THE NATURE OF MASS POVERTY

JOHN KENNETH GALBRAITH

HARVARD UNIVERSITY PRESS                       1979

PART II

 

Chapter 1: How Poverty Is Now Explained (Cont.)

• The quality and character of government is a function of the income of the people by which it is supported. Poverty is both a cause and a consequence of what Gunnar Myrdal has called the soft state.
• This last point is of much political importance, for on no matter has the effect of uninformed action been more distressing.
• Advice on the economic development in the last 30 years has come extensively from economists and technicians of the rich countries.
• They have seen what has worked well in these lands and, not surprisingly, have advised the same for the poor countries.
• Planned public and private investment, education, agricultural extension, public works, public development of industry, have been so urged.
• All too often these have foundered on the administrative or political inadequacy derived from the poverty they were meant to cure.

That the politics of poverty is different from the politics of affluence has also been hard for politicians of affluent countries to perceive.

• That different standards should apply to rich countries and poor, that sympathy and toleration are more appropriate than condescending hostility, should have been more evident to some of our past representatives in the United Nations than in practice it was.

Next among the causes of poverty are the greatly mentioned unmentionables. One of these is intrinsic ethnic tendency. Englishmen are, or used to be, more industrious than the Irish, the Germans more so than the French or the Poles, the Swiss than the Italians, the Chinese and the Japanese than anyone else.

• It is a singular feature of such ethnic explanation that it is all but exclusively confined to conversation. What is wholly plausible in conversation is wholly impermissible in print.
• Climate or latitude as a cause of poverty is treated with somewhat similar ambiguity.
• In the temperate zone affluence is far more nearly the rule. And within the larger affluent nations there is a recognizable tendency for incomes to decline as one moves from north to south, or in the southern hemisphere from south to north.
• Ellsworth Huntington, in Civilization and Climate, and S.F. Markham in Climate and the Energy of Nations, both associated the moderately cool areas of the globe, which are also subject to change in weather and season, with greater physical activity and initiative.
• The tropics involve an easier life and greater consequent lassitude, and their populations are more subject to endemic disease.
• To such explanations of poverty, modern students of economic development have reacted with extreme caution.
• Explanations of poverty have most often been made by people in the rich countries of the poor. But a lesser current of explanation has run from the poor countries to the rich.
• Of these explanations the legacy of colonialism is the most important. Colonial rule deliberately enforced industrial backwardness for reasons of commercial interest, destroyed self-confidence, created habits of dependency. All this explains the present misfortune.
• What is not explained is why this effect was so diverse – highly adverse in some parts of Africa and Latin America but much less so in other parts of these continents.
• Latin America has now had a century and a half of independence. Is the legacy of colonialism still in force?
• There is also the problem as to how the English-speaking colonies of the British Empire emerged so successfully from this blight and why a centuries-old tradition of independence did little for Ethiopia and not much for Thailand.

A more sophisticated explanation from the Third World, that developed by Raúl Prebisch, holds that poor countries, producers in the main of raw materials and agricultural products, suffer persistently in the terms of their trade with the industrial lands. Agriculture and the materials industries produce more labor than they require – are labor expelling. Manufacturing and like industry produce less labor than they require – are labor-absorbing. Accordingly, the poor countries, being producers of agricultural and primary products, have a persistent surplus of labor. Wages, and therewith prices, are kept down by this surplus of labor and the associated need to expel it to industry. Wages, costs, and prices in the rich, industrialized countries are kept up by the need to absorb labor – draw it from agriculture and other primary production. To these circumstances one might add the effect of differences in market structure – between numerous, different, and weak agricultural procedures and the oligopolistic strength inherent in the positions of General Motors, Shell, DuPont, Nestlé, and the other characteristically powerful oligopolists of the industrial countries. This disparity in power explains and perpetuates the poverty of the poor countries – of the Third World.

• No argument that holds, merely, that producers of elementary foods and raw materials are at a disadvantage, destined to be poor, can be sustained.
• As producers of primary products the United States and Canada are preeminent. New Zealand and Australia are very important.
• It is these countries that account for by far the largest share of the international trade in elementary food and like products.
• Poverty is man’s most powerful and massive affliction. It is the progenitor of much further pain – from hunger and disease on to civil conflict and war itself.
• In and between the poor countries conflict has been widespread and widely lethal, and it continues.
• Of the poverty that induces to conflict, we have no explanations.

We must see if we can find an explanation of poverty – more plausibly, a group of consistent explanations – that serves better than those now so casually advanced. But first we must look a little more closely at the factors, intellectual and social, which shaped our present assumptions as to causes.

Chapter 2: The Political Origins of Error