Why Poverty Won’t Go Away
If a society has a political leadership which recognises the political dangers to itself of increasing inequality as the economy grows, and therefore invests in public goods, widens its direct tax base (i.e. progressive rather than regressive indirect taxation), uses revenues for redistribution through social protection, and acknowledges that such ambitions rely upon improved and transparent governance so that rights are actually enacted, poverty can be reduced.
The core problem at present is that the ‘duty bearers’ of the society in both government and industry are also the major rent-seekers through corruption in the public sector, especially using the regulatory apparatus in discretionary ways to extract rents from those seeking avoidance from regulation. This avoidance enables industrialists to deepen the exploitation of their workers. Officials also issue contracts to their private sector friends with payback expectations. So there is an unholy alliance between the state and the type of capitalism emerging in many countries which works against the interests of its ordinary citizens.
A hungry person is a hungry person. Why do we need so many theories to understand how to alleviate poverty?
Partly of course because women and children, especially girls, are likely to be hungry before the men in their families become hungry. So, immediately, you have one set of theories around gender inequality leading to gendered and intergenerational poverty within households as a function of both patriarchal society and labour markets which privilege adult male earners over female ones.
Poverty is multidimensional and not just about food security. People need to be healthy and they need to be secure over time. If the investment in public goods such as public health and water and sanitation is low, or below quality due to corruption, then the poor are even more exposed and dependent upon bad deals, to achieve short term assistance. These bad deals reinforce relations of dependent security and thus postpone a rights-based, more autonomous security. I have called this the Faustian Bargain.
These are all examples of ‘theory’ statements based upon evidence, which answer questions about how poverty and unequal access to essential services is reproduced and why. And there are other theories too: about how access is limited; about under what conditions people morally care for others rather than treat them instrumentally for their own purposes; about whether people can act for themselves (actor-oriented perspectives) or whether they are constrained by relationships and institutions; about whether people have the ‘freedom to’ act for themselves or only the ‘freedom from’ being subordinated by others (the subaltern argument); about whether they can trust each other enough to act collectively to manage their own lives as well as protest against commonly perceived enemies or threats. To understand how poverty and inequality is reproduced, we need to understand all these things and more.
Does poverty persist because we want it to?
It is true that many people like some inequality and thus the poverty which accompanies it. Inequality offers rank and status, and some economists would argue that rank and status relative to others is a driver of creativity, innovation, risk taking which all societies need to move forward and grow. The aphorism ‘The Poor will always be with us’ is a convenient way of saying that the poor are responsible for their own condition through laziness and lack of application, a kind of ‘culture of poverty’ argument which attributes poverty to the wilful behaviour of those experiencing it, to the point where no one else is responsible for their plight but themselves.This way of thinking becomes an alibi for those in power to do nothing.
Is it possible to combat poverty without addressing corruption and man-made disasters like wars?
The two issues (corruption and war) have to be disentangled, and anyway the man-made disaster which affects poverty most will be climate change.
There are some who argue that historically and globally, economic growth occurs alongside corruption, and if growth delivers poverty reduction, therefore corruption and poverty reduction are compatible. I do not share this view, because unfortunately growth does not automatically lead to poverty reduction. Corruption is another word for rent-seeking in a poorly governed society where no one, therefore, can enjoy secure rights. The poor suffer the effects of uncertainty and insecurity more acutely than any other classes.
With reference to war, we should remember that conflict is sometimes unavoidable. It would be satisfying to imagine a world of peace and harmony, and thus release resources for social protection and so on. But preferences for inequality and prejudicial discrimination based upon images of the undeserving poor, or ethnicity, or race, or gender etc. appear to remain a feature of the human condition. So some wars (international or civil) have to be fought to combat poverty.
I raised the issue of climate change as a more significant man-made disaster in terms of poverty. Bangladesh is in the frontline of this evolving man-made disaster, which will likely entail a large scale movement of the human population as habitats and residential locations become untenable under well predicted effects of global warming. These ‘climate refugees’ will lose their livelihoods. Does Bangladesh, or indeed the world community, have the values and institutions to cope with this prospect?
This reminds us that poverty eradication is not a linear process towards zero. Under hazard, i.e. predictable conditions, it may go in reverse. Constant vigilance and institutional, not just technological, innovation is required.
As long as countries keep on spending a big portion of their national budgets on many non-productive sectors, how can we expect people’s conditions to improve?
Are we talking about defence budgets or welfare budgets? Many neo-liberals, especially in my own country, the UK, regard welfare budgets as ‘non-productive’. If military budgets contribute to positive order and aid ordinary people to combat aggressors who might make their lives worse off economically, socially, politically and culturally, then some defence capacity (and capability) is required. So military budgets are not always a negative trade-off. But if those budgets are being used for internal repression and to keep certain rent-seeking elites in power, including the arms industry around the world, then no doubt they are part of the problem.
Welfare budgets perform functions which can be considered productive: employment insurance, for example, enables the rhythm of capitalism to continue its inherent process of destroying jobs, dislocating labour, alongside the creation of new opportunities employing different people with new skills, sometimes in new locations. They also subsidise private capital by underwriting living wage/family reproduction costs—tax credits in the UK, for example. So hardly non-productive in the sense of supporting capitalism!
This story was originally published by The Daily Star, Bangladesh