Poverty

Poverty is disempowerment. I heard this, or something very close, a couple of months ago on the radio and thought it was a good, very succinct, definition.* It is reminiscent of Amartya Sen, Robert Chambers and others and, most importantly, gets away from the notion that poverty is simply a lack of money.

For the development economist, however, a problem is that power is difficult to measure, while money income is at least in principle easy to measure. The United Nations Development Program has come up with a lot of alternative measures, such as the Human Development Index, the Gender Development Index, the Gender Empowerment Index (how many women are in parliament, etc), the Human Poverty Index and so on. Each of these tackles poverty from a different angle without being able to provide a composite picture. Even the Gender Empowerment Index cannot tell much because it only gives the ratio of the average female to the average male. What if the average male is seriously powerless?

In classical political economy poverty was considered in relation to a minimum physical subsistence level. Both Malthus and Ricardo agreed that the standard of living of wage earners would be constantly driven down to the physical minimum by the combined pressures of population growth and scarce resources. Marx, on the other hand, had a more optimistic view that productivity could grow fast enough to enable working class living standards to rise over time - provided that workers could bargain an improvement through class struggle. Marx's version of the classical theory therefore leaves us with a view of poverty as at or below a 'socially acceptable minimum.' In a rich society, a poor person could be much more alive and kicking than a person in a similar situation in a much poorer society. If, for example, we take the poorest 10% of the population in Indonesia and Australia - on whichever measure (income, expenditure, educational attainment, health outcomes) - it is doubtful that the Indonesian group would agree that their Australian counterparts deserved the term 'poor'. Yet, in relation to other Australians they would surely be poor.

On the other hand, many people have observed the phenomenon of the 'smiling poor'. People can, it seems, be poor but happy. They might define poverty in relation to something other than their material circumstances. If they feel accepted and empowered by their community they are less likely to feel impoverished than if they feel rejected, neglected or otherwise unvalued.

If we were to define poverty as disempowerment rather than as an absence of material goods or money, or even of less tangible benefits such as education and health, I think we would be able to resolve some of these difficulties. A disempowerment definition would say, for example, that a person is poor if she is unable to exercise control over her access to a certain bundle of resources. The character of the bundle might vary from one society to another, but the key element of a definition of poverty is not so much the size or quality of the bundle itself (such bundles have different meanings and economic values for different people), but the power of individuals to access and to use it. Access that is contingent upon the agreement of another confers less control than independent access.

This view of poverty is very different from what you get in mainstream economics where the solution to poverty is usually seen in terms of increasing the size of the bundle available to a given individual and then encouraging that individual to make 'development-oriented choices'. If, for example, we increase a poor person's cash holdings, we'd hope they would invest in further income-generating activities rather than on buying an iPod. The person who chooses the iPod is supposed to have a high rate of discounting the future. Ultimately, then, development (or poverty) boils down to a series of individual choices based on given individual discount rates.

What if, instead, the increase in cash holding gave the person a choice between eating or starving. If she 'chose' to eat, would we then say she had a high rate of discounting the future? Actually a sensible person would say that there was simply no choice. Suppose now that the iPod purchaser was faced with a similar lack of choice, simply because she knew that no amount of investment would enable her to escape the poverty of her existence. There are plenty of real world reasons why this might happen - more powerful individuals could prevent her from conducting a business, for example. In some social contexts, the investment "choice" desired by the development economist could leave an individual worse off than before and the consumption "choice" would leave her better off. Choice them becomes a rather meaningless concept - apples versus oranges rather than poverty versus affluence.

There's a lot more to say about this problem, but this post is already long enough.

* Possibly it was in an interview with Jared Diamond who was otherwise talking twaddle.

Burma v China - the case of disaster response

It is quite interesting to consider the differences between these two countries (or rather their regimes) as highlighted by the recent catastrophes. In the normal course of events, minus cyclones and earthquakes, they tend to get lumped together as regimes that abuse human rights. One could argue, however, that when disaster happens Burma has more in common with the United States than it does with China. I'm thinking, of course, about Katrina and the response that was so delayed - not to mention the failure to invest in the maintenance of levees that could have averted most of the worst effects - as well as the bland refusal of either government to really recognize the extent of human loss at the time. By contrast, the Chinese had at least 50,000 troops in the disaster area by the next day and the scale of the rescue effort increased from there.

The criminality of the Burmese regime is accentuated by the fact that the cyclone wasn't even a Category 5. It was a 4 when it initially hit the Irrawaddy delta coast and it was a 2 by the time it reached Rangoon. Yet it killed about 100,000 people. I was in Vietnam a couple of years ago when they had the worst typhoon in a decade. It was a 4 or 5. The Army rushed to the affected areas to build defences and evacuate people before it hit. A handful of people died. Nobody was left to fend for themselves in the aftermath.

Even if you think the Vietnamese Communists have a bad record on human rights, you can hardly fault them for valuing the lives of ordinary people when disaster strikes. The Vietnamese armed forces do not exist primarily for regime maintenance, as in Burma, but for national defence. I think the situation in China is similar to that in Vietnam. Although the latter has never had anything resembling the Tien An Men violence of 1989, there is a similarity in that the armed forces do not threaten ordinary people, while they do step in to provide support in times of real danger. Moreover, despite its brutal repression in 1989, the Chinese regime did respond. In the aftermath of the protests a number of policy changes were put into place that effectively tackled the causes of discontent.

Let them eat cake!
In Burma, by contrast, the armed forces are a constant threat and they show no sign of recognizing any problem. While various aid agencies estimate that a million people have so far received no aid at all, the regime insists that the emergency is over and reconstruction has begun. In a statement reminiscent of Marie Antoinette, a Burmese leader was quoted today saying that people in the Irrawaddy delta did not need supplies because they could eat frogs.