What is Poverty?

The state has an interest in defining poverty in such a way that only a minority are classified as poor.

It was hardly surprising, after the depredations of war and the austerity of rationing, that the early post-war years should have been a period of rising expectations. This increasing optimism was fuelled by rapid growth. The huge task of social reconstruction soaked up labour like water in a sponge. Low unemployment pushed up wages and that, together with the introduction of the “welfare state”, meant that the scourge of poverty seemed to be inexorably receding. Technological advances made affordable household items that were once the province of privilege. The mass market had at last truly arrived: a veritable cornucopia disgorging its superfluity of refrigerators, TV sets and automobiles. And it was against this backdrop of rising consumption that the first green shoots of a new kind of social protest would soon emerge—from budding environmentalists to the hippies of the “flower-power” generation-fulminating against the crass materialism and extravagant excesses of the “throwaway society”.

It was in these years that a spate of books appeared which seemed to capture the mood of the time. One such was one written by the economist, J.K. Galbraith, called The Affluent Society (1958). Galbraith’s thesis was that we live in an age of unprecedented affluence yet our habits of thought are still rooted in the past. This was a past traumatised by the experience of “grim scarcity”. We need, he argued, to radically adjust our economic thinking if we are to fully capitalise on the new prospects opening up and avoid jeopardising what had hitherto been achieved.

It was just as well that Galbraith saw fit to prudently qualify his observations, restricting their scope to what he called a “comparatively small corner of the world populated by Europeans”. Yet, it must be remembered that, at the time, even among the developing countries, there was a widespread expectation that the benefits of modernisation would soon “trickle down” to everyone, heralding the end of global poverty. They had only to keep to the same trajectory of economic development that had so unerringly guided their ex-colonial masters towards the sweet pastures of capitalist paradise. Little did they know what awaited them around the corner. The 1970s’ oil crisis, mounting Third World debts and the crushing, hope-extinguishing cutbacks imposed by IMF structural adjustment programmes soon put paid to such wishful thinking.

Relative poverty
But, to be fair to Galbraith, he did not suppose that the disappearance of “grim scarcity” in the so-called First World signalled the eradication of poverty altogether. There remained a more intangible, indeed intractable, kind of poverty—the “elegant torture of the spirit which comes from contemplating another man’s more spacious possessions”. “People,” declared Galbraith, “are poverty-stricken when their income, even if it is adequate for survival, falls markedly below that of the community. Then they cannot have what the larger community regards as the minimum necessary for decency; and they cannot wholly escape, therefore, the judgement of the larger community that they are indecent.”

This is “relative poverty”. It is often contrasted to what is called “absolute poverty”—the kind of poverty where one has barely enough to survive on—but, in a sense, that can be quite misleading. Indeed, it can lend itself to the complacent conclusion we having nothing really to grumble about; at least compared to others less fortunate. Like a child, admonished for not eating all their peas, we are told to remember “the starving millions in the Third World”. So we should. Not the inference that we should be eternally grateful for living in a society that manages to put food on our plate—providing we can afford it—is, frankly, one that sticks in the gullet. For this is a society the vast majority have good reason to get rid of and, perhaps, none more so than those it lets starve in the very shadow of the food mountains it has wilfully created.

Rather than see “relative poverty” as something to be contrasted to, and separate from, “absolute poverty”, it can be better understood as encompassing the latter. As the anthropologist, Marshall Sahlins, perceptively observed:

“The world’s most primitive people have few possessions but they are not poor. Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all, it is a relation between people. Poverty is a social status. As such, it is the invention of civilization” (Stone Age Economics, 1974, p.37).

In short, poverty presupposes affluence just as affluence presupposes poverty. Each only acquires meaning in and through its relation to the other. And, paradoxically, what underpins their mutual dependence is what enables us to analytically separate one from the other: our experience of material inequality. In other words, we would not be aware that we were poor unless we had reason to believe others were better off then ourselves.

It is conventionally assumed that it is the duty of government to look after the “less fortunate”. But if poverty is essentially relative, how does one differentiate between those who supposedly warrant this support and those who do not? In other words, on what grounds are we to classify one person as “poor” and another, “affluent”? After all, a millionaire might conceivably be considered “poor” by the standards of a billionaire.

One approach might be to calculate the average income—or arithmetic mean—for society as a whole such that all who fell below it are deemed “poor” and all above it, “affluent”. By this token, given the highly skewed distribution of wealth in society today, a clear majority of the population would fall into the former category, and a small minority, the latter. However, while this pattern of distribution remained the same, any increase in overall living standards which the state may rely upon to improve the welfare of its citizens would, by definition, have no impact on the extent of poverty among them. This is because the proportion of “poor” would itself remain unaltered. For a government committed to the alleviation of poverty, this would pre-empt any possibility of success on those terms and, so, may prove politically damaging.

It could, of course, decide to significantly alter this pattern of wealth distribution. Even so, short of everyone getting exactly the same, the optimum outcome it could thereby hope to achieve—which, in statistical terms, means eliminating any “skewness” around the “mean”—would be to reduce the ratio of poor to only half the population by this reckoning.

There are, in any case, clear limits to a policy of redistribution that a government cannot ignore in a competitive environment without hindering the process of capital accumulation. In this regard, there is undoubtedly some truth in the neo-liberal critique of the welfare state: “excessive” redistribution, involving massive increases in sate welfare, would impose an unacceptably high tax burden on capitalist enterprises which would substantially reduce their profits. That, in turn, would diminish their capacity to mobilise capital for future investment and, hence, their ability to compete in an increasingly globalised market.

Redefining the poor
Clearly, then, from the state’s point of view, some other approach to the identification of poverty is needed to circumvent these difficulties. Ideally, this would allow it to conclude that the problem of poverty was, by no means, widespread. An appropriate formula could then be devised to yield just such a conclusion. By such means, a state could, if not altogether define it out of existence, at least enable this problem to “assume” manageable proportions. There are several reasons why such an approach might be officially favoured.

Firstly, the “poor” could thus be portrayed as a minority, small enough not to appear as a serious political threat and not too large as to overwhelm the state’s efforts to render them some token “assistance”. Secondly, by defining poverty in this arbitrary fashion, this draws attention away from a structural explanation of poverty, allowing it to be blamed, say, on personal “defects”. Thirdly, by effectively splitting the working population into those officially classified as “poor” and those who are not, this facilitates the state’s ideological objective of securing their support through a process of “divide and rule”.

Since Elizabethan times, poverty was equated with destitution. Initially, parishes were responsible for supporting the poor but, after the 1834 Poor Law, this task was taken over by boards of “guardians”, each comprising several parishes, which were overseen by a government commission. As David Donnison points out, paupers “had to pass a crude kind of means test-calculated in loaves of bread—and the relief they were given kept them alive at a standard which was intended to be worse then the lot of the lowest-paid labourers . . .” (The Politics of Poverty, 1982, p.10).

According to Donnison, one of the main purposes of the 1834 poor law was to “impose the labour disciplines required for an industrial economy”. Another was to mitigate the risk of social unrest. However, the “lowest-paid labourers” were themselves not given any assistance, and this effectively remained the case right until 1971 when the family income supplement was first introduced.

Then, in the early 20th century, the meaning of poverty underwent a subtle shift, in part instigated by Seebohm Rowntree’s classic surveys of poverty in York. Rowntree’s notion of poverty involved the formulation of a minimum income needed to ensure the reproduction of labour power at a level of physical efficiency increasingly demanded by industry. To that end, a simple diet sheet was prepared with help from the British Medical Association which would ensure adequate nutrition at minimum cost to the state. “Subsistence poverty” was held to be a standard of living that fell below this tolerable minimum; as such, it was distinguishable from “destitution poverty”—or what we usually mean by “absolute poverty”—which was simply concerned with physical survival.

From the standpoint of the state, the advantage of setting a fixed threshold is that it enabled it to look to a gradual rise in living standards to lift growing numbers of the poor above a condition of poverty without having to seriously address the vexed question of unequal distribution. In short, it could thus hope to progressively reap the political benefits of a society that was becoming increasingly “affluent”. However, at around about the time that The Affluent Society was first published, an increasing number of social scientists, led by Peter Townsend, began to question the validity of this approach.

Townsend and his colleagues, argued that, far from disappearing since the war, poverty had increased. They pointed out that the “poverty line” adopted by the then National Assistance Board (set up in 1948) was actually lower than even that recommended by Rowntree himself. Further, it was unrealistic to expect the poor to confirm exactly to such a stringent spending pattern paternalistically laid down by the state; what the state regarded as a “necessary expenditure” was not something that could be absolutely fixed for all time but constantly changed along with society itself. This called for a definition of poverty that was essentially relative and thus sensitive to the distribution of social wealth.

Their approach was one that had been anticipated, not only by Marx, but also, Adam Smith. In The Wealth of Nations Smith wrote that “by necessaries I understand, not only the commodities which are indispensably necessary to support life but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without“. Such a sentiment was, as we saw, echoed by Galbraith himself.

In due course, the notion of a fixed “poverty line” was abandoned and replaced by more relativistic measures of poverty. One current example is what is known as “Households Below Average Income” (HBAI) which identifies “the poor” as those living below 50 percent of average income. But, crucially, from the standpoint of the dominant ideology, this still retains the assumption that the poor constitute only a minority and, consequently, that the majority have reason to be grateful for not being included amongst their number.

But, in truth, that majority is impoverished. It is impoverished insofar as it has no other option than to sell its working abilities to those who monopolise the means of living and whose conspicuous wealth must irresistibly provide the very yardstick by which that poverty will be starkly exposed.

This may not be the poverty of material destitution. But if the measure of a human being consists in the accumulation of material possessions to which he or she may claim the, by that token, we are demeaned. And, ultimately, it is in this devaluation of our human worth—not simply in the fact of material inequality but in the meaning this society attaches to it—that we may glimpse the very essence of this poverty.


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