BackReading between the poverty lines
Poverty is not so much about income, assets, or consumption, as it is about capabilities, entitlements, and dignity
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The past week has seen a spirited debate over the poverty numbers put out by the Planning Commission. According to Plan panel estimates, between 2004-05 and 2011-12, 137 million people were moved out of poverty, bringing the national poverty rate down to 22%, from 37% in 2004-05.
Predictably, the claims have evoked a sense of vindication as well as derision. Advocates of the growth-first school of economic thinking see in the numbers much-needed proof—as well as reproof to their opponents—that a single-minded focus on economic reforms is the only way forward.
On the other hand, those who consider growth as only a means to the end of human development have pooh-poohed the claims, accusing it of juggling with numbers. They have come up with their own bunch of statistics to demonstrate that the ostensible decline in poverty does not tally with other key indicators such as, say, rates of malnutrition, for which figures have failed to show a similar rapid decline. And, hence, the numbers are nothing but statistical calisthenics aimed at making the government look good ahead of the polls.
Others have found fault with the Planning Commission’s low threshold for poverty, arguing that the Tendulkar committee’s poverty line—a spending capacity of ₹ 33.33 per person per day for urban areas, and ₹ 27.20 in rural areas—is not only unrealistic, but an insult to the poor. The growth-first school has countered this by arguing that no matter where you draw the poverty line, the decline in poverty numbers is not in question.
One reason for the intensity of the ongoing debate is that it is a shadow battle between the two schools to establish their supremacy. Within the current political dispensation, the growth school is represented, most visibly, by the powerful deputy chairman of the Planning Commission, Montek Singh Ahluwalia, while the National Advisory Council is said to be the voice of the social development school. But this is a false dichotomy, and strictly for public consumption.
The UPA regime’s heart is with the growth-first school. But for various reasons, it finds it convenient to be perceived as trying to do a balancing act between the two. In the process, it gets an inevitable lashing from one of the two groups no matter what it does. So, for instance, raising the foreign direct investment (FDI) cap in some sector will attract charges of being anti-poor and selling out to foreign MNCs, while a welfare measure, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), will invite accusations of fiscal harakiri and populist gimmickry driven by vote-bank politics.
While this two-sided engagement can be entertaining, and even dramatic, as seen most recently in the Amartya Sen versus Jagdish Bhagwati skirmish, it obscures more than it illuminates. It is hardly a coincidence that commentators on either side of the debate have been more than happy to focus only on the numbers, how they were arrived at, and what they really mean. Plowing through the various arguments and counter-arguments, you get the feeling that poverty is just a complex economic problem, and all we need to do is find the right policy solution and it will go away. Alas, if only the real world was as simple as the complex models our erudite economists derive their expertise from.
Poverty research is based on certain assumptions about the nature and validity of social science research, about political economy and about poverty itself. Depending on what these assumptions are, one can get very different pictures of poverty and its rates of prevalence.
The currently dominant paradigm for understanding poverty is distinguished by three features, all of which are problematic: one, it equates poverty with poor people, as a result of which the research is obsessed solely with locating poverty in the headcount of poor persons or households; two, it rests on an assumption of scientific objectivity and freedom from ideology that are not tenable in the social sciences, and particularly so given that even the physical sciences have imbibed a healthy scepticism in this regard; third, it derives its currency not from its superior insights or explanatory power but from its efficacy in being deployable for political ends that serve existing power structures.
None of this is new. Scholars such as Robert Chambers and Alice O’Connor have pretty much taken apart the liberal understanding of poverty, demonstrating conclusively that its singular value lay in its depoliticization of the poor. There exists a vast body of poverty research that approaches the subject as an inquiry into political economy rather than as a study of poor people’s consumption patterns. Such research includes within its scope the structural causes of poverty, and the economic and institutional processes that reproduce it. It has space not only for the professional economist’s data-driven perception of poverty, but also the poor people’s own perceptions of poverty, which present a necessary challenge (and a corrective) to the privilege attached to the data-collection and trend-monitoring model.
What the research industry model of poverty studies does—and does well—is to restrict the analysis to measurable flows. This approach assumes a correlation between income and well-being, and arrives at a one-dimensional view of poverty. Poverty, then, automatically becomes a condition of the poor, as opposed to, say, an effect of economic distortions caused by a certain kind of political economy.
Looked at another way, the two approaches to poverty research and alleviation can be characterized as the efficiency approach and the rights-based approach. For instance, it is a well documented fact that jobs—or regular wages—are the most effective tool to lift people out of poverty. So the logical thing to do, if the objective is to eliminate poverty, is to ensure people have jobs, or failing that, regular wages. But the efficiency approach will not brook the cost this would entail. Why? Because in a market economy, it is efficient to always have a certain number of working people hovering around the poverty line. A reserve army of cheap labour is part of the deal that makes our chosen model of economy work.
A real life example of this economic imperative in operation is the tussle over MGNREGA, which, despite its proven effectiveness as a lifeline for the poorest of the poor, has a perennial question mark hanging over it. MGNREGA is a cost, no doubt. But it is attacked not simply because it is a drain on the exchequer, which it is, but also, and especially, because it raises labour costs for industry. What’s more, it also creates labour shortages by letting migrant labourers remain in their villages instead of travelling to semi-urban or urban areas looking for work, where they can then be exploited by labour contractors in a buyer’s market. Let me clarify what I mean here by exploitation: not following the law of the land in either payment of wages or providing humane working conditions. For those interested, a visit to the nearest construction site or industrial belt will offer an arresting picture of what I mean by exploitation—a phenomenon that has a lot to do with poverty creation but rarely ever comes up in poverty debates.
Economics, and any economy for that matter, despite being populated solely by agents of rational self-interest, cannot claim immunity from certain non-economic factors: call it conscience or social justice or even call it the moral imperative. There is something about being human that recoils from inequality, and balks at the egregious idea that the extreme prosperity of a few is the condition of the modest survival of many. Such an avowedly humanist perspective—which has somehow ended up becoming radical in these times—holds that poverty is not so much about income, assets, or consumption, as it is about capabilities, entitlements, and dignity.
So, not merely income but the capability to increase one’s income, not merely assets but the entitlement to resources needed for building assets, and not merely consumption but the power to participate in socio-economic transactions with dignity—these are what will make an assault on poverty meaningful. This is by no means easy. It calls not for economic genius but for political commitment, which, of course, is an absurd expectation in a polity where, apparently, the more criminal you are, the greater are the chances of electoral success (https://tinyurl.com/py6pw3c). It is far easier, and far more convenient, to tom-tom some numbers.
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