For the present system to work, poor people must be excluded from the innovation, because if they could get access at an affordable price, then affluent people would find ways to buy it cheaply as well - and then the innovator would be poorly rewarded and introductions of new medicines would decline.

It seems far-fetched, even preposterous, to blame the global economic order for the persistence of severe poverty in countries that are ruled by obvious thugs and crooks.

By using general consumption PPPs, the World Bank is, in effect, saying to the poor: "Sure, you cannot buy as much food as the dollar value we attribute to your income would buy in the United States. But then you can buy much more by way of services than you could buy with this PPP equivalent in the United States." But what consolation is this? The poor do not buy services - they are services, on their luckier days.

Large multinational corporations, often acting through their industry lobbies, exert a powerful influence on the formulation of domestic rules and on their application - but their influence on supranational institutional design is even larger because it faces practically no opposition there.

The collective shortfall of the 3.08 billion people (47 percent of world population) who, in 2005, lived below $2.50 per day was $507 billion per annum, which indeed comes to about two-thirds of the present US military budget. This gives us a rough sense of how much the eradication of poverty would cost.

I think that many citizens understand how our system works, or rather, fails to work, for structural reasons. But who has the capacity and the incentives to bring change? The banks and other corporations love the system because it allows them to buy legislation that serves their own interests even at the expense of the vast majority of citizens. Incumbent politicians love the system because it allows them to raise millions of dollars toward defending their seats.

Though people could, in principle, cross national borders to reach places where their work is more highly rewarded, they are in fact prevented from doing so. As a result, huge differences also persist in the price of labor, as you can see when you get a haircut in rural India or hire a driver or babysitter in Bolivia. You can easily buy such services at one-fiftieth the price you would pay in London, Hamburg or Manhattan.