November 19, 2017

Why development creates poverty

Development, writes Edward Goldsmith, “is above all the gradual disembedding from their social context of all such functions that were previously provided for free, their monetization and takeover by the state and the corporations . . .” The certain outcome: wealth for the few, poverty for the many.

Published in The Ecologist Vol. 32 No. 6, July–August 2001, under the title “Poverty, the child of progress”.

Economic development, in spite of its devastating effects on societies and the environment, remains the overriding goal of international agencies, national governments, and the transnational corporations that are of course its main promoters and beneficiaries. This is justified on the grounds that only development and of course the global free trade that fuels it can eradicate poverty.

Hardly anyone in a position of authority today seems willing to question this thesis, even though it is backed by neither any empirical nor any serious theoretical evidence.

Consider for a start that since shortly after World War II when world trade and economic development really got under way, the former has increased by 19 times and the latter by no less than six times – an unprecedented performance. It seems evident that if these processes really provide the answer to world poverty, then it should by now have been reduced to little more than a faint memory of our barbaric and underdeveloped past.

However, the opposite is true. In Indonesia poverty has increased by 50 percent since 1997, in South Korea it has doubled during the same period, in Russia, it rose from 2.9 percent to 32.7 percent between 1966 and 1998 alone. [1]

As the International Labour Organization (ILO) notes in its 2000 Report, much the same thing has happened throughout South America as well as the Caribbean. What is particularly shocking is that according to the ILO the percentage of global income received by the poorest 20 percent of the population between the years 1960 and 1997 fell from 2.3 percent to 1 percent, i.e. by more than half, while in just the last five years the number of people living in extreme poverty around the world, has increased by 200 million, mainly in sub-Saharan Africa, Central Asia, Eastern Europe, and South-East Asia. [2]

More strikingly poverty has also increased in the rich industrial world, where the rate of unemployment between the years 1997 and 1998 has more than doubled, rising from 2.8 percent to 6.3 percent for men and from 3.2 percent to 7.4 percent for women.3 Significantly long-term unemployment, defined as unemployment lasting one year or more, has in many countries gone up much faster than total unemployment.

In Sweden for instance it has risen from 5.5 percent of total unemployment in 1980 to 20.6 percent in 1997. [4] According to John Carvel, Social Affairs Editor of The Guardian, 37 million people are now unemployed in the rich industrial countries, a 100 million are homeless, and nearly 200 million have a life expectancy of less than 60 years.

Even in the UK, the country that invented industry and that dominated the economic scene for decades, the number of adults in households with less than half the average income (which is the preferred measure of poverty used in that country today) – has increased by a million above the level in the early 1990s and is now more than double the number in the early 1980s. [5]

Keith Marsden’s article “The Globalisation Debate – Why Free Trade Does Benefit the Poor”, published in last Autumn’s Issue of this journal, suggests that claims of Globalized Free Trade having harmed the poor are “sweeping assertions … not supported by independent fact” Having contacted Mr. M Keats of the ILO, who reviewed both Marsden and my quoted figures, I have been assured that those appearing in this article are the most up-to-date available, whereas Mr. Marsden’s are “weirdly” taken from 1998. He also commented that Mr. Marsden uses un-named groupings of countries, and his commentary was “rather vague”.

To reasonable people these facts should be enough to discredit the thesis that development provides the means, let alone the only means of eradicating poverty. But for the promoters of development it merely indicates of course that development has not proceeded fast enough. They are simply not psychologically capable of questioning what is the fundamental tenet of the secular religion of today.

Vinod Thomas, Vice President of the World Bank’s Education arm states that “to reverse this trend economic growth is crucial”. He takes South East Asia to be the model.

“If sub-Saharan Africa had followed that model in the past three decades, living standards would have quadrupled instead of barely standing still, and poverty would have fallen not risen.” [6]

He does not mention, of course, that poverty has also increased in South-East Asia during the same period, only the élite having profited, and temporarily at that, from an economic boom that was little more than a bubble, and one that has now been well and truly pricked.

Significantly poverty is not seen as an isolated problem, but is the cause of all our other problems. Thus the Food and Agricultural Organization of the United Nations (FAO) insists that if people are hungry it is that they are poor and cannot afford to buy the food they need, while the World Health Organization (WHO) also assures us that if people are disease-ridden and die young it is that they are poor and cannot afford the medicines that would make them healthy. The answer to both hunger and disease is thereby the eradication of poverty, hence more development.

Thus poverty is equated with ‘underdevelopment’, [7] which means that, by definition, only development can eradicate it. In the economic conditions we live in today this is probably true, but what we must realize is that by defining poverty as we do, in purely monetary terms, it is assumed that money has always been, and always must be a requisite – as it clearly is today – for satisfying real needs.

If we believe this, however, it is that we are made to look at the growing problems that confront us today entirely in the light of a short and totally aberrant experience of the industrial society we live in, that we have been taught to regard as the norm.

What then is development? Why does it create poverty?

What we tend to forget is that in the traditional families and communities in which we lived during perhaps 95 percent of our tenancy of this planet, settlements were designed, houses built, food produced, prepared and distributed, children reared and educated, the old and the sick cared for, religious ceremonies organized and performed, government functions pursued – all entirely for free.

This was possible, as Karl Polanyi, the great economic historian, pointed out, because in such societies “the economy was embedded in social relations”. [7] All the functions that we would regard today as economic were fulfilled for social rather than economic reasons, mainly to satisfy kinship obligations and to achieve social prestige.

Development changes all this. It is above all the gradual disembedding from their social context of all such functions that were previously provided for free, their monetization and takeover by the state and the corporations. We have been taught to see this process as but one of the acceptable costs of progress, that is only because few seem to have considered its real implications.

The first is that one can predict in advance that a large section of society will simply not be able to acquire the money to pay for the food, shelter, and other necessities of life, that have been monetized and that were previously obtained for free by the normal functioning of families and communities. On these grounds alone development can only create a large number of poor and deprived people, and their numbers can only increase as development proceeds and more so still as it becomes globalized.

Of course, we have been trained to believe that pre-industrial people who lived in non-money economies were poor – but this is simply not true. These people had a rich cultural and ceremonial life, and on the whole they lived in a relatively unspoilt environment. They were also usually well fed, and perfectly healthy – that is until their cultural patterns were disrupted by colonization, and later by economic development, and their natural environment destroyed.

Early travellers in distant lands had always noted how healthy and well fed were the traditional people whom they visited. Thus Mungo Park, in his Travels in Africa, tells us that the Gambia River abounds with fish and that nature “with a liberal hand” has bestowed on the inhabitants of the area “the blessings of fertility and abundance”. [8]

Poncet and Brevedent, two 18th century French travellers, noted that the Gezira area of the Sudan now occupied by eroded cotton fields, was once covered in forests and “fruitful and well-cultivated plains”, and that it was called God’s Country (Belad-Allah) “by reason of its great plenty”. [9]

Nor is there any reason to suppose that the Australian aborigines, who are seen today as the poorest of the poor, were ever short of food. Sir George Grey, Governor General of New Zealand in the early part of the 19th century, spent time among them and insisted that he always found the greatest abundance in their huts. Many modern anthropologists have noted how healthy and well-fed were tribal peoples, with whom they lived, and how their diet and state of health deteriorated as soon as they adopted the life-style of their colonisers.

R. R. Thaman of the University of the South Pacific, for instance, points out that prior to European contact, the islanders of Melanesia, Polynesia, and Micronesia, generally had abundant food resources, and were almost universally reported to be a sturdy, healthy, people of superior physical type. Even those atolls and raised coral limestone islands where food was relatively scarce

“had abundant bread-fruit, coconuts, pandanus, often taro, a variety of edible wild plants and rich marine resources. Recent years, however, have seen a dramatic deterioration in the health of Pacific islanders. The growing trend towards eating a western-style diet has brought in its wake a rise in the incidence of the so-called ‘diseases of civilization’, notably heart disease, dental caries and diabetes – diseases that were almost unknown a few decades ago. In Micronesia the number of people who were treated for heart disease at local hospitals tripled between 1958 and 1972 – a rise which is best explained by changes in diet and by the stress of modern living.” [10]

Countless other studies in the Pacific islands and in all other parts of the world paint the same picture. [11]

In other words, tribal and other traditional people did not require economic development and the money that it provides in order to be healthy and well-fed. Most significantly, the World Bank’s 2001 edition of World Development Indicators (WDI) shows Cuba – the only developing country with the exception of North Korea, which since 1960 has received no World Bank loans, and has had but “anaemic” economic growth, as topping all other poor countries in health and education statistics.

Even Joe Ritzen, the Bank’s Vice President for development policy, cannot help being impressed. He notes that the Cuban system “is extremely productive in social areas”, but he cannot help commenting critically that it does “not give people opportunities for prosperity”. But what, one might ask, is the use of prosperity if it has “a negative effect in social areas”? [12]

What is important is that these pre-industrial people did not feel poor. When Laurens van der Post wanted to give a present to Bushman friends with whom he had sojourned, as a token of his gratitude for their hospitality, he simply did not know what to give them:

“We were humiliated by the realization of how little there was we could give to the Bushmen. Almost everything seemed likely to make his life more difficult for him, by adding to the litter and weight of their daily round. They themselves have practically no possessions: a loin strap, a skin blanket and a leather satchel. There is nothing that they could not assemble in one minute, wrap up in their baskets and carry on their shoulders for a journey of a thousand miles. They had no sense of possession.” [13]

To label them as poor completely misses the point, for Bushmen, living in their natural environment, do not feel in any way deprived by their lack of material goods.

Helena Norberg-Hodge, who has spent much of her time over the last thirty years in Ladakh, a Tibetan society high up in the Himalayas that is politically part of India, and which until recently was largely cut off from the outside world, fully agrees. When she first went to Ladakh in the middle 1950s, she tells how a young Ladakhi made her visit his distant village called Hemis Shukpachan. She was impressed by the beauty and spaciousness of the homes there.

“But where do the poor live?” she asked. He was taken aback by this question. When she explained what she meant by poor people he shook his head. “We don’t have anybody like that”, he answered.

Today, all that has changed. Ladakhis throng around the tourists asking for money. “We are so poor in Ladakh”, they tell them pitifully. [14]

They have indeed been pauperised by the recent economic development that had already devastated their society and its natural environment and created the many new artificial ‘needs’ which, for most people, can never conceivably be satisfied.

They were even different at the court of the Manchu emperors of China, before that country had been subjected to Western influence. Thus the Emperor Ch’ien Lung was not the least impressed by the gift of manufactured goods presented to him by the British emissaries of King George III who sought to establish diplomatic links with his country. He rejected the British request and sent a letter to King George
that concluded with the following words:

“Swaying the wide world, I have but one aim in view, namely to maintain a perfect governance and to fulfil the duties of the State. Strange and costly objects do not interest me. . . As your Ambassador can see for himself, we possess all things. I set no value on objects strange or ingenious, and have no use for your country’s manufactures.” [15]

This attitude could not be more foreign to us. Our appetite for material goods and technological devices seems insatiable. Indeed, it is in terms of our access to them that our wealth, indeed our welfare, is normally gauged. It is undoubtedly true that today we need a lot of material goods and technological devices, but this is not because we have an intrinsic need for them but because, in the aberrant conditions in which we live many are required for the purpose of satisfying biological, social, spiritual, and aesthetic needs that in normal conditions were once satisfied for free.

No word for poverty

Serge Latouche, who has worked for decades among the mushrooming slums of the cities of West Africa, tells us in his enlightening book L’Autre Afrique that “there is not even a word for poverty in the principal African languages” – at least in the economic sense of the term, which he sees as a Western invention. The closest are the words that denote an ‘orphan’. [16] Marshall Sahlins makes the same point in his much quoted paper “The Original Affluent Society”:

“The world’s most primitive people have few possessions, but they are not poor. Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all it is a relation between people. Poverty is a social status. As such it is the invention of civilization.” [17]

In this way poverty is not associated with a lack of money, but rather with the absence of social support. For Latouche the very idea of poverty is only conceivable in an individualistic society, such as that which development necessarily gives rise to. It refers above all to the powerlessness of the social isolate.

“In a non-individualistic society, the group as a whole is neither rich or poor.” [18]

Julius Nyerere said much the same thing. For him,

“in an African society . . . Nobody starved, either of food or human dignity, because he lacked personal wealth; he could depend on the wealth possessed by the community of which he was a member.” [19]

Many of those who are economically poor in the modern world of today are also those with minimal family support. These include the increasing number of old people who have been largely abandoned by their families and have become dependent on a miserable state pension that is hardly sufficient to keep body and soul together.

They also include many single mothers and their children. As early as 1974 Bronfenbrenner, the well-known child psychologist, pointed out that of “the number of children in the USA living in poverty under the age of six, 45 percent of them were members of single parent households”. [20]

In Australia, Canada, Germany, Luxemburg, Netherlands, Norway and the USA, poverty rates for households headed by a single mother are at least three times higher than for two-parent households. Since then the situation has become very much worse, which is totally predictable as economic development, by its very nature, necessarily leads to social disintegration and atomisation.

In the USA, for instance, the number of households headed by a single female has increased by two and a half times, in the UK by two and a third times, and in Canada they have nearly doubled. [21] Not surprisingly child poverty in the OECD countries in general has substantially increased during the same period. Between the years 1972 and 1994 for instance, it has doubled in Germany and trebled in the UK. [22]

Poverty is a social isolate and hence of the vast bulk of the people in the socially atomised, non-societies that economic development brings into being, are not only biological or material but has also an important psychological component, one that was referred to by the French sociologist Emile Durkheim as “anomie” – a term that has been adopted by other distinguished sociologists such as Robert McIver. The latter sees people as suffering from anomie “when their lives are empty and purposeless, and deprived of meaningful human relations”. [23]

It is in the slums of the modern industrial cities that social disintegration and the social deprivation or anomie that it gives rise to is most advanced, and this gives rise to a form of poverty which is largely absent in traditional societies, and which in some ways is even less tolerable than that which exists in the slums of Third World cities like Calcutta.

As Robert Wurmstedt puts it,

“The poverty in the black Puerto Rican neighbourhoods on the west side of Chicago is worse than any poverty I saw in West Africa. The people there are guided by strong traditional values. They do not live in constant fear of violence, vermin, and fire. We don’t find the same sense of desperation and hopelessness that you find in the American Ghetto.” [24]

One of the many reasons why development must give rise to social disintegration and anomie is that as more and more and more of the key functions that have always been fulfilled by families and communities are assumed by the state and the corporations, these key social units must simply atrophy, like muscles that are no longer in use, and among other things people will be deprived of by far and away the most caring and most dependable sources of security.

The bulk of people in the industrial world do not realize this. They depend on personal investments, on their jobs and on the welfare state to provide them with security. However, within the context of the highly unstable economy we have created investments are pretty speculative, as we are seeing today with the massive slump in technology shares and in the collapse of South-East Asian economies in 1997 and early 1998.

What is more, with today’s global economy there is now cut-throat competitiveness, which means the corporations, to survive, must cut costs to the bone, which means among other things that labour must be ‘flexible’, hence long-term contracts have been replaced by short-term ones, many full-time jobs are part-time jobs, and it is being made increasingly easy and ever cheaper to sack employees when it is profitable to do so, etc.

Jobs are thus increasingly precarious, while at the same time the welfare state, again in order to reduce costs to industry, is being systematically dismantled. As this process occurs so vast numbers of people living in an increasingly uncaring society, and increasingly deprived of family and community support, will find themselves deprived of virtually any form of security and will thereby join the proliferating throngs of the poor and the destitute. However, today’s poverty is as nothing compared to what it will be when the World Trade Organization’s cynical development policies are fully implemented.

In accordance with the WTO’s General Agreement on Trade and Services (GATS) just about all government services, covering every aspect of health care, primary, secondary, and university education, water services, environmental services, including environmental research and environmental control would be included. For the transnational corporations this is of course a fantastic bonanza, they have been awarded a colossal new market to exploit, with education, health, and water alone representing a 5-6 trillion dollar market. [25]

This means that just about all the services that the state originally took over from local communities, and which were largely subsidised by the public so that they could be provided for free for those in need, would now all be taken over by huge, totally unaccountable, transnational corporations who would charge for them the maximum price that they can possible get away with – creating an unprecedented number of poor people – especially in the Third World countries – who would thereby be deprived of access to the basic requirements of life.

But this is not all, in accordance with WTO regulations markets throughout the world are being systematically opened up to highly subsidized US food products. It has already begun in India with devastating results. There are somewhere between two and three billion small farmers in India, China, Indonesia, Thailand, and other parts of South and Southeast Asia, where the average farm size is only a few acres.

Few are likely to survive the opening up of their markets – few too of the artisans, small shopkeepers and street vendors who depend entirely on the farming community. Most of these unfortunate people will be forced to seek refuge in the slums of the nearest conurbations and, without land on which to grow their food, without jobs – as the level of unemployment in these slums is already horrific – and without any unemployment benefits, they will be reduced to a state of total destitution.

But the overriding contribution of economic development to the growth of world poverty must be the generation of ever greater amounts of greenhouse gases that cause global warming. This is by far and away the greatest problem humanity has ever faced, indeed, if we do not rapidly put this totally destructive process into reverse much of our planet will soon be largely uninhabitable with ever worsening heat waves, floods, droughts, storms, and sea-level rises, giving rise to vast migrations of impoverished and half-starved refugees across the surface of our planet.

If we then still do nothing about it development will have effectively eliminated poverty as the world will become totally uninhabitable and no humans, either rich or poor, will be able to survive. [26]

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1. Chakravarthi Raghavan, Third World Network feature, October 2000.
2. International Labour Office (ILO), World Report 2000.
3. ILO 1997a and OECD 1999, quoted in ILO World Report 2000, ibid..
4. ILO 1999b.
5. John Carvel, Social Affairs Editor, The Guardian, 11 December 2000.
6. Vinod Thomas, The Economist, 7 October 2000.
7. See Karl Polanyi, The Great Transformation. Beacon Press, Boston, 1957. First published 1944.
8. Mungo Park, Travels in the Interior of Africa; p.5. Folio Society, London, 1984. First published 1799).
9. Nigel Pollard “The Gezira Scheme: A study in failure”. The Ecologist Vol. 11 No. 1, 1981; pp 24-31.
10. R. Thaman, Food Scarcity, Food Dependency, and Nutritional Deterioration in Small Island Communities. A paper presented at the 49th ANZAAS Congress and Tenth New Zealand Geographical Conference, Auckland, New Zealand. Symposium on “Problems and resource use and development in small islands of the Pacific”, 24 January 1979.
11. See Albert Damon; pp.291-216. See Edward Goldsmith, The Way (US edition); p.481, p.494. See also Ian Prior et alia, “Migration and gout: The Tokelau Islands Migration Study”. British Medical Journal, 22 August 1987.
12. World Bank.
13. Laurence Van der Post, Venture into the Interior; p278, Hogarth Press, 1958.
14. Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh. Rider Books, London, 2000.
15. Ch’ien Lung, quoted by Arnold Toynbee in A Study of History; p161. Royal Institute of International Affairs, London, 1934.
16. Serge Latouche L’Autre Afrique; p.99.
17. Marshall Sahlins, The Original Affluent Society. Stone Age Economics, Aldine, New York, 1972.
18. Serge Latouche, ibid; p.105.
19. Julius Nyerere Ujaama, “The Basis of African Socialism”. In Ujaama : essays on socialism. Oxford University Press, Dar es Salaam, 1968.
20. Urie Bronfenbrenner, “The Origins of Alienation”. Scientific American, August 1974.
21. International Labour Office (ILO) 2000, ibid.; p.43.
22. (OECD 1997a and OECD 1999) – in ILO 2000, ibid.; p.43.
23. Robert McIver, The Ramparts we Guard; p.242. Macmillan, New York, 1964.
24. Robert Wurmstedt. Quoted by Edward Goldsmith, The Way: an Ecological Worldview. University of Georgia Press, 1998.
25. See Agnes Bertrand and Laurence Kalafatides, “The World Trade Organization
and the Liberalization of Trade in Healthcare and Services”. In Edward Goldsmith and Jerry Mander eds., The Case Against the Global Economy and for a Turn Towards Localization. Earthscan, London, 2001.
26. See The Ecologist special issue on climate change, March 1999; and The Ecologist second special issue on climate change, November 2001.
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