causes of income inequality, causes of poverty, economics, equality, poverty

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

rich man poor man

(source unknown)

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 and perhaps even primordial concern, but relative poverty has always been an interesting notion to many of us: 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-labourer 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.

rich man's horse, and poor man's horse

rich man's horse, and poor man's horse

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.

Standard

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

  1. Pingback: Human Rights Facts (71): Poverty and Obesity, Ctd. | P.a.p.-Blog, Human Rights Etc.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s