shares in his company if WFP can explain to him how his wealth would put an end to hunger in the world.

It should be noted that the wealth of various billionaires has risen significantly since the onset of the pandemic last year even as the incomes of other groups have plunged. In many developing countries, people with incomes previously just above the poverty line were pushed into poverty by the pandemic. This has increased calls for greater redistribution of wealth.

How much money will it take to end world hunger?

The $6 billion demanded of Musk would not solve the problem of global hunger permanently, but could help avert an emergency hunger crisis. It is estimated that the money could help feed 42 million people for just about a year. There are various estimates regarding the exact amount of money that it will take to end global hunger and other forms of poverty. Some researchers estimate that it would cost $330 billion to end global hunger by 2030. It should be noted that this is not the first time that people have called for wealth redistribution to tackle the world’s most urgent humanitarian crises. Activists regularly come up with statistics explaining how much food, healthcare and other basic facilities can be offered to the poor by taking a little money from the rich. Organisations such as Oxfam, for instance, regularly come up with reports shining light on increasing inequality and how higher taxes on the rich can help the poor.

Can aid money really solve the hunger problem?

The prescription to end poverty in general varies depending on the ideological affiliations of economists. Many economists view the issue of global poverty as caused by wealth inequality. In other words, they view the increasing accumulation of wealth by the rich as leaving the poor with very little money to buy even essential goods to sustain life. They thus recommend the redistribution of wealth from the rich to the poor to make life better for the poor. Others, however, argue that the economy is not a zero-sum game and that the people at the bottom of the pyramid are poor not because those at the top of the pyramid are rich. They believe that the issue of poverty simply has to do with the inability of the poor to earn a living income due to various external reasons. For example, the quality of institutions in poor countries is generally low and the poor there have very little economic freedom to make a decent living. In such a scenario, humanitarian aid can only provide temporary relief.

Critics of wealth redistribution further point out that aid allocation is often heavily influenced by politics and is thus prone to corruption. Others also note that much of the wealth that the rich possess is in the form of capital goods which require constant upkeep and investment in order to sustain modern standards of living. To the extent that aid comes from funds that would have otherwise gone into building capital, it can actually cause living standards to drop.


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Printable version | Oct 4, 2022 12:21:36 pm | https://www.thehindu.com/business/Economy/explained-can-elon-musks-wealth-really-end-world-hunger/article37417536.ece