The Story of Man Part 3

THE CREATION OF WORLD POVERTY

TERESA HAYTER

Pluto Press in association with Third World First

Second edition 1990

PART III

 

Chapter 2: Extremes of Poverty and Wealth

There is no lack of information on the extreme forms of deprivation which the majority of people in this world now suffer. Most but not all of these people live in Asia, Africa and Latin America. There are, in addition, glaring inequalities in wealth between different parts of the world and also within individual countries. The ‘widening gap’ between ‘developed’ and ‘developing’ countries has become a cliché. There are also a good many indications, less well documented perhaps, that the situation of the very poor, especially in rural areas in underdeveloped countries, is becoming worse in absolute as well as in relative terms, mainly because distribution within countries is becoming more unequal.

According to the World Bank’s 1980 World Development Report, the average annual income per head of 18 industrialised countries in 1950 was $3,841; that of the 38 countries with lowest incomes was $164, or about one twenty-third. In 1980 the estimated average income of the former was $9,684; the income per head of the latter was $245, or barely one fortieth. The 18 industrialised countries include the United States, Canada, Australia, New Zealand and Japan as well as Western Europe. From statistics elsewhere in the World Bank’s Report, it is possible to calculate that in 1979 these countries, with about 16% of the population of the world, received about 63% of its income. The others, which include the ‘low income’ countries and also some ‘middle income’ countries, the oil exporting countries, and what the World Bank calls the ‘centrally planned economies’, thus have 84% of the population and only 37% of the income.  

• The simple fact is that most people in underdeveloped countries do not have enough to eat.
• People in the so-called developed countries commonly eat too much; and some live in extreme luxury.
• The yachts and palaces are not confined to the inhabitants of the First World. Some people in underdeveloped countries are extremely rich.
• The distribution of income in underdeveloped countries is probably on the whole more unequal than that in the industrialized countries, in which considerable deprivation nevertheless exists, in spite of their overall wealth.
• The 1980 World Development Report gives some tentative figures on income distribution within countries. In Brazil the poorest fifth of the population apparently get 2% of the income, and the richest fifth get 67%; for Malaysia the corresponding figures were 3% and 57%; for India 7% and 49%; and for Britain 65% and 39%.
• The average adult literacy rate in 1975 in the 18 most industrialized countries was 99%; in the 38 ‘low income’ countries it was estimated to be 38%.
• Average life expectancy in 1978 was 74 years in the former group and 50 years in the latter.
• About 800 million people, or almost 40% of the population of the so-called developing countries, who live in ‘absolute poverty’: ‘a condition of life so characterized by malnutrition, illiteracy and disease as to be beneath any reasonable definition of human decency.’
• In some countries one child in four dies before the age of five.

 

Chapter 3: Conventional Explanations for Poverty

• Elaboration of these facts can be found in most textbooks on underdevelopment. But they usually remain unexplained; or the explanations, if given at all, are inadequate.
• Explanations are attempted to show why the peoples of underdeveloped countries are ‘poor’, but the existence of their poverty is not related to the wealth accumulated elsewhere.
• Attempts to provide historical explanations are dismissed as irrelevant: ‘focusing on questions of historical guilt will not provide answers to the crucial problem of self-responsibility’, says the Brandt Report.

The explanations such as they are, tend to be based on what might tactfully be called a Eurocentric view of the world, which is itself a product of historical circumstances, and of colonial mythology in particular. Europeans, who began by being impressed and indeed overawed by what they found in civilizations sometimes more sophisticated than their own, gradually built up theories of racial superiority. Especially from the 19^th century onwards, they felt the need to justify to themselves their domination of colonial peoples, and in particular the institution of slavery. The ‘natives’, they maintained, were lazy, stupid, barely human. An Englishman in 1820 found the cause of Indian poverty ‘in a natural debility of mind, and in an entire aversion to labour’. By the 19^th century, says V.G. Kierman in The Lords of Human Kind, ‘the whiteman had worked himself into a high state of self conceit. White men were willing to justify everything to themselves in the cause of bringing ‘civilisation’ to the natives.

• The British Opium War to force the Chinese authorities to allow the importation of opium was justified by John Quincy Adams, in a public lecture in 1842.
• Europeans thought that it must be a blessing for African slaves to be provided with masters and regular work and consoled themselves with the idea that ‘Negroes have far duller nerves and are less susceptible to pain than Europeans.’
• Europeans convinced themselves that they were the bearers of order, civilization and Christian principles to the benighted natives.

‘I contend,’ said Cecil Rhodes, one of the biggest empire-builders, ‘that we are the first race in the world, and that the more of the world we inhabit the better it is for the human race. If there be a God, I think what he would like me to do is to paint as much of the map of Africa British red as possible.’

• Such ideas survive and permeate our consciousness today.

Europeans are still, of course, convinced that they know best. ‘Aid’ agencies are eager, if not arrogant, with their advice to poor countries on how to ‘catch up’ and how to overcome ‘backwardness’, and the development expert business has developed into a massive gravy train for the experts. Multinational companies sell themselves as the purveyors of technology and efficiency; ‘even if local governments were strong and assistance to them plentiful,’ says Herbert C. Cornuelle in the 1968 Annual Report of the United Fruit Company, ‘the fact is that the enormous complexities of the development process require abilities and attributes which are as natural to the multinational corporation as they are unnatural to government.’

• Failure to develop is put down to ‘lack of entrepreneurs’. Writers on the economics of underdeveloped, or ‘backward’, countries still argue seriously that people in these countries are poor because they live in hot climates and imply that this makes them lazy and, therefore, lacking in enterprise.
• Another ‘explanation’ for the extreme poverty of underdeveloped countries is ‘lack of capital’. This, like the ‘low level equilibrium trap’ of neo-classical economics jargon, amounts to saying that they are poor because they are poor.
• But this begs the question of what constitutes capital. It also fails to answer the question why developed countries have the ‘capital’ or indeed whether, in any but the narrow sense of having access to it and control over it, they have it at all.
• Foreign businesses commonly raise around 80% of their capital in underdeveloped countries while at the same time remitting their profits abroad.
• Because the distribution of income in underdeveloped countries is so unequal, much of the capital which could otherwise be available for investment is squandered in extravagant living, property speculation and Swiss bank accounts.
• The British colonies were forced to accumulate, between 1945 and 1961, sterling balances of 1 billion pounds, which constituted a direct export of capital to support the British standard of living, the value of the pound and Britain’s ability to repay its war debts.

Then there is the population theory. People in underdeveloped countries are said to be poor because their populations have been increasing too fast. This, in turn, is said to be the result of superior medical techniques introduced by Europeans. These have, of course, produced undeniable benefits. They have been relatively recent. The first irruption of Europeans particularly into North and South America, decimated many local populations, partly through exhaustion in mines and plantations, partly by introducing European disease, and partly by outright massacre. As late as the 19^th century, the British exterminated the population of Tasmania. And during the period of the European slave trade the population of Africa declined substantially, so much so that some writers ascribe the lack of development in Africa during this period to the decline of its population and the shortage, in particular, of able-bodied men and women. Since then, the population of the world has been increasing dramatically. It is now about 4.3 billion; over the next two decades it is likely to increase by nearly two billion, which is more than the total population at the beginning of the 20^th century.

• The current alarms about populations are filled with Malthusian over-tones. It is too easy to ascribe poverty to natural, unchangeable causes and then to say that nothing can be done about it.

It is not clear how much rapid increases in population do, in fact, add to the difficulties in providing reasonable standards of living. In the early stages of the industrial revolution in Europe, population was increasing quite rapidly. Some highly industrialized countries have population densities much greater than those in most countries where there are extremes of poverty. Many calculations show that food supplies in the world as a whole are more than adequate, actually and potentially, to feed a population much larger than the existing population, although as Susan George in her book How the Other Half Dies puts it, it would obviously ‘not be ecologically desirable to decimate the last natural forest in order to provide arable land and food for tens of billions of people.’

• It is the case that in many countries with the greatest problems of malnutrition overall food supplies have been increasing faster than the increase in population.
• A study by Keith Griffin and Ajit Kumar Ghose suggests that the most likely explanation for probably increasing impoverishment in rural areas is not to be found in population increases, but rather in an increasingly unequal distribution of income.
• Historically birth rates have tended to decline with improvements in living standards, as they have in Europe and North America.
• It is perhaps the populations of developed countries that might need controlling since, according to some estimates, they and their animals consume over half of the available world supply of food grains.
• Feeding grain to animals is a wasteful way of producing proteins for humans to eat.

A quotation from Rene Dumont is one possible epitaph on the population argument:

“The rich white man, with his overconsumption of meat and his lack of generosity for poor people, behaves like a veritable cannibal – an indirect cannibal. By consuming meat, which wastes the grain that could have saved them, last year we ate the children of the Sahel, Ethiopia and Bangladesh. And we continue to eat them this year with undiminished appetite.”

But this is part of a wider argument, which has to do with the question whether, rather than saying that the poor should be blamed for their poverty, it might be truer to say that the problems lie with the rich, those who expropriate the fruits of the labour of the poor.

Chapter 4: The Past is not Irrelevant