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Poverty reduction as a goal sounds lovely, but this fairy tale vision of development and of human rights betrays a serious misunderstanding of poverty

Guest content
17 July 2017

A collection of myth-busting insights about global inequality and the creation of poverty, with key questions to ponder in the latest human rights reader no. 417, by Claudio Schuftan.

1. Poverty does not just exist out there, as if it were a natural phenomenon; rather, it is actively produced through the processes of marginalization, dispossession, and exploitation that allow for the accumulation of wealth elsewhere. In other words, there is an intimate relationship between wealth and impoverishment: As is, the flipside of development is the deprivation suffered by a sizeable chunk of the marginalized majority. Development models that fail to challenge the structure of wealth accumulation will only continue to reproduce the problem they seek to address. 

2. The ‘one percenters’ are going to have to feel the pinch –there is no way around it. The approach to reducing poverty and hunger as key human rights (HR) violations requires much more than just a bit of foreign aid here and there. It will require challenging particular political and economic interests. Indeed, this seems to be precisely why the world’s governments and international institutions are so eager to promote the ‘good-news’ of poverty-already-having-been-reduced. If they were to use more accurate measures of poverty and hunger, it would become clear that, to really eradicate these problems, we need to change the rules of the global economy, to make it fairer for the world’s majority. (J. Hickel)

3. So, let us be clear: As much as those who have been rendered poor are made invisible –they are not forgotten or left aside; they are just not seen. (Michel Harrington) This is why the SDGs’ ‘Leave No One Behind’ motto is one more empty slogan. Hiding poverty leads to perpetuating it. A dignified life comes from having work. Therefore, to stop investing in people in the name of greater profits elsewhere is a disaster for society.* (Albino Gomez)

* Keep in mind: Like many other civilizations before, ours surely has a date in which it will collapse. (Arturo Perez Revert) The question is how distant that date is. So, “If you happen to see the future, tell him not to come” (Juan Lose Castelli). Given the dominance of neoclassical theory in evaluating and analyzing economic outcomes, it is worthwhile examining the relationship between this approach, inequality and human rights.

4. The distinction between inequality of opportunity and of outcome is particularly salient when considering the HR framework (https://en.wikipedia.org/wiki/Economic_inequality). This, since the issues around inequality of outcome are much more central in discussions of economic and social rights than are issues around inequality of opportunity (the latter necessary but not sufficient). 

5. Individual purportedly ‘rational’ choices are the core of neoclassical economic theory –each firm makes choices to maximize its own profits and each individual or household maximizes its own ‘utility’, i.e., the satisfaction they get from their consumption decisions. Although neoclassical economics does have a theory of what determines income distribution, it consistently sidesteps the question of the consequences of inequality and instead evaluates economic outcomes primarily in terms of efficiency.**

**: But what does ‘efficient’ really mean? In reality it means that no one can be made better off without making someone else worse off. One practical application of the idea of efficiency is the use of cost-benefit analysis to evaluate policy choices: Is this human rights-compatible?

6. Cost-benefit analysis measures the costs and benefits of implementing a particular policy –if the benefits are greater than the costs, the policy should be adopted. It is precisely the concept of efficiency that is used to justify this approach. If those who benefit were to compensate those who lose (i.e., those who end up paying the costs of a particular policy), the assumed winners could fully compensate the losers –making some better off without making anyone worse off. Such compensation hardly ever takes place. Therefore, in practice, cost-benefit analysis ignores the distributive consequences of policy choices. The rich can and do receive all the benefits of a particular policy and it is still deemed a social improvement, as long as the benefits outweigh the costs. The question of what is a just distribution of income and wealth falls outside of the purview of neoclassical thinking.

7. Fairness and social justice must be defined in terms of actually realized outcomes (not just opportunities, as said above). Realized outcomes can be measured along a number of dimensions: income, wealth, health, education, etc. People do not have similar choices to realize outcomes when they lack the income needed to pursue those choices, e.g., if they die prematurely from a preventable illness, or if they are shut out of educational opportunities. 

8. The human rights framework has at its core the principles of non-discrimination and equality. But note that this does not necessarily imply a perfectly equal distribution of income and wealth. Why? Because there are structural sources of inequality and indirect forms of discrimination. This is why equality/inequality have to be understood in relation to outcomes and results and not only opportunities (or access). Poverty is a measure of deprivation, not of distribution. 

9. Lower rates of poverty do not necessarily imply less inequality. Poverty declines when the incomes of poor households increase, but inequality can still worsen if the incomes of the well off grow even faster. Income and wealth are means to an end, not the end itself. Having a certain level of income helps people realize their rights –to health, education, housing, an adequate standard of living, and so forth. But what matters is all the rights taken together; that is what is ultimately important. Otherwise, disparities become permanent. 

10. When the political power of the elites expands as the income and wealth distribution becomes more skewed, this negatively affects the realization of human rights –economic and social rights, as well as civil and political rights. 

11. There is further significant evidence that supports the idea that greater inequality reinforces political processes that compromise the realization of economic and social rights. As Philip Alston, UN Special Rapporteur on Extreme Poverty, stated in his 2015 report: “Economic inequalities seem to encourage political capture and the unequal realization of civil and political rights.” (Human Rights Council, 2015). 

12. Greater inequality is also associated with less redistributive government spending. Related to this is the fact that economic elites are likely to resist progressive forms of taxation that, in turn, limits the ability of the government to mobilize resources for the fulfillment of the various HR. It is clear: The current structures of global economic governance are shaped by the vested interests of elites throughout the world. The HR framework does not stop short in denouncing this particular distribution of income and wealth issue as squarely unfair. (The above adapted from James Heintz and Radhika Balakrishnan). The World Bank’s mantra of ‘reducing poverty’ translates into safety nets for the very poor, but this accepts and exacerbates inequality.

13. As I keep repeating, current strategies, including those in the SDGs, do not emphasize controlling the processes that create poverty, i.e., focusing on disparity reduction rather than on poverty reduction (Urban Jonsson).

14. What we really see is that too many poverty alleviation initiatives are all about adapting individuals to what are toxic conditions instead of eliminating toxicity from society. (Susan Rosenthal). Never in human history has severe poverty been as easily and as completely eradicable as in the present period (heard this before…?)

15. That we continue to perpetuate poverty through national and supranational institutional arrangements massively skewed in favor of the rich manifests a great moral failing of our generation, of governments and citizens alike (Thomas Pogge).

16. To be successful, governments and politicians in power must appear to care about the issues the citizens of their countries care about and must appear to be effective in addressing these issues. Citizens care about severe poverty, hunger and HR, both at home and abroad. Therefore, governments and politicians in power ought to have an interest in expressing support for the struggle against poverty and hunger, as well as for HR. 

17. Do you agree? Development goals, food summits, climate agreements… are true political spectacles: put on as propaganda, as public relations exercises. They give governments a very public way of showing that they care as much as we citizens do, and perhaps even more-so to end poverty in all its forms once and for all. Through this concerted display, governments produce not only political allegiance to themselves, but also complacency: when nearly all governments agree to something, then it is a done deal and we citizens need no longer worry about it or agitate for it. …they are on it! Right? Hmmmm! And through this, governments also divert attention away from the structural causes for the persistence of severe poverty, as well as from the powerful forces that the present organization of the global trading and financial systems produces. 

18. Led to celebrate the great ‘paper advances’ of the SDGs and the Paris Climate Agreement, we citizens are led to overlook the very real fact that 2015/16 also saw the richest 1 % of humanity expand its share of global private wealth to over half (50.4 %). The poorer half of humanity, meanwhile, was squeezed down to a mere 0.6 % of global private wealth, as much as is owned by the world’s richest 62 billionaires. Is it what really matters to these governments that their neoliberal globalization project is perceived as equitable and successful? Will they give up monopoly control over the official development data that show this is happening? (Beware that not all national statistical offices are wholly objective and free from political influence.) (Thomas Pogge.) These are key questions for you to ponder.

"An imbalance between rich and poor is the oldest and most fatal ailment of all republics." (Plutarch, ancient Greek biographer, 46–120 CE)

"Be reminded that poverty, as such, is now classified as a human rights violation." (Francine Mestrum, CETIM)

"Poverty is part of the system, not an event!" (Seth Godin)

"What if the problem of poverty is that it is profitable to other people…?" (Matthew Desmond) 

"When people rendered poor know their rights and can act on this knowledge, long-term change becomes more likely." (A. Campolina)

"There are people rendered so poor that they only have money…" (Albino Gomez) 

Claudio Schuftan, Ho Chi Minh City

Original source: http://claudioschuftan.com