24 May 2005

Justice and Poverty - a Closer Look

For those of you who don't know, I am from a wealthy country (UK) but married to someone from a poor country (Peru). As I have an interest in human geography and how humans interact with each other and their environment, I have thought long and hard about why some countries are rich and others are poor. There are many obvious factors that could be relevant such as the abundance of natural resources or a favourable climate, but so often the relative wealth of a country appears to be totally unrelated to these factors. Why is Sweden with its very harsh winters a rich country, whereas Peru, with vast mineral and agricultural resources and a generally favourable climate across much of the country, poor?

To find answers to these questions we have to dig a little deeper. But first, we have to identify what poverty really is.

Psychological poverty

My first observation is that some people 'feel' poor whereas others don't. This often has little relationship with how much money someone has, but is more to do with whether they constantly see others who appear to be better off than them.

Material Poverty

Some people have all that they need to survive on this planet, whereas others don't - or at least we could say that the ease with which someone can acquire these necessities varies a lot, as do the necessities themselves.

Financial Poverty

Often, people are quoted as being poor because they live on 'less than a dollar a day'. This of course is a problem if the basic necessities of life cost more than this, but that may not always be the case. This is a dramatic oversimplification of what poverty is, and often serves to obscure the real issues.

Social Poverty

Some people live in rich countries and have a lot of money, but for a variety of reasons are unable to be part of a circle of friends. Families also provide a similar social network for many people. Those who are very much alone in the world could be considered to be 'socially poor'.

I was fortunate enough to be able to spend time with a family in the coastal jungle of Ecuador a few years ago. This family had very little in the way of financial resources, but as they lived largely outside the monetary system this was mostly irrelevant. In fact they grew or raised nearly everything they needed, and didn't seem to be unhappy or suffering. This experience probably above all others has forced me to reevaluate my understanding of poverty. It is not simply lacking finances - although often a lack of finances is one of the more obvious consequences of poverty. So for sake of argument lets say that Poverty is where many of the above factors (and possibly others I haven't listed) are present to a significant degree, and that it is a kind of sliding scale where you can draw arbitrary lines below which someone is defined as 'poor'. I won't get into discussion here of exactly how these multiple factors get added into the mix.

Now we have a working understanding of what poverty is, we can ask "why do some people become poor"? I think this boils down to one thing: They don't have the power to reach their full potential. This can be for a number of reasons.


In many of the poorer countries there is endemic corruption. At one end of the scale this can be politicians embezzling public funds (or sometimes fleeing the country with the funds), and at the other end local officials demanding bribes, for example to avoid an official fine for a purported minor traffic offence. Corruption generally exists at all levels of society in poor countries. It is very hard to remove because those who benefit from it are generally the ones who have the power to deal with it, but not the will.

Economic clout of wealthy nations

It cannot be denied that the nations of North America and Europe (among others) benefit greatly by have cheap sources of primary goods in the third world. However this is not by pure coincidence. Problems of third world debt could be removed at a stroke if wealthy nation governments wanted too. However that would have the effect of giving more economic power to the poorer nations - they could demand higher prices for the goods they provide, and the balance of economic power would tip a little more in their favour.

Economic clout of large multinationals

Here in Britain there is a standing joke - "Why is there only one monopolies and mergers commision?". For those of you from elsewhere in the world, the monopolies and mergers commission exists to prevent overly powerful companies from merging and forming de facto monopolies in their field. By and large this works well, although it is not a total solution to the problems of monopoly. But in many parts of the world, multinationals have no constraints and can buy local companies, form partnerships and impose terms and conditions on their customers or suppliers which lead them to have a de facto monopoly. Companies such as Nestle, Coca Cola and Telefonica have monopolies in supplying their respective products across much of Latin America, for example. This has often come about by taking over their competitors without any constraints to prevent this from happening.

Lack of economic flexibility
This is something I have thought about in detail but struggle to describe succinctly. One aspect of this is flexibility of labour, both from the point of view of employers (who may want to recruit or lay off large numbers to cater for changes in their markets) and employees, who may wish to work longer hours in order to pay, for example, for a new house. If there is only one type of work contract available which is a 38 hour week Monday to Friday, then no-one is able to work extra hours to earn more. On the other hand if there is a high availability of well-paid, flexible work then people can easily accommodate short term financial needs by working extra hours.
Another aspect of this is 'flexibility of spending'. For example if there is only one type of house available in a city at a more or less fixed price, you are unable to save money by moving somewhere cheaper. Likewise a lack of choice can constrain our other spending habits. But if we are able to move somewhere cheaper and buy cheaper food of a lower quality, again we have the flexibility to accommodate short term financial needs.
Both of these types of flexibility are built in to the way society works to varying degrees, and a more flexible society is less likely to have people really suffering because they are unable to pay their bills - it offers them more options that can help them in their needs.

What are not causes of poverty

This is my most controversial statement here - Natural disasters do not cause poverty. Now before you accuse me of being insensitive, I am not denying that much suffering results from natural disasters such as the recent Tsunami in Asia, or from many earthquakes that have destroyed entire cities. But have a think about where these disasters don't happen. California and Japan, for example are in very earthquake-prone areas of the world. But because they are wealthy areas, they are able to use technology to mitigate the effects. Buildings are all built to resist earthquakes, so what would be a natural disaster ends up causing very few major problems. If Thailand, Sri Lank and Indonesia had a suitable tsunami warning system in place, much of the suffering from the tsunami could have been avoided. the fact remains that wealthy nations are able to either mitigate the effects of, or recover rapidly from natural disasters. Where suffering does occur, public funds are usually available to deal with the issues such that poverty does not occur among those affected. This certainly cannot be said for what happens in poorer nations.

Lack of natural resources
Historically, towns and cities have grown up on rivers, near the sea, on fertile land or near mineral resources. However there are many megacities in the world which have vastly outgrown the resources that led to their creation in the first place. Through man's ingenuity these cities are able to import all they need, and still be economically strong.

To sum up, I believe the issues surrounding poverty are much more complicated than most people realise. I hope by writing this, you as my readers will be able to understand a bit more about it, and maybe will take action accordingly. you could write to your government representatives to persuade them to drop a bad policy, or maybe stop buying products from an abusive company. Even better, you could pass this knowledge and understanding onto someone else who may be motivated to act accordingly.

1 comment:

Donald Allwright said...

Please post corrections here.