Poverty is here to stay
At least in theory, the industrial revolution was meant to put an end to the inequal distribution of goods in society, thus ultimately tackling poverty. Indeed, industrial production of foods tends to curb poverty somewhat, but it in no way removes it altogether.
In the last two centuries, the Western societies have created a new instrument against poverty, the social state. Poverty was perceived as a structural problem, caused by the very essence of the economic framework, and triggered by the twists and turns of life. The one who lacked income, who was old or ill, would receive support through social insurance, so they could at least rely on some basic social net. They would no longer be fully dependent on help from the family, or the mercy of their peers, or alms from charities. At least that is how it was supposed to be on paper.
It is true that in the pre-modern societies, people in need were often being helped by various charity organisations, often under the patronage of various religious institutions using the fact that poverty and charity was being perceived as a virtue. By giving alms to the poor, the wealthy would hope to pave their way to Heaven, and answer the call of their conscience (or rather, silence it). The poor beggar was generally being perceived as pious, a true follower of Jesus in some sense.
And yet, by the beginning of the 20th century, the fight against poverty remained a chaotic, arbitrary, demoralising and repressive activity. The poor was poor because they could not handle their life on their own, the general sentiment claimed. The poor was solely responsible for their misery, and ought to carry the burden of the consequences in silence. The upper class would at times organise a sort of "hunt for the poor", driving them away, forcing them to go back to their place of origin, where they had preivously fled from, either for lack of prospects or for some other not-so-unimportant reason. Other measures against poverty were the wide-spread ban on beggary, even bans on marriage to the socially weak, and forceful settling into institutions where the poor, homeless beggars would be kept out of sight.
The social state did put an end to these practices, but in the meantime it clashed with the so called "new poverty", which was also the most carefully concealed type of poverty at the time. Among its main reasons were most of all permanent unemployment, the expanding sector of low-paid labour, where the people affected would have incomes barely sufficient for providing even the most basic goods and services for a normal life and proper integration in society.
The new type of poverty has shown that the social state with its system of insurance services is heavily orientated toward the model of the stable, sustained employment that guarantees normal existence. But this model is slowly eroding, and in today's circumstances this is having heavy consequences: those who happen to interrupt their employment (mostly women) are severely underprivleged in this respect; many never manage to make ends meet, even if they work several jobs for ridiculous payment. The fact that more and more people depend on social aid to survive, is undermining the very foundation of the modern social state: gradually, these people are relegated to mere beggars, relying on alms like in the 19th century, practically devoid of civil rights because of their dependency, and who, on top of all that, are expected to be grateful to society for the state they have slipped into.
The World Bank has now urged the developed countries to contribute more to the fight on poverty. The latest WB and IMF reports are clear on this matter: statistical economic growth alone is insufficient in the fight on poverty. Much more important than mere growth is that prosperity should really be accessible to all layers of society. So how to achieve that? Well, the WB prescribes additional government programs that would grant direct financial transfers to the socially weak, under certain conditions. An example of such a program is the Brazilian "Bolsa Familia" program, which grants financial support for families that regularly send their kids to school and to prophilactic medical checks.
Evidently, the World Bank is abandoning its previous doctrine. In the past, it used to rely on consumer installments. And this has worsened the situation in both the health-care and the education system, because the poorest people in the poorest countries have found it impossible to pay their social security installments.
In the past, the WB used to put a condition for granting loans in the developing countries: it required the privatisation of the state services in the education, health-care and water supply sphere. A painful example of the consequences of this policy was the "water war" in Bolivia from 14 years ago, when the population protested against the intentions of their government to privatise water supply.
Even if all countries somehow manage to register sustained economic growth within the next 20 years, poverty around the world would have only decreased by 10% by 2030, the WB president Jim Yong Kim has announced. And those living under 1.25 $ a day are the ones who are considered the bottom segment.
The UN had set a goal in front of itself to completely eradicate poverty by 2030, but in order to achieve that, every year 50 million people around the world would have to overcome the poverty threshold - which means roughly a million per week. And because clearly all these people could hardly do it on their own, it is the state's responsibility to contribute in that effort - be it with direct financial aid, or through restructuring services and public systems, or devising specific state programs to stimulate the poorest - while avoiding the temptation to turn them into fully dependent serfs.
The stats shows that 1.2 billion people around the world are beneath that threshold. 1/3 of them live in India. The WB lists 10 African and Asian countries where 80%+ of the poorest people in the world live: India, China, Nigeria, Bangladesh, DR Congo, Indonesia, Pakistan, Tanzania, Ethiopia and Kenya.
Last December the WB collected from its member states aid worth of 52 billion dollars, dedicated to these poorest countries. They are expected to invest that capital in public projects and essential services - mainly for enforcing the public health-care and education services, and reforming the tax systems of these countries, so they could use their own public revenue more efficiently. The idea is that people should be taxed according to their wealth, not just based on the VAT, which additionally burdens the poorest layers of society.
It is not just the World Bank that has consistently been warning about the danger of the extremely dangerous consequences of rising social inequality in many developing and emerging economies. A recent IMF research also concluded that the huge income gaps are a direct obstacle to sustained economic growth, and tend to trigger social strife, unrest, and ultimately, radicalisation and conflicts. In this sense, adopting moderate policies of wealth redistribution (as dreadful as that may sound to some, being one of the most excessively exploited soundbites by people of a particular political mindset), have proven to have a favourable effect for economic stability overall.
In the last two centuries, the Western societies have created a new instrument against poverty, the social state. Poverty was perceived as a structural problem, caused by the very essence of the economic framework, and triggered by the twists and turns of life. The one who lacked income, who was old or ill, would receive support through social insurance, so they could at least rely on some basic social net. They would no longer be fully dependent on help from the family, or the mercy of their peers, or alms from charities. At least that is how it was supposed to be on paper.
It is true that in the pre-modern societies, people in need were often being helped by various charity organisations, often under the patronage of various religious institutions using the fact that poverty and charity was being perceived as a virtue. By giving alms to the poor, the wealthy would hope to pave their way to Heaven, and answer the call of their conscience (or rather, silence it). The poor beggar was generally being perceived as pious, a true follower of Jesus in some sense.
And yet, by the beginning of the 20th century, the fight against poverty remained a chaotic, arbitrary, demoralising and repressive activity. The poor was poor because they could not handle their life on their own, the general sentiment claimed. The poor was solely responsible for their misery, and ought to carry the burden of the consequences in silence. The upper class would at times organise a sort of "hunt for the poor", driving them away, forcing them to go back to their place of origin, where they had preivously fled from, either for lack of prospects or for some other not-so-unimportant reason. Other measures against poverty were the wide-spread ban on beggary, even bans on marriage to the socially weak, and forceful settling into institutions where the poor, homeless beggars would be kept out of sight.
The social state did put an end to these practices, but in the meantime it clashed with the so called "new poverty", which was also the most carefully concealed type of poverty at the time. Among its main reasons were most of all permanent unemployment, the expanding sector of low-paid labour, where the people affected would have incomes barely sufficient for providing even the most basic goods and services for a normal life and proper integration in society.
The new type of poverty has shown that the social state with its system of insurance services is heavily orientated toward the model of the stable, sustained employment that guarantees normal existence. But this model is slowly eroding, and in today's circumstances this is having heavy consequences: those who happen to interrupt their employment (mostly women) are severely underprivleged in this respect; many never manage to make ends meet, even if they work several jobs for ridiculous payment. The fact that more and more people depend on social aid to survive, is undermining the very foundation of the modern social state: gradually, these people are relegated to mere beggars, relying on alms like in the 19th century, practically devoid of civil rights because of their dependency, and who, on top of all that, are expected to be grateful to society for the state they have slipped into.
The World Bank has now urged the developed countries to contribute more to the fight on poverty. The latest WB and IMF reports are clear on this matter: statistical economic growth alone is insufficient in the fight on poverty. Much more important than mere growth is that prosperity should really be accessible to all layers of society. So how to achieve that? Well, the WB prescribes additional government programs that would grant direct financial transfers to the socially weak, under certain conditions. An example of such a program is the Brazilian "Bolsa Familia" program, which grants financial support for families that regularly send their kids to school and to prophilactic medical checks.
Evidently, the World Bank is abandoning its previous doctrine. In the past, it used to rely on consumer installments. And this has worsened the situation in both the health-care and the education system, because the poorest people in the poorest countries have found it impossible to pay their social security installments.
In the past, the WB used to put a condition for granting loans in the developing countries: it required the privatisation of the state services in the education, health-care and water supply sphere. A painful example of the consequences of this policy was the "water war" in Bolivia from 14 years ago, when the population protested against the intentions of their government to privatise water supply.
Even if all countries somehow manage to register sustained economic growth within the next 20 years, poverty around the world would have only decreased by 10% by 2030, the WB president Jim Yong Kim has announced. And those living under 1.25 $ a day are the ones who are considered the bottom segment.
The UN had set a goal in front of itself to completely eradicate poverty by 2030, but in order to achieve that, every year 50 million people around the world would have to overcome the poverty threshold - which means roughly a million per week. And because clearly all these people could hardly do it on their own, it is the state's responsibility to contribute in that effort - be it with direct financial aid, or through restructuring services and public systems, or devising specific state programs to stimulate the poorest - while avoiding the temptation to turn them into fully dependent serfs.
The stats shows that 1.2 billion people around the world are beneath that threshold. 1/3 of them live in India. The WB lists 10 African and Asian countries where 80%+ of the poorest people in the world live: India, China, Nigeria, Bangladesh, DR Congo, Indonesia, Pakistan, Tanzania, Ethiopia and Kenya.
Last December the WB collected from its member states aid worth of 52 billion dollars, dedicated to these poorest countries. They are expected to invest that capital in public projects and essential services - mainly for enforcing the public health-care and education services, and reforming the tax systems of these countries, so they could use their own public revenue more efficiently. The idea is that people should be taxed according to their wealth, not just based on the VAT, which additionally burdens the poorest layers of society.
It is not just the World Bank that has consistently been warning about the danger of the extremely dangerous consequences of rising social inequality in many developing and emerging economies. A recent IMF research also concluded that the huge income gaps are a direct obstacle to sustained economic growth, and tend to trigger social strife, unrest, and ultimately, radicalisation and conflicts. In this sense, adopting moderate policies of wealth redistribution (as dreadful as that may sound to some, being one of the most excessively exploited soundbites by people of a particular political mindset), have proven to have a favourable effect for economic stability overall.