The Fundamental Stupidity of Our Anti-Poverty Policy

Consider a game of musical chairs. Now suppose our goal is to help out the poor people who were unable to find a chair when the music stopped. We could train them to be quicker, or we could make life more miserable for the losers, or try to match them with a particular chair ahead of time. All of these policies are obviously doomed to failure. No matter how much we help individual players in the game, there still aren’t enough chairs. The only solutions are to either have enough chairs for everybody or play a different game.

Now, consider our anti-poverty policy. We could educate people, or deny them unemployment benefits to make their lives miserable, or match them with jobs in a certain sector (of course, after a two-year vocational degree and student loans there’s no guarantee that sector will still be hiring). Ultimately, however, none of these solutions will solve the problem of poverty. In an economy where college-educated individuals are taking jobs that only require a high school education, the idea that additional education will solve poverty is laughable. It might help an individual, but unless there are more total jobs it just means displacing someone else.

There’s a long debate in poverty circles between personal causes of poverty and structural causes of poverty. A personal cause might be failure to show up on time to work leading to being fired, while a structural cause is inadequate access to medical insurance (i.e. the person can’t take a job because they’d lose medicaid but and not have anything to replace it). There are also causes that are a mix of structural and personal, for instance, dropping out of a bad high school is the result of both a personal decision and a structural factor (lack of access to quality education). Increasingly though, even structural diagnoses have focused on the individual. If we remove ‘barriers to work’ by providing proper education, medical coverage, child care, a tax credit that increases wages and so forth we will solve the structural problems that prevent individuals from working.

Unfortunately, this amounts to focusing on the individual players in our musical chairs game, while ignoring the real problem: there aren’t enough (insert expletive of choice) chairs!! “But wait!” I can hear the economists object. In a dynamic economy there’s not a fixed number of chairs. By improving individuals we can increase productivity and so increase the number of chairs. Now, we could get into the nuts and bolts of economic theory, but while that would be fun for me, you’d probably prefer the much more straightforward reply, “look at history.” The economy has grown much, much faster than the population for the past 60 years…and yet there still aren’t enough chairs. In fact, saying 60 years was being generous. The U.S. economist Henry George wrote in 1871:

The past century has been marked by a prodigious increase in wealth-producing power. It was naturally expected that labour-saving inventions would make real poverty a thing of the past. Disappointment, however, after disappointment has followed. Discovery upon discovery, invention after invention, have neither lessened the toil of those who most need respite nor brought plenty to the poor. The association of poverty with progress is the great enigma of our time. (From Our Land Policy)

Since 1871 the wealth of each individual in the United States has increase over 13 times. And as George points out in 1871 we’d just experienced a century of growth that should have eliminated poverty. We had enough wealth in 1871 to eliminate poverty, and today we have thirteen times as much wealth per person as we did then. And yet we still have poverty. What has gone wrong?

As it turns out, poverty is not something that can be solved by technology or economic growth. And while we can (and should!) make life less miserable for the poor by providing a social safety net the roots of poverty go much deeper. We comfort ourselves with the though that poverty in the midst of affluence is an enigma, or a paradox that will go away if only we have enough scientific know-how. Poverty is rooted in the very structure of our political economy. As long as political and economic power is unequally distributed, so too will political and economic outcomes be unequally distributed.

This leaves poverty researchers with some new tasks. As Alice Connor writes in Poverty Knowledge:

The first task is to redefine the conceptual basis for poverty knowledge, above all by shifting the analytic framework from its current narrow focus on explaining individual deprivation to a more systematic and structural focus on explaining- and addressing – inequalities in the distribution of power, wealth, and opportunity. A second is to broaden the empirical basis for poverty knowledge – recognizing that studying poverty is not the same thing as studying the poor – by turning empirical attention to political, economic, institutional, and historical conditions, to the policy decisions that shape the distribution of power and wealth, and to interventions that seek to change the conditions of structural inequality rather than narrowly focusing on changing the poor.

One of the most frustrating things for advocates about going down this path is that the answers aren’t clearly defined. We know that a well-designed social safety net can alleviate misery. We don’t know which institutional reforms can change structural inequality without having intolerable side effects. (There are some pretty good ideas out there, and some of them even have decent evidence from other countries, but we’ll leave that for another time). Of course, what’s frustrating for advocates is exciting for researchers, as long as they remember that the study of poverty is not the study of the poor, but rather the study of a social, political, and economic system that produces poverty. Perhaps at one time poverty was produced by natural scarcity, but that is clearly not the case today. The solutions to poverty exist, but they are political, ideological, and social rather than technological and scientific.

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