THE FLAT EARTH HYPOTHESIS

Poverty, capitalism and you

The cycle of capital

Money

Commodities Money II

Commodities

Remembering capitalism

Capitalism is the system in which ‘capital’ is invested to produce profits and increase the accumulation of capital

Global capitalism has produced unprecedented wealth

Yet the influence of global corporations and the profit motive has produced a number of difficulties

To what extent…

….has globalisation, or global capitalism, been beneficial for the global poor? ….do we live in an increasingly ‘flat’ earth?

And, what does this have to do with us?

Today

Understanding global poverty

Poverty and the global conscience

Capitalism and the development ladder

Poverty and you

What would it mean to be in poverty?

Absolute Poverty

Absolute, or extreme, poverty is an income measure that calculates the minimum income required to meet basic needs (e.g. not die)

The difficulty comes in measuring income and deciding what are basic needs (and how much they cost) in each location

Measuring poverty

World Bank measurements of absolute poverty are based on ‘Purchasing Power Parity’ (PPP)

PPP measures the amount of money needed to purchase the same amount of goods in each country, expressed in US dollars

The World Bank defines extreme/absolute poverty as living on less than $1.25 a day (it had previously been US$1.08)

Measurements are carried out through ‘household’ surveys and the methodology has been strongly challenged

What would be the minimum basic

needs be in London?

How would you live?

If your income was reduced to £.82 per day, or £5.64 per week, how would you live?

Would you have shelter?

Where would you get your food and water?

If you had no land, or no opportunity to find formal employment, how would you try to find income?

What other factors would you include in

a definition of poverty?

Poverty: World Bank

World Bank: Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life

Poverty: United Nations

United Nations: Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.

Is anyone in London living in poverty?

Poverty before modernity

For large periods of human history poverty was seen as both natural and inevitable

Inevitable because there were not enough resources for everyone

Natural because those who experienced poverty were born into that

condition and had no means to rise above it

With the ideals of modernity and the economic progress of the industrial revolution came the possibility that poverty could, and should, be overcome

Millennium Development Goals (MDGs)

The MDGs were set by the United Nations in 2000 to be achieved by 2015, with a baseline of 1990

Along with the ‘Make Poverty History’ campaign, the MDGs symbolised a new participative, interactive and individual approach to poverty

One of the eight goals was to ‘eradicate extreme poverty and hunger’, which has three measures: 1. Halve, between 1990 and 2015, the proportion of people whose income is less

than $1 a day

2. Achieve full and productive employment and decent work for all, including women and young people

3. Halve, between 1990 and 2015, the proportion of people who suffer from hunger

Progress!

The Live8/Make Poverty History campaigns did make significant contributions to reducing absolute global poverty, although some promises were not kept

Huge amounts of 3rd world debt was cancelled, allowing for much higher public spending in these countries In the ten African countries that have had debts cancelled, there

have been increases of around 40% on education spending and 70% in healthcare

Aid increased significantly: Africa received around US$11

billion more aid in 2010 than in 2004

Keeping up the good work?

Whilst the majority of the world still suffer from material deprivation, there has been significant progress Approximately 50% of the world

live on less than US$2.50 a day

Approximately 80% live on US$10 per day

Development aid is valuable, but it has been economic growth that is the main driver of progress

Poverty and you

Whilst considerable progress has been made, substantial poverty remains. What is behind these trends?

A. Progress had been achieved through the global expansion of capitalism

1. Your consumption produces demand which creates jobs that reduce poverty

B. Progress has masked the continued exploitation by the West of the rest

1. Your consumption exploits vulnerable people and maintains their misery

Both these perspectives acknowledge the benefits of scientific advances in public health and agriculture, along with the value of aid and charitable contributions

The Flat Earth

Economic interconnectedness is one of the distinguishing features of globalisation and global capitalism

From the 1970s capitalism began to expand rapidly through trade and the ‘out-sourcing’ of employment

Intensified connections between distant localities vastly reduces differences in economic opportunity Political changes in trade and technological changes in transportation have

globalised manufacturing

Communication technology has allowed for the trading of services

These factors have brought a huge supply of labour into the global market, leading to a ‘convergence effect’ and the idea of a global development ladder

Globalising employment

The Convergence Effect

The Development Ladder

The idea of a development ladder was popularised by Jeffery Sachs (one of the authors of the MDGs)

It suggests that climbing out of poverty is possible, but is incrementally achieved through structural economic and political changes

These structural changes, often demanded by loan providers, require the country to open up to the global economy

Here ‘intensive manufacturing’ is just one step up the economic ladder

The Debate

Supporters of ‘free-market’ capitalism acknowledge that capitalist societies do have ‘winners’ and ‘losers’

The winners have achieved their success by being entrepreneurial and working hard Eliminating global poverty is about creating conditions that

allow for entrepreneurship and hard work to be rewarded

Marxist’s and other critics of capitalism suggest that

wealth is accumulated through privilege and exploitation Those who start with resources are able to employ workers

who are paid less than the value they create

The capitalist dream

A nation increases its investment in education, law and order and infrastructure (often through aid and restructuring loans from global economic institutions)

It is able to attract Western companies to build factories based upon the abundance of cheap labour – the country’s natural advantage

The newly employed now have money to spend in other businesses, which also attract outside investment

As the economy expands, more tax is able to be spent on services, particularly on education

The cost of labour rises and manufacturing jobs go to other countries

China’s Climb

By utilising its massive supply of labour, China was able to attract manufacturing investment which transformed the country from a rural, agricultural, economy to an industrial power

As more work came to China, the country grew richer and more money was spent internally

This raised living standards and increased the possibilities for more investment and development

Eventually, labour costs rise and lost-cost work goes elsewhere

https://www.youtube.com/watch?v=ESErUlu9dKs

The Marxist nightmare

Economic restructuring propels large populations to migrate into urban slums

There are a number of small garment factories in their slum but, with so many people wanting jobs, the owners pay only what they have to keep their workers alive

Unable to get a job at the factories, the majority of people enter an informal economy of begging, temporary stalls and prostitution

A ‘poverty trap’ of survival mechanisms is continued

http://www.oecd.org/social/poverty/isinformalnormalmessagesfiguresanddata.htm

If you had a manufacturing

company, would you employ workers

from Bangladesh or Britain?

http://www.epi.org/blog/apple-iphone-profits-dwarf-labor-costs/

Is your phone good for the world, or just for

you?

Below the Sahara Desert

Sub-Saharan Poverty

The climate in parts of this region is particularly harsh, making it difficult to grow crops without technological intervention

Many areas lack access to ports for trade and fresh water for irrigation and health

Much of the area exists in a ‘poverty trap’ whereby public heath issues, a historical lack of infrastructure and education prevent them from climbing onto the ‘development ladder’

People spend too much of their money on survival rather than ‘investment’

Foreign investment is often low and the educated elite often migrate

Approximately 40% of African born scientists live in the OECD

That investment that does exist is often highly exploitative

What has this got to do with you?

With the advent of globalisation and the idea of an interconnectedness world, there was an increased focus on global poverty

We experience this interconnectedness through the media as well as through economic associations

This comes to imply that we are responsible for that poverty, often through charitable discourse

These discourses appeal to us as consumers who have the capacity to respond

Congratulations !

You have just won £1million…

… but it all has to be given to charity

Where will it go?

Charitable difficulties

Charity implies a choice rather than a moral obligation

It also takes away responsibility from Western citizens/nations – there is no sense that the winners of capitalism might be responsible

Charitable giving, and aid, can be a short term band-aid rather than being a long-term solution

Do the rich have a moral responsibility to help the

poor?

Band-Aid

Development aid is not an automatic solution to poverty

Whilst it can certainly help, the main issue is the organisation of economies in a local and global sense

Is the economy established so that people can work hard and succeed? Human rights, education, health care, infrastructure

Is the nation economy positioned in an exploitative way within the global economy? Development occurs only for the benefit of wealthier consumers and

producers

Next Week

WEEK 9 IT’S GETTING HOT IN HERE: CLIMATE CHANGE AND THE LIMITS TO EXPANSION

READING:

Urry, J. (2010) Sociology and Climate Change. Sociological Review. 57 (s2), pp.84-100

Sachs, J. (2008) The Anthropocene in Commonwealth Wealth. Penguin: London, pp.57-82