The Causes of Wealth Inequality (21): The Feedback Loop Between Absolute and Relative Poverty

I’ve come across an interesting and novel argument (novel to me at least) in favor of measuring and doing something about relative poverty, and against an exclusive focus on absolute poverty. Absolute poverty – in other words, the absence of those resources necessary for the fulfillment of basic needs such as nutrition, shelter etc. – remains of course an important concern, but relative poverty is not hogwash: if you lack most of the things an average person in your society takes for granted, then you’ll feel deprived and excluded, ashamed like Adam Smith’s day-laborer who can’t appear in public without a linen shirt,

the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.

Linen shirts aren’t a basic need and one can be quite comfortable without it, but being without it in a certain society at a certain time in history can signal lack of desert. It can diminish the esteem others feel for you, as well as your self-esteem. As a result, you may be excluded from parts of society, and this exclusion may make it more difficult for you to acquire the resources necessary for your basic resources. Hence, your relative poverty leads you into absolute poverty, and your absolute poverty obviously makes your relative poverty worse. And when considering this vicious circle, we’re evidently not talking solely about linen shirts.

Anthropologists and economists have pointed out that festivals, celebrations and communal feasts are not just entertainment. They have an important social role in maintaining the networks that are crucial to coping with poverty and even escaping it. Household budget surveys have often revealed seemingly high expenditures on celebrations and festivals by very poor people. It is also known that clothing can serve an important social role. (source)

People therefore have very good reasons to claim that their well-being does not only depend on the avoidance of absolute deprivation but also on comparisons with others. Comparisons may even cause absolute deprivation.

More on this issue here and here.

Limiting Free Speech (43): The Consequences of Hate Speech

Some of the consequences of hate speech are human rights violations; others are not. Only the former are good reasons to criminalize hate speech and carve out an exception to the right to free speech. Rights can only be limited for the sake of other rights or the rights of others (more here). Let’s go over the different possible consequences of hate speech and see whether or not they imply rights violations.

Hate speech lowers self-esteem in the targets. People who are repeatedly subjected to hateful remarks or jokes about their race, gender, sexual orientation etc. tend to develop feelings of inferiority, stress, fear and depression. Of course, there’s no right not to be depressed, fearful, stressed etc. Therefore, we can say that hate speech should be protected speech when its consequences are limited to these. These are harmful and brutal consequences, but not harmful or brutal enough to be rights violations. We should be concerned about them and try to do something, but this “something” doesn’t include limiting free speech rights. However, people who are extremely intimidated and stressed and who have a deeply negative view of themselves tend to isolate themselves. Isolation isn’t a human rights violation, but couldn’t we argue that willfully isolating people means violating some of their rights? Isolated people don’t speak, assemble, associate etc. In that case, we could argue for limits on the rights of hate mongers.

Hate speech often has even more extreme consequences. Targets of hate speech may feel compelled to leave their homes and move elsewhere, to quit their jobs, and to avoid certain parts of town and public areas. This is a direct violation of their freedom of movement, freedom of residence, right to work and possibly even their right to a certain standard of living. It’s obvious that the free speech rights of the haters should in such cases be deemed less important than the many rights of their victims.

Hate speech can also means invasion of privacy, for example in the case of repeated phone calls, hate mail, or stalking.

Violations of property rights are another possible consequence of hate speech. Hate speech sometimes means vandalism, graffiti (sometimes even inside the homes of the targets), cross burning in someone’s front lawn etc. These cases of hate speech already start to resemble hate crime.

The line between hate speech and hate crime is even thinner when speech is not just hateful but an incitement to violence. For example, hate speech can provoke race riots; it can help hate groups with an existing tendency toward violence to attract new recruits etc. (a larger group will feel more confident to engage in hate violence). And what if hate speech allows hate groups to gain control of (local) government? That would probably lead to discriminating policies and laws.

This overview of possible and actual consequences of hate speech should concern those of us who care about more human rights than just freedom of speech, and who know that different human rights aren’t always in harmony with each other. In some circumstances, some rights need to give way in order to protect other rights. That’s an unfortunate but inevitable consequence of the value pluralism inherent in the system of human rights.

The Causes of Poverty (26): Hereditary Poverty, Another Poverty Trap

For you always have the poor with you, and whenever you wish you can do good to them; but you do not always have Me. Mark 14:7

For the poor will never cease to be in the land; therefore I command you, saying, “You shall freely open your hand to your brother, to your needy and poor in your land”. Deuteronomy 15:11

As a result of having parents who are poor, children

  • receive substandard education because they enroll in substandard schools (if at all)
  • may be forced to quit school early and start working
  • do not receive quality healthcare (because of the costs)
  • are more likely to be obese, with negative consequences for their health
  • have a lower birth weight, something which also has a negative impact on health.

Growing up in poor families has negative effects on children’s education and health, and these effects in turn make it more likely that these children grow up to become poor as well. And their children will go through the same process, and so on. Hence the concept of hereditary poverty.

Just a few more words on the effect of substandard education. The quality of schools (or better the cost of good schools) and the element of child labor aren’t the only factors limiting the education levels of children in poor families. An interesting article in The Economist points to effects discovered by neuroscience. It seems that stress, induced by poverty, lowers memory capacity, and this lowered memory capacity makes it more difficult to learn and to obtain a good education as a means to escape poverty traps. It’s been well known for a while that stress lowers memory capacity (it reduces the volume of the prefrontal cortex and the hippocampus, parts of the brain associated with memory). However, Evans and Schamberg (see the paper here) showed that stress caused by poverty reduces memory capacity. First they showed that poverty is correlated with higher stress, and then that higher stress is correlated with lower memory capacity. Comparisons of the memory capacities of poor and middle class people showed indeed a difference in memory capacity, and this is caused by poverty induced stress rather than other elements of poverty. Poverty causes stress, which reduces memory, which in turn makes it harder to learn, which in turn makes it more difficult to escape a poverty trap. How does poverty cause stress? Well, there’s the obvious cause: financial insecurity. But low self-esteem caused by poverty (including for children in poor families) also seems to contribute. See this paper for instance.

The poor indeed will always be with us. At least if we don’t help them to get out of the traps in which they find themselves.

Income Inequality (11): Why Should We Care?

It’s a fact that many rich countries – rich in terms of total GDP – have a substantially unequal distribution of income; or, to put it in other words, these countries accept that there is huge inequality of wealth between people. It’s also a fact that, in many countries and particularly the U.S., these inequalities in income or wealth have become wider over the last decades.

What’s the problem, you may ask. Well, according to me this inequality poses some problems. But these problems are of relative importance. More important to me is the problem of absolute poverty. Absolute poverty is a lack of certain resources that are necessary to meet certain basic needs. This is not a problem of inequality. People may live in a very unequal society and at the wrong end of inequality, but they may nevertheless have no problem whatsoever meeting their basic needs.

More important as well, in some aspects at least, are the problems posed by other types of inequality. Gender inequality in some countries may be much more of a problem than income inequality (although these different types of inequality are probably connected).

Nevertheless, income inequality engenders some important problems. One is self-esteem. People suffering from relative poverty – i.e. finding themselves on the wrong end of an unequal income distribution – may suffer psychologically and emotionally. It’s also likely that their relative disadvantage isn’t very fair. In other words, it’s probably not solely based on questions of merit and desert. We don’t live in a world of equality of opportunity and level starting conditions. There’s also a correlation between relative and absolute poverty, so we may have to worry about relative poverty as a cause of absolute poverty.

Income inequality can also cause a problem for democracy. The rich can use their financial means to pervert the democratic procedures and to distort the equal influence on which democracy is based. Another way in which income inequality may pervert democracy is its divisiveness. It polarizes societies and it can antagonize regions within countries. None of this is helpful for the adequate functioning of democracy.

More on income inequality here and here.

The Causes of Poverty (9): Poverty Traps

A poverty trap occurs when poverty has effects which act as causes of poverty, creating a vicious circle in which poverty engenders more poverty, a circle of cumulative causation leading to a downward spiral of ever more extreme poverty.

Poverty traps or poverty circles can be of different kinds: individual, social, national, international…

1. Individual poverty traps

A poverty trap can be limited to the purely individual: for example, a person being discouraged by his or her situation or misfortune, and thereby sinking deeper into misfortune because of inactivity.

2. Regional poverty traps

The poverty trap may also have a regional aspect: some parts of the country or the population may be poor because they are isolated geographically from the rest of the population and the main centres of wealth and prosperity.

Profitable business opportunities may be few, and thus productive employment lacking, owing to poor transport and communication links with those centres. But the low level of economic activity in the isolated region means that transport services are inadequate and that improved transport infrastructure cannot be economically justified, thus perpetuating the isolation. (source)

3. Racial/ethnic poverty traps

The isolation may also be racial or ethnic. This may harm their self-esteem or their sense of responsibility for their own advancement. The responsibility for their fate is, not without reason, projected on others, but this can become a fetish creating passivity and hence more poverty.

4. Social poverty traps

Poor people, because they tend to be more often sick, hungry and weak, don’t manage to get well paid jobs or – if they are independent producers – tend to produce less. As a result, they have less money, less food, and limited access to health care. And because of this, they get even more hungry, weak or sick, and the circle starts again.

Another example: an individual is poor because his or her parents are poor; because of this, a good education becomes problematic – the children may have to work instead of attending school; without a good education the individual does not acquire the tools and capabilities to escape poverty, may succumb to the temptation of crime, and as a result sinks deeper into poverty.

5. National poverty traps

Low income leads to low savings; low savings lead to low investment; low investment leads to low productivity and low incomes. Poverty leads to environmental degradation, which in turn undermines the assets of the poor and exacerbates poverty. Poverty can lead to violence and conflict, and the associated destruction of physical, human, social and organizational capital in turn causes poverty to intensify. (source)

6. International poverty traps

A poor country may have to rely on its natural resources for its exports and hard currency. As a result, however, other and more stable sectors of the economy are neglected and the resource curse may set in, creating poverty and forcing the other sectors even more to the background.

Some countries may find that they are regionally isolated from the global economic centres, much like some social groups can be regionally isolated within a country (see above). Their import markets are too far away from the main exporters, or too difficult to reach because of the poverty of the country and the resulting lack of investments in infrastructure and transport facilities.

Needless to say that the different kinds of poverty traps can exacerbate each other, and thereby creating a “poverty trap of poverty traps”, a vicious circle in which different poverty traps reinforce each other. This sounds quite apocalyptic, but fortunately seems to be only a theoretical possibility because globally poverty is actually on the retreat, but only on average. Many countries, many social groups and many individuals are still terribly poor, and the poverty traps are one reason.