If you actually want to remove poverty, look beyond income.
Being poor is not just a situation of “low income” or “low consumption”. There is much more to poverty than just lack of income. People talk of poverty in terms of poverty line – the underlying assumption is that if a person doesn’t have certain minimum income he will not be able to meet his basic necessities of life such as sufficient food, clothing and shelter. If he lacks skills, education, good health, and economic opportunities his income will be always constrained. It will only ensure that his living standard remains where it is. Public schemes providing food or health services are good; they at least don’t allow the poor to sink further into deeper poverty. However, by design they can’t remove poverty.
This is the typical way of looking at and doing something about poverty. It, however, can’t be understood fully through the goggles of income alone. Unfortunately, there is no direct correlation between per capita income growth of a country and people’s well being. For example, Sri Lanka and the Indian state of Kerala have low per capita GDP but have higher life expectancies and literacy rates than richer countries like Brazil and South Africa. Likewise, the African Americans in the US have lower life expectancy than China or Kerala despite higher average income. The message is clear: there are other factors that contribute to the well being of people besides income.
First, Understand the Nature of Poverty
Poverty is a state of deprivation; being deprived of sufficient food and nutrition, to say the least. It is when you can’t have proper shelter or can’t seek medical help when needed. It is a state of constant struggle just for survival without sufficient knowledge, education or job skills. At the social level, the poor get excluded from the social processes and become marginalized. Putting together their constant struggle against multiple deprivations, social exclusion and political marginalization, it is a situation of perpetual compromise, suffering and exploitation. Not surprising the endless hardship creates the mindset of defeatism, pessimism, loss of self worth and confidence.
Therefore, poverty is a state of hardship coming from limited choices. In other words, it is a state of badly restricted freedom. So, poverty removal must necessarily involve eliminating the various factors confining the people into restricted living. In nutshell, poverty is a state of badly restricted human life and absolute poverty means absolute lack of freedom. For anti-poverty programs to be effective they must expand poor people’s freedom.
Development is Expansion of Freedom
Poverty is clearly a developmental issue; not an economic growth issue alone. Economic growth is certainly an important aspect of development. However, it is wrong to see it as an end in itself. People are not robots; they are thinking, feeling and emotional beings. They must be the focus of development, not merely the economic growth.
The 1998 Nobel laureate Amartya Sen has suggested that development is the enhancement of freedoms so that people can lead lives that they value. So, development is the process of expanding human freedom. It also means the removal of hurdles restricting freedom such as poverty; lack of economic opportunities; discrimination of all types including gender, racial or religious; and restrictive or unfair state policies. Sen asserts that “freedom” is both the principal means and the primary end of development. Freedom is the only acceptable evaluation of human progress, so it should be the central element of development.
He also asserts that “development” is actually enhanced by democracy and the promotion of human rights – notably freedom of the press, speech, and assembly – because they foster clean, honest and accountable governance.
Poverty is Lack of Freedom
Poor people are basically deprived in different freedoms, leading to their loss in capabilities. Therefore, for Amartya Sen “capability deprivation” is a more fundamental and superior measure of poverty than merely lowness of income. Having freedom allows people to expand their capabilities.
Clearly, what they are capable of doing (achieving, creating) is influenced by the “economic opportunities, political liberties, and social powers; status of health and education; and by the level of motivation and initiatives” they have. Therefore, all these factors become important in “development” of poor people – poverty removal.
Take, for instance, Blacks in the US or the Scheduled Castes (lowest caste) in India. The prime reason of rather high poverty in them is the social discrimination due to their race or caste which lowers their degrees of freedom relative to rest of the society. They need better assimilation in the mainstream society. This battle needs to be fought on the social plain, not on the economic platform.
Being hungry or undernourished reduces the personal capacities of people. It degrades their performance and makes them less competitive. If the state can offer food security net through suitable schemes, it will make them more capable to improve their living standard. Similarly education is an important factor, particularly for the poor. Having good education significantly raises their potential and opens many degrees of freedom. In this age of knowledge, lack of education (like a computer for a school kid) can severely handicap people.
When a state is spending in such public programs for the poor, it is in fact investment in the human capital. These are opposed by traditional economists as unproductive use of public fund. They are badly misplaced and short-termists who can’t see beyond the current profit-loss account. Their corporate governance model is unfortunately not suitable for governing societies and nations because they have several different dimensions.
Impact of Sen’s Theory
The launch of the Human Development Index (HDI) in the 1990 by the UNDP was a major shift away from measuring living standard by per capita GDP of the economists. It was recognition of the long observed fact that per capita income is grossly inadequate as a measure of people’s well being which has several dimensions. The HDI was a composite yet simple enough single parameter to measure and compare progress of societies. It combined three basic dimensions of human development: the nutrition and health status was judged by life expectancy at birth; education and knowledge was probed by the adult literacy rate and the school enrollment rate; and the standard of living was gathered from the per capita GDP.
In 1997 the UNDP came up with a poverty (lack of human development) measure, the Human Poverty Index (HPI). In 2010 it was replaced by a more extensive Multidimensional Poverty Index (MPI) which probed poverty under the microscope of 10 different measures of human well being. This is a wonderful tool for the policymakers; they can now design more effective programs and accurately monitor the progress as well.
Sen’s ideas on development and poverty point to a more effective way of enhancing well being of the societies. They show the direction of course correction for the economically rich nations also. Development as mere economic growth is too narrow a concept where people are reduced to mere tools and consumers to achieve GDP growth. On the contrary, as Sen points out, development should put people at the center of attention and enhance their capabilities and freedom so that they can take care of their lives in the manner they wanted. Poverty must be seen as deprivation of capabilities which is more basic than income deprivation. Clearly, development and poverty are both multidimensional.
Don’t forget to explore our detailed Poverty Report.