This is from a post I wrote a few years ago (October 2015) and it still seems as relevant today. We’re still not making the choices necessary to attain serious poverty reduction.
He awoke from a deep slumber a couple of weeks ago to the sound of phone ringing incessantly, but when he answered he didn’t mind. Angus Deaton was being informed by someone on the other end of the phone that he was being awarded the Nobel Prize for Economic Science. Interestingly, it was how he shed new light on persistent poverty that earned him the credit. Or as the Nobel committee put it:
“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices. Angus Deaton has enhanced this understanding.”
Deaton wasn’t so much focused on large market trends as on the average household and how choices are made within it. The Nobel committee has recently honoured a number of academics who have shown through their research that markets are inefficient and that there is great difficulty in knowing what to do about it. Poverty is beginning to gain traction because of its very unfairness.
For too long now – centuries really – we have placed the blame for being of low-income squarely on the shoulders of the poor themselves. The amount of times we have heard that certain people should just get a job, or stop wasting their money on trivialities, or should go back to school stretches almost to infinity.
But to think that way is to misconstrue what is really happening. Worse, it can bring out some of the worst of subtle prejudices when we blindly believe that people are poor primarily because they are too idle or lack ambition. In reality, it is the way we organize our societies and the way institutions themselves enforce that organizing effect that leads to fewer and fewer opportunities for those in low-income situations.
A huge percentage of the non-working poor have been deemed irrelevant by a market design that increasingly seeks the advantage of productivity without heavy labour costs. People by the thousands are losing their jobs to this trend and yet it remains easier for us to blame the unemployed than it is for us to ask serious questions about the very future of work itself. If capitalism can increasingly get by without people, why, then, do we continue to lay blame on those who have been cast off? No serious researcher can lay claim to the belief that endless possibilities lie before the poor. In-depth data reminds us that people are increasingly constrained because how we construct democracy, promote capitalism, and determine the destination of wealth is, ever increasingly, limiting the opportunities for industrious people to enjoy a more prosperous life.
The secret, of course, is not to change the poor but the systems that create them. Yet it remains easier to blame a person down and out on their luck than it is to confront financial policies, political parties, elite societal structures, or crony capitalism. And, as Angus Deaton recently pointed out in his Nobel prizing winning work, when households themselves make selections that enforce the current financial structure, even average citizens can play a troubling role in enforcing poverty.
The importance of all this is that we could change these realities, but only if we show a willingness to pay for a more equitable society – all of us, including companies. That would require us to develop economic structures that don’t deliberately impoverish those the market deems disposable.
And speaking of the word “disposable,” it is the very lack of disposable income that lies at the root of poverty, not those people who lack it. It was Gandhi who made the troubling observation concerning how the colonial systems resulted in grinding poverty by claiming that, “Poverty is the worst form of violence.” Prejudice is at its worst when we not only wrongfully demean people, but when it refuses to provide them opportunity. Benign bigotry can be just as violent as a clenched fist. An opinion in the lack of evidence is nothing other than prejudice. With all that is up against the marginalized, and the economic systems that keep them in despair, useless accusations is the last thing they need. Fewer things are more frightful than ignorance that leads to inaction.