From poverty to exclusion

Spotlight on poverty

There have always been many definitions of poverty.

In 'The Development Dictionary' (1992), Majid Rahnema said that there are as many poor and perceptions of poverty as there are people. Persian has 30 words for it and most African languages have three, four or five. There are eight in the Torah and, in mediaeval times, there were 40 in Latin, not counting all the dialect, slang, familiar and vernacular terms. And the approaches to poverty are as varied as the concepts.

In 'Stone Age Economies' (1972), Marshall Sahlins, an American anthropologist and economist, claimed that poverty was an invention of civilisation. Although the primitive economy was under-productive, he said, it was not an economy of penury but a society of abundance which was able to meet essential needs.

In 'The New World Economic Disorder' (1993), Georges Corm was perhaps echoing Sahlins when he said that non-urban civilisations in Africa and Pre-Columbian America contrived to handle poverty by managing the natural resources they had available in egalitarian and highly knowledgeable ways.

In the 19th century, Karl Marx said that people in poor nations were comfortably off and people in rich nations were usually poor.

In 1978, Albert Tévoédjiré, writing in 'Poverty, Wealth of Mankind' announced that poverty could be an asset; a state of wellbeing founded on a mastery of needs He maintained that we should find out how and why a redefined and reoriented 'poverty' might represent the way of achieving 'self-development'.

Two years later, John Kenneth Galbraith set out quite a different point of view in 'The Nature of Mass Poverty' in which he outlined the concept of 'poverty balance'. Rich countries tended to increase their income, he said, and poor countries to balance their poverty, because in the latter, poverty deprived the poor of the means of overcoming their poverty. In their value judgments and economies, the rich world despised the way the poor came to terms with their poverty, he pointed out, and a decisive difference between the two was to be seen in the number of people who declined to come to terms with a poverty balance.

But, however rational it might be, coming to terms with poverty did not seem to be acceptable human behaviour and combating poverty was in fact combating the willingness to come to terms with it, something which Galbraith said could be managed by educating and traumatising people. Going beyond that, it had to be admitted that, in history, poverty was long considered to be part of the natural order of things.

Tortuous evolution of a concept

In pre-1750 Europe, there were four approaches to poverty - resignation, charity, precarious rescue and theft depending on which side of the fence the approacher stood. But in urban systems, the emergence of mercantilism heralded the demise of a comfortable conviction and poverty ceased to be ineluctable. Since the era of mercantilism, Georges Corm maintains, the fight against poverty has marked the birth of the political economy.

With the advent of the mercantile economy and the urbanisation and monetarisation of society, the poor were defined in terms of lacking what the rich had.

What did the institutions say? According to the Declaration of the International Labour Organisation in 1944, poverty anywhere was a threat to prosperity everywhere, but the institutions' real 'discovery' of poverty goes back to a World Bank report in 1948-1949. At that stage, poverty was defined by means of the statistics on per capita income in comparison with US figures and world poverty by means of comparative statistics. And the industrial countries believed that poverty would be eliminated by economic growth.

However, towards the end of the 1960s, it was realised that economic development along western lines did not in fact spell a better standard of living for the people of the Third World and the time had come for a redefinition of poverty.

In 1973, World Bank President Robert McNamara said that there had to be a drive to eliminate absolute poverty by the end of the century. The concept of global poverty was in fact tied to the gradual - and now generalised - economisation of life and the (artificial ?) integration of the traditional societies of the Third World into the world economy.

At that stage, absolute poverty was defined as living beneath a certain minimum standard. But gradually it became apparent that per capita income was no indication of the living conditions of people who were not part of a money economy and so poverty was then defined in terms of quality of life.

in the 1970s, penury was described as the result of modernised poverty and the suggested way of eliminating it was to cater for basic needs and stimulate economic growth.

Lack of what, perceived by whom ?

Poverty is described in terms of what is lacking. But who needs what ? And who is qualified to say so ? Mercifully, there are no such things as pauperologists yet.

The classic definitions are traditionally those of absolute poverty (used more in the poor countries) and relative poverty (used more in the rich countries). The first problem is to assess the value of the absolute poverty threshold, because basic needs vary from one individual to another, particularly in the case of a heterogeneous population, and what constitutes 'normal' involvement in the social and productive activities of an economy varies according to the complexity of that economy. The level of absolute poverty also varies with time and place.

Another technical problem is whether to look at spending or revenue and more difficulties arise when the unit of analysis is the household and not the individual. And it would be wrong to confine attention to private income, when access to public goods and services and to collective resources also contributes to the standard of living.

The concept of relative poverty shows that people are poor in relation to other people - but obviously, there again, the thresholds are arbitrary.

Can poverty be measured?

Given the degree of arbitrariness involved in defining a poverty threshold, it would be as well to see how sensitive poverty is to any shifting of that threshold. The more unequal the distribution of income-spending around the threshold, the weaker the sensitivity will tend to be. Indeed, sensitivity to the poverty threshold varies not just according to the rate of economic growth, but according to the effects of income redistribution.

Poverty perhaps could also be measured in terms of incidence and depth. There again, a comparative analysis is not really significant. The fact of knowing that a particular percentage of the population of France or Bangladesh is below the bread line tells us nothing about the relative extent of poverty in those countries.

The incidence of poverty is generally taken to be a percentage of the total population living below the poverty threshold. The depth of an individual's poverty can be measured as the gap between a poverty threshold and his/her level of income-expenditure and the figure can be used to determine how much would need to be transferred for the person in question to emerge from poverty. The average gap of the whole of the poor population can be calculated and expressed as a percentage of the poverty threshold - the income gap ratio. But even this measurement is not sensitive to income distribution within the group of poor people.

Poverty can be approached other than through estimates of income and expenditure. The question of access to public goods and services, for example, can only really be pinpointed usefully by means of social indicators, which are difficult to quantify. A number of essential parameters (life expectancy at birth, infantile and maternal mortality, for example) are also wellbeing indicators and affect monetary comparisons.

Global data make no distinction between permanent poverty and temporary poverty brought about by the passing instability of some income. They do not reflect the risks of vulnerability, the dangers of precariousness, cyclical economic poverty or the exacerbation of poverty which is penury and a slide into structural exclusion.

If the European Community is to have a proper understanding of a phenomenon as complex and diversified as poverty, it has to use instruments of measurement which can handle several dimensions at once and, in particular, reconcile:

- a global approach, at the level of a whole society, and an individual approach, at the level of particular situations of groups of individuals or households;

- a quantitative approach (how many poor people ?), to allow for comparisons, and a qualitative approach (how do they see and feel this poverty?), aimed at a better understanding of the diversity of poverty conditions;

- a structural approach (determinants and cause of poverty) and a cyclical economic approach (seriousness of situations and effects of poverty);

- a static approach, describing and comparing the situation at a given moment, and a dynamic approach, analysing the poverty-generation machinery;

- an economic approach (analysis of stocks and flows) and a sociological approach (behaviour analysis).

Understanding and acting

The academic and institutional literature reveals considerable uncertainty on our subject.

A look at the past shows that poverty has not always been the opposite of wealth, for in Europe, for example, the poor tended to be against the powerful rather than the rich. But clearly, the dimensions of poverty are not just material. They also relate, in particular, to our perception of poverty and the way in which others see the poor Poverty is not just the result of economic factors. It also has to do with social phenomena, such as discrimination, lack of organisation and so on. And, increasingly clearly, the poor want to define their own poverty.

But the poor do not have, or have no longer, the codes of 'good society'. Poverty blunts the spirit and sometimes makes them incapable of rebellion. You have to listen to the poor for a very long time to find out what they have to say, yet listened to as they must be now, it is increasingly obvious that it takes more than economic growth to eradicate poverty and that anti-poverty campaigns are not just held back by lack of funds but by a failure to understand the machinery which grinds the poor down into exclusion.

Exclusion

Poverty is not just an absolute lack of the basic needs. It is also exclusion from the goods, services, rights and activities which constitute the basis of citizenship, so the eradication of poverty is inseparable from the promotion of social inclusion.

The concept of social exclusion is different from the concept of poverty, which is more static than dynamic and too exclusively focused on monetary poverty. The concept of social exclusion also caters for the fact that the various dimensions of exclusion strengthen each other.

If there is a process which actually generates exclusion, it would be more efficient to try to change it than to seek palliatives for its effects. Understanding poverty, rather than just measuring it, is the only way of repairing the social damage it embodies.

Dominique DAVID