#BTColumn- Solving poverty

by Peter Webster

“You can’t get rid of poverty by giving people money.” – P.J.

O’Rourke, political satirist “In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.” – Confucius, Chinese teacher and philosopher “There is enough in the world for everyone’s need, but not for everyone’s greed.” – Frank Buchman, Protestant evangelist Poverty is like a glue trap – “It takes nothing to stay in poverty, but everything to break free from it.” – Idowu Koyenikan “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” – Plutarch The economic situation in Barbados, compounded by the effects of the current pandemic on our main industry (tourism) and our “lockdown” to save lives, has resulted in increasing unemployment and levels of poverty hitherto unseen in Barbados, especially in recent times. Already hungry children are begging for food.

We all need to be realistic and be prepared to respond to what can only be termed a pending tragedy because our Government’s ability to respond is limited. The need of employers to ensure their financial viability must be balanced by their need to protect their employees’ livelihood; for what will the employers’ financial viability be worth if their economic community collapses?

Alternatives such as pay cuts may well be preferable to the breadline.

The many varied definitions of poverty imply its complexity and the lack of understanding of its true nature. What causes poverty? How to solve it? What are the symptoms of poverty? These are often thought to be the lack of resources such as cash, assets and ability to generate employment, which is linked to employability, which is linked to education, which is linked to skills, housing and health. However, poverty cannot be truly alleviated by purely treating the symptoms.

Unfortunately, education is not filling a bucket, but lighting a fire. The objective of education is learning, not teaching. What we need to learn is how to love; how to think; how to know what is going on in someone else’s mind; how to live within our means; how compound interest works for us and against us; how to save; how to invest; how to avoid debt; how and when to insure which comes with a cost (if you cannot afford to replace it – insure it); how to be prepared for emergencies.

Poverty alleviation is a key role of the Government and one of the reasons why public sector productivity is so crucial. The wealthy and powerful in a society must be encouraged, if not coerced, into contributing to poverty alleviation, but their primary role is to use their wealth to generate more goods and services for their own use (wealth) and for distribution to others mainly through employment creation in much the same way that a farmer’s job is to make a living for himself and his family by producing food.

Although the food he produces can then be used to help feed the poor, feeding the poor is not the farmer’s primary goal.

It is in simply treating the symptoms of poverty as opposed to the causes that we fail to alleviate that poverty. The Food and Agriculture Organization (FAO) of the United Nations has repeatedly targeted the reduction of food prices as a remedy for making food more available for the poor and reducing poverty, but this is self-defeating since it hurts the producers and suppresses food production.

It is hard to encompass every dimension of poverty as it affects people in their daily lives, especially the psychological dimensions and the malaise that often suffuses poor communities. The way poverty is measured is also not helpful in that it relies on arbitrary lines (based on some equivalence with the amount of money, goods and services locally defined as a basic level) but its arbitrariness tends to ignore those who, for whatever reason, just exceed the line, but have few marked differences in lifestyle.

This is a constant policy problem.

In the literature, psychological dimensions are commonly addressed through case studies describing, often in people’s own words, just what living in poverty means. There are several of these which can be found in the literature for further reading.

The big debate, of course, is what causes poverty? The basic issue is whether poverty is due to personal failings in the individual or is due to fundamental inequality in economic systems. This tends to divide into ‘left’ and ‘right’ perspectives. In the words of C.
Wright Mills: is poverty a ‘public issue’ or a ‘private trouble’? The conventional wisdom tends to favour the latter as the root cause but it is more likely to be a bit of both and not a simple ‘left’ or ‘right’ decision, for even in socialist or social-democratic systems poverty not only persists, but is just as widespread because those systems do not produce the quality and quantity of goods and services needed.

However, holding one view or the other is critical for the social policy that might emerge in response: either welfare and charity or rights to living standards or something between the two?

It is clear, however, that in capitalist systems, the poor are usually those with the least utility for the functioning of the system overall. That is, they lack education, have poor access to earnings and opportunity, health care, housing, etc. The way we shape our lives and improve them materially seems very much a function of social location, kinship, class, race and ethnicity which are crucial to the formation of “who” we consider ourselves to be and from which we confront the social systems which circumscribe living.

The countries with governance systems that have achieved the lowest levels of poverty are the ones that have best balanced the private sector’s productive capacity with social needs through the provision of “economic ladders” such as education, housing, health and employment opportunities or the means by which the poor can climb out of the glue trap along with the necessary social safety nets. It also follows that those countries have the most productive public sectors without which neither the productive capacity of the private sector nor the functioning safety nets can be realized.

In these dire times, Barbados truly needs a more productive public sector than one whose implementation deficit is the 70 per cent identified by the International Agencies.

NB: I am indebted to the Caribbean Development Bank’s policy paper on poverty and a former CDB colleague, who coauthored it, for his input into the foregoing.

Peter Webster is a retired Portfolio Manager of the Caribbean Development Bank and a former Senior Agricultural Officer in the Ministry of Agriculture.