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).
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.