THE NATURE OF MASS POVERTY

JOHN KENNETH GALBRAITH

HARVARD UNIVERSITY PRESS                       1979

PART III

 

Chapter 2: The Political Origins of Error

Until World War II, there was relatively little serious discussion of the causes of mass poverty, and likewise very little of its remedy. As the colonial world had no claim to self-government, so it had no great claim to the consideration of its economic and social problems. Independence was a far more preoccupying goal than economic development. National leaders such as Mahatma Gandhi and Jawaharlal Nehru were largely content to assume that once independence was achieved, all else would follow. And poverty, as always, served to deny people a voice. The poor and illiterate are usually and conveniently silent.

• Lenin saw the poverty of India, China, and Africa as the counterpart of the affluence of the advanced industrial countries.
• People in the developed lands, including trade union members, rode on the backs of the impoverished masses of the colonial or dependent world.
• Malthus spoke to the impoverishing pressure of population growth, but it was with Europe that he was primarily concerned.

At the beginning of his new term in 1949, President Harry S Truman committed the United States to his now famous Point IV, a promise of a bold program to place the technical resources and achievements of the United States at the service of the less fortunate people of the world. It was a step in direct decent from the Marshall Plan, which by then was showing great promise in the restoration of European economic life. There was one improvement; technical assistance, as distinct from capital, seemed to promise progress at a much lower price. In the early weeks of 1949, I served on a State Department committee which sought to give content to the President’s promise, for, as often before and since, the rhetoric of intention had run ahead of the design for action. Rarely can deliberations have been more unstructured. None of the concerned officials or outside experts had strong views as to the needs of the poor countries or what one or another form of technical assistance would accomplish. There was very little literature to which we could refer. The tactful euphemisms for poverty – less developed countries, LDCs, developing countries, the Third World – had not been invented. One member of the committee, Paul H. Nitze, later to win distinction as an influential and predictable Cold Warrior, was moved to argue that little if any substance could be given to the President’s proposal – there was no practical way of ameliorating the poverty of the poor countries by public action. More routine officials agreed with as much haste as was seemly. Had it not been for the firmness of the presidential commitment and even more the spontaneity of the resulting public response, the negative men would, I then felt, have carried the day.

•  It was a vivid lesson on the emptiness of this economic box. There was also ample evidence to the same effect in the universities.
• I had previously given thought to the considerable number of students coming to Harvard from the poor countries under scholarship, who were now studying the sophisticated models applicable, if at all, only to the United States and other advanced industrial countries.
• I began instruction in the economics of poverty and economic development at Harvard, in company with some talented younger associates.
• Aid to the poor countries by the United States, negligible in 1950, was in excess of $5.5 billion in 1965.
• The Ford Foundation contributed well over a billion dollars between 1950 and 1975, and the Rockefeller, Carnegie, and some CIA-supported foundations added smaller amounts.
• No economic subject more quickly captured the attention of so many as the rescue of the people of the poor countries from their poverty.
• The years from 1950 to 1965 were also ones of major economic success and self-approval in the United States and the other industrial countries.
• There was a belief/instinct that if the poor countries remained in wretched and painful deprivation, the rich countries would not be safe in their comfortable affluence.
• The rich countries were not strongly attracted by the idea of giving up their wealth. Therefore the poor must be made less poor.
• More compelling than this dialectic was the fear of Communism and that if poor countries were not rescued from their poverty, the Communists would take over.
• Failure to understand the nature of mass poverty and, more precisely, a misunderstanding of its relation to Communist opportunity or the limits thereof were central in the greatest disaster in American foreign policy.
• The explosion of concern over the condition of the poor nations called for agreement on the causes of poverty. If there was to be a remedy, there had to be a cause. If it couldn’t be identified, it would have to be invented or assumed.
• The imperatives of action specified the causes that were not acceptable, and they selected the causes that were.
• The most obvious of the possible causes of poverty that had to be excluded was the economic system. The exigencies of policy also excluded climate and ethnic character.
• The pressure of population on land resources and food supply could not be a cause of poverty, because the remedy was birth control and this risked alienation of the Catholics of the developed world.
• In contrast, the circular causes of poverty – those where cause and result are interchangeable – and the related actions were often agreeable to those urging them.
• Professional educators readily attributed poverty to the absence of an educational system. Former civil servants attributed it to poor public administration.
• Potential teachers and administrators from the poor country could be brought to the United States or Europe for training. This remedy also recommended itself because it was and remains greatly popular with those who hope to be selected.
• A very large number of those so prepared do not return more than momentarily to their own countries. But it is not the result that those emphasizing education had in mind.
• The rich countries had technical skills in abundance. So the cause of mass poverty was seen as technical backwardness in methods of production.
• Few improvements in production methods are possible without capital investment. So shortage of capital also became a cause of poverty and its supply a remedy.
• In the rich countries capital investment and technical innovation are related to rising real income. There is a powerful temptation to believe that such experience is of universal application.
• Both public officials and scholars brought to the field by the expansion of interest after 1950 had a tendency to allow faith to be a substitute for critical judgment.
• Judgment is more readily made subordinate to self-interest than we commonly imagine.
• In the countries of mass poverty the deprivation remains extensively unabated and unchanged.
• Few will resist the thought that a further, maybe different, look at the causes of mass poverty could be in order.

 

Chapter 3: The Equilibrium of Poverty