What is Poverty? (6): Absolute or Relative Deprivation?

Is poverty a lack of basic resources, or instead the unequal distribution of resources? Is it the absolute income or wealth of people that matters, or the fact that other people are richer and can afford more luxuries? Intuitively, one would go with the former of those options: people are poor when they are starving or homeless or when they lack some other basic necessity. People can have enough of all basic necessities and still be a lot worse of than some group of ultra-rich. One the other hand, what counts as a basic necessity is not always obvious, and people may form their ideas about necessities in light of the lifestyle of the average member of their society at the current moment in history.

This is another way of expressing the difference between absolute and relative poverty. In the US, it’s common to defend and use an absolute definition of poverty (as does the World Bank), whereas in Europe the focus is on relative poverty. The difference is an important one, because the use of one or the other definition of poverty determines who counts as poor or not. Hence, it also determines who gets government assistance.

Now, something strange is going on here. Intuitively most people favor an absolute definition of poverty – that’s what my own intuition and an unscientific sample of friends tells me –  and yet, if you ask people what one needs to get by in life, the amounts they give you are far above commonly used absolute poverty thresholds. In fact, these amounts are closer to median income. And as median income rises, the amounts supposedly necessary in order to get by also rise. This tells us that people actually use a relative notion of poverty. And this is true even for the country that is supposedly most naturally in favor of an absolute notion of poverty, namely the US.

I made a similar point here. More posts in this series are here.

What is Poverty? (4): Does the Concept of Poverty Collapse Under the Weight of Historical Comparisons?

Many of the people who are considered poor in developed countries have a higher living standard than the average middle class citizens of some centuries ago. If we bracket the minority of the extremely poor in developed countries (the homeless for example), poverty today seems to be a relatively comfortable position to be in, once you see it in a historical perspective.

The same is true for people in poor countries. In 1820, average income per person was low everywhere in the world: about $500 in China and South Asia, and about $1000-$1500 in Europe (1993 US$ PPP). In developing countries today the range is between $1000 and $3100 (the world average is about $6000, the US has more than $40,000). So, the poor of today are equally well off or even better off than the average world citizen 200 years ago. 75% of the world’s population lived on less than $1 a day in 1820. Today, almost no one does in the West. In China it’s less then 20%, in South Asia 40%, in Africa half. Globally, it’s less than a quarter. Historically, almost everyone was poor; today it’s a minority.

So it seems almost futile to talk about poverty today. What is defined as poverty now was the normal way of life not so long ago. However, if that’s the way you want to go, the concept of poverty evaporates. You’ll always find someone who’s worse off. You just need to go sufficiently far back in time (or move in space) to find people who are more deprived and who make the current poor (or the local poor) seem relatively well off. The baseline is then the caveman and everyone else isn’t really “poor”.

Hence, if you want to keep talking about poverty, you can’t engage in historical comparisons. Does that mean that poverty can only be measured against the current average standard of living? That poverty is a percentage of current median income? In that case, there will always be poverty and the fight against it is a Sisyphean task. I’m not entirely convinced of the usefulness of the concept of relative poverty – that you should compare people’s living standards to society’s average standard (where poverty becomes basically income inequality) – and the historical rather than spatial version of relative poverty reinforces my doubts. However, I know that people commonly see poverty as a relative thing and that they may feel deprived because they compare themselves to their living compatriots and not only because they are below a certain absolute level of income, consumption or capabilities. Conversely, the middle classes of some centuries ago, even if they had the same standard of living as some of today’s poor, felt good about themselves because they looked at the poor of their time and felt that they had done comparatively well.

Still, relative poverty is not the only solution to the problem of historical comparisons. Poverty can be measured relative to average historical or current standards of living, but can also be measured by comparing consumption, income or capabilities to a commonly accepted absolute minimum level (for example a minimum amount of calorie intake).

In the latter case, it’s not important how rich the rich really are, or what the median income is, or how poor the poor were centuries ago. It’s important to know what are people’s basic needs, how much they cost, and how many people currently can’t buy the stuff to fulfill their basic needs. Of course, these basic needs can’t always be determined scientifically (as in the case of calorie intake) and some level of arbitrariness is unavoidable. A lot depends on the capabilities we believe are necessary in order to have a minimally decent life, and that’s controversial.

I also understand that social norms evolve and that basic needs can change over time. Several centuries ago a microwave and a cellphone were obviously not a basic need; now you will be considered poor if you lack these tools. In a pre-modern agrarian society, you would have been considered poor only when you were on the brink of starvation. You didn’t need technological tools, child care, education etc. in order to have a minimally decent life, because no one had those things and your functioning in the economy didn’t require them. Today, if you don’t have them, you’ll feel excluded, less than normal, weird, “trash” and in certain cases you’ll end up deeper in poverty because you’ll have a hard time finding a job if you don’t have a car, a cell phone or child care.

Also, why shouldn’t we become more ambitious over time? Should we be content if we’re able to avoid only the worst kind of deprivation? Or should we try to continually improve many different capabilities? The latter is I think a sign of civilization and progress. That doesn’t mean we should scatter our attention and forget to focus on the worst deprivation. It only means we shouldn’t stop after we’ve dealt with the worst. And we haven’t dealt with the worst simply because the percentages of those worst off have been coming down (see the numbers cited above). Indeed, a smaller share of the world’s population suffers from low income than some time ago. But because of population growth – which is a good thing resulting from higher life expectancy rates – the total number of people with low income is now higher. And total numbers also count, just as much as percentages. As Thomas Pogge has argued, the Holocaust wouldn’t be any less horrible if it turned out that the number of people killed was a smaller percentage of the world’s population than initially thought.

What is Poverty? (5): A Psychological Thing

Poverty is not just the absence of sufficient income or a level of consumption that is below a minimum threshold. Poverty is multidimensional: it also means bad health, high mortality rates, illiteracy etc. And these different elements of poverty tend to have a negative effect on each other (the so-called poverty trap). Being deprived of literacy or education is usually seen as an obstacle to material wellbeing.

The absence of material wellbeing – whether expressed in terms of income, consumption, health, mortality etc. – is often viewed as an isolated evil. However, it’s possible to make the case that it can also have psychological effects that harm people’s mental wellbeing. If this is true, and I think it is, then poverty does more harm than we usually think it does.

I believe it’s widely accepted that poverty does some psychological damage, such as stress, depression, loss of self-esteem and of the feeling of control, loss of ambition and aspirations etc. Although usually people assume – correctly or not – that this type of damage is less severe or less urgent than the physical damage that results from poverty (such as bad health, mortality, hunger etc.). Some even argue that there’s a tendency to overemphasize the link between material deprivation and (the perception of) subjective wellbeing, and that psychological problems which may seem to be caused by material deprivation have in fact other causes (genetics, upbringing, personality etc.).

However, I think the tendency is rather to underestimate the effects on mental wellbeing. A recognition of the psychological effects of poverty would also open the possibility of a more positive evaluation of notions such as poverty as vulnerability and relative poverty. Vulnerability, or a high level of risk of poverty, can perhaps produce the same amount of stress as actual poverty. And one’s self-esteem can suffer as much from actual deprivation (including illiteracy) as from comparative (or relative) deprivation (e.g. comparatively low levels of education or income).

What is Poverty? (3): Vulnerability

Definitional discussions about poverty have convinced me that there are actually different types of poverty. I don’t think that all types are equally urgent policy problems, although they’re all worthy of attention (personally, I think poverty as absolute material deprivation is the one to focus most attention on, rather than relative poverty, poverty as a mental harm etc.).

One type I haven’t discussed a lot is poverty as vulnerability. This isn’t actual poverty in the sense of existing destitution; it’s rather the presence of a high level of risk of poverty, a high level of insecurity or a high probability of becoming poor. Indeed, it’s fair to say that poverty isn’t merely current insufficiency of income or consumption, but also the absence of stable and predictable income or consumption.If you can eat today you’re not poor according to some measures (other measures would correctly include more than just food). But what if there’s a good chance you can’t eat tomorrow? Wouldn’t it be correct to call someone living with such a high risk a person suffering from poverty? People who have enough to eat and who have shelter, but who would starve if they faced unexpected costs or events, such as a health crisis, a flood, a drought, unemployment etc. should be considered poor.

Of course, you might think we’re all living under such risks. Even the wealthiest among us can’t be sure not be become poor tomorrow. Hence we’re all vulnerable, but some are more vulnerable than others. The issue is then how to measure vulnerability and risk. The risk is higher for some than for others, and the consequences when the risk events occur are tougher for some than for others, but how can we know and measure this? We can look at resources and savings for instance. Some people, and some people in some countries, are better armed to deal with risks. They can insure themselves, or their government insures them (unemployment insurance for instance). They may be able to smooth over these events: sell some assets, take a loan… Other people can’t insure themselves, or they live in a country that doesn’t provide public insurance, or they can’t smooth without jeopardizing their future wealth.

This vulnerability is not just a risk for the future; it creates problems here and now. When the risk is perceived – correctly or not – as being very high, then it produces fear, stress and feelings of insecurity. That’s not deprivation or poverty but it sure isn’t pleasant. Those feelings can also be self-fulfilling: people may take irrational precaution measures, counterproductive family planning decisions etc. So poverty as vulnerability is a real problem. Perhaps not as urgent as absolute destitution, but not without importance.

What is Poverty? (2): Different Definitions of Poverty and an Attempt to Make Some Order

This is the World Bank‘s definition of poverty:

Poverty is an income level below some minimum level necessary to meet basic needs. This minimum level is usually called the “poverty line”. What is necessary to satisfy basic needs varies across time and societies. Therefore, poverty lines vary in time and place, and each country uses lines which are appropriate to its level of development, societal norms and values. But the content of the needs is more or less the same everywhere. Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom.

And this is Wikipedia‘s definition:

Poverty is the deprivation of common necessities such as food, clothing, shelter and safe drinking water, all of which determine our quality of life. It may also include the lack of access to opportunities such as education and employment which aid the escape from poverty and/or allow one to enjoy the respect of fellow citizens. According to Mollie Orshansky who developed the poverty measurements used by the U.S. government, “to be poor is to be deprived of those goods and services and pleasures which others around us take for granted”.

The definition agreed by the World Summit on Social Development in Copenhagen in 1995:

Poverty is a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services. It includes a lack of income and productive resources to ensure sustainable livelihoods; hunger and malnutrition; ill health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments and social discrimination and exclusion. It is also characterized by lack of participation in decision making and in civil, social and cultural life. It occurs in all countries: as mass poverty in many developing countries, pockets of poverty amid wealth in developed countries, loss of livelihoods as a result of economic recession, sudden poverty as a result of disaster or conflict, the poverty of low-wage workers, and the utter destitution of people who fall outside family support systems, social institutions and safety nets.

The UN definition:

Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and cloth a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living on marginal or fragile environments, without access to clean water or sanitation.

There’s also the very interesting definition by David Gordon in his paper, “Indicators of Poverty & Hunger“.

Poverty is the absence of any two or more of the following eight basic needs:

  • Food: Body Mass Index must be above 16.
  • Safe drinking water: Water must not come from solely rivers and ponds, and must be available nearby (less than 15 minutes’ walk each way).
  • Sanitation facilities: Toilets or latrines must be accessible in or near the home.
  • Health: Treatment must be received for serious illnesses and pregnancy.
  • Shelter: Homes must have fewer than four people living in each room. Floors must not be made of dirt, mud, or clay.
  • Education: Everyone must attend school or otherwise learn to read.
  • Information: Everyone must have access to newspapers, radios, televisions, computers, or telephones at home.
  • Access to services such as education, health, legal, social, and financial (credit) services.

And there’s the equally interesting but completely different definition by Peter Townsend:

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns and activities.

There are, of course, many other definitions, but if we stick to these examples and summarize them, we can conclude that poverty is the impossibility to meet certain basic needs or the absence of certain necessities or resources:

  • food *
  • clothing *
  • shelter *
  • sanitation *
  • clean water *
  • health **
  • education **
  • work **
  • power **
  • representation **
  • freedom **
  • information **
  • trust in the future (absence of fear) ***
  • access to opportunities and choices ***
  • respect ***
  • self-esteem ***
  • dignity ***
  • inclusion, participation in social and cultural life ***
  • independence ***.

All of these needs and resources are valuable and important in themselves, but I think we can distinguish them according to certain types. For example, you’re not necessarily poor if you’re uneducated. I can think of many uneducated rich people. And all poor people aren’t necessarily without an education. So I would propose the following distinction:

  • Food, clothing, shelter, sanitation and clean water are needs that are directly linked to poverty. You are, by definition, poor if you lack one of these resources (and you may even die). I call these first-level-resources (marked with *).
  • Health, education, work, representation, power, freedom and information, are resources, the lack of which can (but doesn’t have to) make you poor – poor in the sense of not having the first types of resources – and the presence of which is necessary to escape poverty. I call these second-level-resources or supporting resources (marked with **).
  • Respect, self-esteem, dignity, inclusion, participation, trust in the future and the absence of fear, and opportunities, are resources which, like health, education etc., you may lose when you become poor, but which do not really help you to escape poverty. I call these third-level-resources or concomitant resources (marked with ***).

When looking at the different definitions cited above, we also see that poverty has many dimensions:

  • A material dimension (food, clothing etc.)
  • A psychological dimension (respect, self-esteem, trust, fear)
  • A political dimension (power, representation) and
  • A social dimension (education, health, work).

The latter 2 dimensions point to the fact that poverty, while often suffered alone and in solitude, requires social cooperation if it is to be eliminated.

The material, political and social dimensions can, to some extent, be measured, which is necessary if we want to have an idea of the importance of the problem, its evolution over time, and the effectiveness and success of policy measures aimed to combat poverty. One can measure nutrition, housing, income, access to certain services, standard of living, quality of life etc.

The psychological dimension is much more difficult to measure, but no less important. This dimension also shows us that poverty is not just a matter of the current state one is in, and the resources one has or doesn’t have. It is also about vulnerability, about the future, about trust and fear. And it also has a relative side (obvious from the Townsend definition given above), which attaches itself to the problem of our current level of resources (the absolute side): poverty means comparing yourself to others, feeling like a failure, humiliated, shameful etc.