November 19, 2017

Development always brings more poverty

Published in Open Forum, Humanitarian Affairs Review, spring 2002.

Edward Goldsmith, editor of The Ecologist and co-author of The Case Against the Global Economy strongly disagrees with Keith Marsden’s article in the Autumn issue of Humanitarian Affairs Review.

In his article, Keith Marsden challenged many of the claims of anti-globalisation demonstrators.

Goldsmith argues here that development of the sort associated with globalisation inevitably leads to increased poverty, and says that the further liberalisation of services will have dire consequences, especially in Third World countries.

“Development unfailingly creates a large number of poor and deprived people, whose numbers can only increase as development proceeds and will do so even more with globalisation.”

Edward Goldsmith.

“The G8 leaders should take these facts into account in their discussions on reforms of the trading system and should give careful scrutiny to protectionist measures.”

Keith Marsden.

In his article “The globalisation debate – why free trade does benefit the poor” Keith Marsden suggests that claims of globalised free trade having harmed the poor are “sweeping assertions . . . not supported by independent fact.” However, the latest statistics released by the International Labour Organisation (ILO) tell a different story. In spite of development, poverty in Indonesia 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.

In its report, the ILO says that much the same thing has happened throughout South America as well as the Caribbean. Even more shocking, the percentage of global income received by the poorest 20 percent of the population fell from 2.3 percent to 1 percent between the years 1960 and 1997, while in just the last five years the number of people living in extreme poverty around the world has increased by 200m.

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 that development has not proceeded fast enough. Such people do not see poverty as an isolated problem, but as the cause of all our other problems. The UN’s Food and Agricultural Organisation (FAO) insists that people are hungry because they cannot afford to buy the food they need. The World Health Organisation (WHO) maintains that disease-ridden people die young because they are poor and cannot afford the medicines that would make them healthy. The answer to both hunger and disease, they say, is the eradication of poverty, hence more development.

Entirely for free

In traditional families and communities, settlements were designed, houses built, food produced, prepared and distributed, children reared and educated, the old and the sick cared for, religious ceremonies organised and performed, government functions pursued – all entirely for free. All the functions that we now regard 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 means that functions that were previously provided for free are stripped of their social context, monetised and taken over either by the state or large corporations. The inevitable result is that a large section of society cannot acquire the money to pay for food, shelter, and other necessities of life. In other words, development unfailingly creates a large number of poor and deprived people, whose numbers can only increase as development proceeds and will do so even more with globalisation.

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 colonisation, and later by economic development, and their natural environment destroyed. R. R. Thaman of the University of the South Pacific, 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.

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 heart disease, dental caries and diabetes – diseases that were almost unknown a few decades ago.

In other words, tribal and other traditional people did not require the money provided by economic development in order to be healthy and well-fed. What’s more, these pre-industrial people did not feel poor. When Laurens van der Post wanted to give a present to Bushman friends in return for hospitality, he simply did not know what to give them. To label Bushmen as poor completely misses the point, for in their natural environment, they do not feel in any way deprived by their lack of material goods.

This attitude could not be more foreign to us. Our appetite for material goods and technological devices seems insatiable. Indeed, our wealth and welfare is normally gauged in terms of our access to them. It is 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 many are required to satisfy biological, social, spiritual, and aesthetic needs that were once satisfied for free.

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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. The closest are the words that denote an ‘orphan’.

“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 civilisation.”

Poverty is therefore not associated with a lack of money, but with the absence of social support. Julius Nyerere, former President of Tanzania, said that in African societies nobody starved because he lacked personal wealth because, “he could depend on the wealth possessed by the community of which he was a member.”

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Industrial poverty

Most poor people in industrialised societies have minimal family support. Many are old people, dependent on meagre state pensions, who have been largely abandoned by their families or single mothers and their children. 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. Not surprisingly child poverty in the OECD countries in general has also substantially increased. Between the years 1972 and 1994 for instance, it has doubled in Germany and trebled in the UK.

Social disintegration and the resulting social deprivation is most advanced in the slums of the modern industrial cities. It produces a form of poverty which is largely absent in traditional societies, and which in some ways is even less tolerable than that found 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 where we don’t find the same sense of desperation and hopelessness that you find in the American ghetto.”

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Most people in the industrial world do not realise that the key social units of the family and communities atrophy like unused muscles when their functions are taken over by the state and corporations. As a result, the most caring and dependable sources of security are lost. In industrial societies people depend on personal investments, on their jobs and on the welfare state to provide them with security.

However, in the highly unstable world economy, many investments are speculative, as can be seen in the recent massive slump in technology shares and in the collapse of South-East Asian economies in 1997 and early 1998. Jobs are increasingly precarious, while the welfare state is being systematically dismantled. As this process occurs, vast numbers of people will join the throngs of the poor and the destitute. But I believe that today’s poverty is as nothing compared to what it will be when the World Trade Organisation’s cynical development policies are fully implemented.

In accordance with the WTO’s General Agreement on Trade and Services, government services would be included, thus covering every aspect of health care, primary, secondary, and university education, water services, environmental services, including environmental research and environmental control.

For trans-national corporations this is a fantastic bonanza; they have been awarded a colossal new market to exploit, with education, health, and water alone representing $5-6 trillion. Just about all the services that the state originally took over from local communities – which were largely subsidised by the public so that they could be provided for free for those in need – would be taken over by huge, totally unaccountable, transnational corporations. This would create an unprecedented number of poor people – especially in the Third World countries.

But this is not all. In accordance with WTO regulations, markets throughout the world are being systematically opened up to highly subsidised US food products. It has already begun in India with devastating results. There are 2 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 – nor are the artisans, small shopkeepers and street vendors who depend entirely on the farming community. Many of these unfortunate people will be forced to seek refuge in the nearest slums.

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Destructive process

However, the overriding contribution of economic development to the growth of world poverty must be the generation of ever greater amounts of the greenhouse gases that cause global warming. This is by far and away the greatest problem humanity has ever faced. 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. If we do not face this problem we may even succeed in eliminating poverty – just as the world becomes totally uninhabitable by the rich or poor.


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