Poverty is not down to chance or bad choices. It’s hard wired into a deeply unequal economic system. But it doesn’t have to be that way, says Dinyar Godrej.
Growing up in India I heard my parents speak of the ‘deserving poor’. For my mother it was usually in relation to beggars in the street. People fending for themselves with visible disabilities or frail elderly people looking lost to the world would have her rummaging in her handbag. Young people inevitably got short shrift and were admonished, told to ‘go out and work’.
For my father, who administered a small family fund that dispensed charity to applicants who had come to hear of it, the term applied to the perceived character of the person involved. Single mothers who impressed him with their honesty and hopes for their children were helped, men who looked like they might squander the cash on drink were not.
I found it difficult to make such distinctions. From those who were clearly destitute to those who laboured without rest and yet looked threadbare and undernourished, they all shamed me, but especially children my own age. It was fundamentally unfair that anyone should have their choices so reduced.
But in my home town such poverty was everywhere, unavoidable. Today, populous India, despite impressive economic growth, still has the largest number of people living in poverty of any country in the world.
Recently I have become more aware of another meaning of the term ‘deserving poor’ – this time not condescending but contemptuous. It’s in the context of austerity Britain, where social security payments are now at the lowest levels, after accounting for inflation, since the welfare state came into being, where 2,000 new food banks have been established in the last decade and 14 million people (21 per cent of the population) are living in poverty, with 1.5 million reported as destitute. The ragged homeless congregations in every city are the visible end, the children turning up at school hungry are more hidden.
Britain’s rabid tabloid press has relentlessly pushed the perception of these people as somehow feckless and deserving of their poverty. This impression is bolstered by the rightwing government’s constant false opposition of ‘scroungers versus strivers’, which has cast the most vulnerable as burdens on society, undeserving of the services they should be guaranteed.
This violence has turned physical, with numerous attacks on homeless people by random strangers. For many, it would seem, the pernicious discourse of ‘not enough to go around’ in one of the wealthiest nations of the world has erased empathy. Such erasure is normally the preserve of the rich; studies have shown that as people climb the ladder of wealth, compassion takes a dive.
Perhaps in our competitive late capitalist societies it’s easier to be angry at poor people rather than at poverty itself. After all, it seems so intractable. Even non-believers will often wearily repeat the widely misused biblical fragment ‘the poor you will always have with you’ (actually an indictment of the rich and a call to generosity) as proof that little can or will change.
But what is poverty? Most people instinctively grasp that it is about the lack of essentials needed to maintain a dignified human life. For some this means food. Others look wider to the surroundings a person lives in, the public services they can rely on, their voice and agency in society. In wealthy nations, relative poverty is significant – being unable to live at the standard others take for granted.
For example, Child Poverty Action Group in the UK states: ‘A child can have three meals a day, warm clothes and go to school, but still be poor because her parents don’t have enough money to ensure she can live in a warm home, have access to a computer to do her homework, or go on the same school trips as her classmates.’
A reasonable shorthand for the basics required comes from the 1948 Universal Declaration of Human Rights: ‘Everyone has the right to a standard of living adequate for the health and wellbeing of himself [sic] and his family, including food, clothing, housing and medical care.’
Drawing the line
Attempting to quantify and measure poverty can set the cat among the pigeons. Trying to account for multidimensional poverty for all nations of the world is a herculean task, and our most august international institutions have instead mainly focused on measuring income and hunger.
But so much depends on who is doing the measuring and with what intent. The most-cited data on poverty comes from the World Bank, an organization whose website has the look of a development charity and which has as its stated aim that it is ‘committed to fighting poverty in all its dimensions’. It is also an organization dominated by the rich Western nations, whose president is ‘traditionally’ a US citizen.
And, through its loans, the bank has historically been the instrument (along with the International Monetary Fund) of imposing the structural adjustment programmes that have further impoverished so many Majority World countries (see ‘A brief history of impoverishment’).
The bank conveys a reassuring ‘on track’ message that extreme poverty is well on its way to being sorted by 2030. It measures this extreme poverty by means of an international ‘poverty line’ currently set at a person earning $1.90 (measured in terms of purchasing power rather than actual exchange rates) a day. By 2030, it predicts, a mere three per cent of the world’s population will be in this condition ‘since a small amount of frictional poverty is likely to persist’.
By harping on about ‘extreme poverty’ it lags behind the United Nations’ Sustainable Development Goals (SDGs) target of ending poverty in all its forms by that year. The SDGs replaced the Millennium Development Goals (MDGs) which promised to tackle extreme poverty and hunger by 2015.
In order to claim success on the MDGs target all kinds of jiggery-pokery went on. A poverty line was used based on the national poverty lines of the poorest 15 countries, immediately setting the bar as low as possible. The language of the goal itself changed from reducing absolute numbers of people to proportions. This meant that even if actual numbers of poor people grew, a higher rate of population growth could still actually reduce the proportion they formed of the total population.
Progress on reducing hunger wasn’t working out either, so the Food and Agriculture Organization came to the rescue by adjusting the hunger threshold downwards. As it is, the hungry were already only being counted on the basis of a calorie intake inadequate to cover the needs of a sedentary lifestyle over the course of an entire year. This conveniently omitted the vast populations of people who endure seasonal hunger, to say nothing of the fact that the world’s poorest are also least likely to have sedentary lifestyles.
By the time of the SDGs and the $1.90 international poverty line, the World Bank’s methodology was increasingly under attack: from technical questions over inflation rates and rural-urban price variations within countries (which it had adjusted optimistically to magic away large chunks of rural poverty) to inadequate and missing data from entire regions and its assumption that there was no poverty in high-income countries.
One may ask why the World Bank is so obsessed by extreme poverty. Is it because here the expected narrative of success becomes quantifiable? On its website it reassuringly states: ‘In 2015, 736 million people lived on less than $1.90 a day, down from 1.85 billion in 1990.’ But the $1.90 poverty line itself has been described as ‘arbitrary and meaningless’, not enough to even provide nutrition to support ‘minimal’ human activity, let alone clothing or any of the other necessities of life.
Even at this level, for sub-Saharan Africa the World Bank admits extreme poverty is increasing. The World Bank does also say the $1.90 line is not suited for any but the world’s poorest countries, yet it remains the international poverty line. Move the poverty line a few dollars up to actually cover the basics needed to ensure a normal life and nearly 55 per cent of humankind falls below it (see ‘We can’t grow our way out of poverty’).
This is so far from the dominant narrative of the current world economic system working for all and millions being ‘lifted’ out of poverty, that the head spins. And yet, at gut level, this progress and prosperity narrative always smelled off.
Needless to say, it is loved by those who benefit the most from the status quo: the uber-rich who would like us to believe that soaring inequality doesn’t matter because, hey, the tide of growth is lifting all boats. Rather than focus our attention on how they are capturing the lion’s share of wealth to the detriment of the rest, they would have us believe that the market that they play so well is delivering for all.
This is a necessary diversion from the fact that extreme accumulation of wealth (which buys colossal power and influence) actually creates poverty by its sheer extractive nature. It’s interesting therefore to see the approaches to tackling poverty that find favour with the billionaires of Davos.
Last year’s Nobel prize for economics went to Abhijit Banerjee and Esther Duflo, whose work centres around finding testable ways to tackle specific problems of poverty. Dubbed the randomistas by their critics, the duo have shot to fame by carrying out randomized control trials (RCTs) that measure the impact of small interventions – such as, will poor people be more inclined to use mosquito nets if they get them for free rather than having to pay a small sum?
‘It is possible to make very significant progress against the biggest problem in the world,’ they write in their book Poor Economics, ‘through the accumulation of a set of small steps, each well thought out, carefully tested, and judicially implemented.’
The seductiveness of this proposition is obvious and the development field has sprouted a thicket of RCTs. But this approach has two main weaknesses: one, it focuses on narrow questions which Banerjee and Duflo insist can create a scientific basis to inform policymaking; and two, it individualizes people’s poverty at the expense of demanding wider structural changes, suggesting that they can escape it – if they make the right choices.
An even stronger version of such individualization comes from social entrepreneur Martin Burt, who has developed a model in Paraguay called the Poverty Stoplight which aims to help poor people map out the areas in which they are falling short. ‘The most important consequence of the Poverty Stoplight,’ he writes, ‘is that, by allowing the poor to self-diagnose and measure their level of poverty, they are empowered to own their poverty, and do something about it.’6 Music to any philanthrocapitalist billionaire’s ears.
While it is important not to deny the agency of poor people – indeed, it is often the only resource they can rely on – this focus on individual transformations rather than on social justice and structural change is convenient. It makes poverty manageable, offering the tantalizing promise that it can be altered without affecting the status quo.
However, where non-Western nations have booked success against poverty it has been by doing the opposite of what the global market consensus demands. China and some East Asian nations did it by following a protectionist path with stronger state regulation of industry. For a while Latin America’s pink tide governments were able to do it through welfare provision rather than leaving things to the market.
The benevolent view of capitalism is that enlightened self-interest and the logic of the market create wealth for all. Unfortunately, that isn’t how things have turned out: inequalities of wealth that lead to excesses of accumulation and deprivation are the curse of our age.
Inequality between rich and poor countries has grown in the main and the gulf between the richest individuals and the poorest is spiralling out of all control. Any advances by ‘emerging economies’ in the Global South have been made despite the vast impediments blocking poorer nations from getting richer – these include the draining of their wealth and resources through illicit means including tax havens (see ‘Who’s the thief?’), unfair trading rules and underpaid labour. This new form of imperialism has resulted in the tripling of the income gap between North and South since the end of colonialism.
Increasingly, since the 1980s and the entrenchment of the extreme market vision of neoliberalism, this loot is being captured by a small segment of individuals. For a while now, we have known that the world’s richest one per cent have more wealth than the rest. This year Oxfam’s economic inequality report (published every January to coincide with the World Economic Forum in Davos) gave an indication of just how much more.
The one per cent own twice as much as 89 per cent of the world’s population. If this hoard of wealth is staggering, the rate at which it is being extracted is yet more so: last year the world’s richest 500 people increased their wealth by fully 25 per cent (or $1.2 trillion) on the year before. Could anyone in their right mind call these people the ‘deserving rich’?
It is supposed not to matter because growth will rescue us all. Yet we have had phenomenal growth in recent decades, which is breaking ecological limits, without much by way of pay-off for the swelling ranks of poor people. Indeed, under the ratios of the current unequal growth paradigm, the global average income would need to be $1.3 million per year for the world’s poorest to be able to earn a mere $5 a day.3 It looks like we cannot leave convergence to the market.
Today there is no material reason for poverty to exist: with our sophisticated means of production there is more than enough for everyone. But we do need a system change in favour of greater equity – and that requires the redistribution of wealth.
There are many pathways open to us. Clamping down on tax evasion and introducing higher taxes for the super-rich with the funds deployed in favour of the poorest would make an immediate, significant difference. Some of the poorest people work the hardest with little to show for their labour – if their struggles for a living wage could be backed by international regulation (see ‘For a few cents more’) equality would come one step closer.
Working for robust public service provision which can be accessed by all would provide better outcomes – Costa Rica and Cuba have better health and life expectancy than the US, the wealthiest nation in the world. (Cuba has managed to achieve this with the foot of this wealthiest nation on its neck.)
Giving direct cash payments to the poorest has been known to help – and has been tried in Mexico, Bolivia and Brazil. The realization of a universal basic income – if it did not come at the expense of public services – could go even further, allowing people greater freedom over their life choices.
The struggle for greater equality would require a shift in perspective from the wretched notion of social mobility – the weak slugging it out in the hope of making it instead of fighting the forces that exploit them – to the transformative one of social justice.
This demands an oppositional politics every bit as urgent as the mobilizations against the climate crisis. I do not mean that we should stop supporting specific initiatives that aim to improve the lives of poor people, but we have to realize that these will be little better than drops of water sprinkled on a sizzling plate if we do not also take on the larger fight. Only then could we hope to eliminate, as Martin Luther King once put it, ‘the gulf between superfluous wealth and abject poverty’.