Category Archives: Inequality

Poverty the eye cannot see

By: Harsh Mander
Faye Hall

In India, there are near-constant debates about defining and measuring poverty, hunger, malnutrition and starvation. If these were merely of academic interest, this writer could pass them by in his uneducated ignorance. Any confusion could be rationalised by echoing an irreverent professor at the Delhi School of Economics, who compares statistics to a hapless and impoverished tribal man, arrested by a police inspector in a dreaded Indian police station. “If you torture both enough,” the professor tells his students, “you can force them to admit to anything!”

Yet we cannot afford to ignore the sometimes complex calculations of estimating poverty and hunger levels. Especially since the 1990s in India, these calculations have been deployed by public planners and finance managers to justify cutting back public expenditures on food security, by targeting a hitherto universal public distribution system (through a country-wide network of subsidised foodgrain ration shops) at only those who are officially ‘certified’ to be poor. The same calculations of allegedly declining poverty and hunger are used to limit public expenditures on a range of other programmes for the poor – such as pensions for destitute old people and maternity benefits – and to minimise official acknowledgement of the adverse impacts of the policies of ‘structural adjustment’ programmes. Continue reading


Filed under India, Inequality, Poverty

Escaping The Poverty Trap

This appears to be an interesting report, thanks to this blog

Worldwide, between 320 and 440 million people live in chronic poverty. They need not. Five policy measures could help them escape the poverty trap, says the second international Chronic Poverty Report 2008-2009, launched in London last month.

The report was produced by the Chronic Poverty Research Centre (CPRC), a global partnership of universities, research institutions and NGOs from countries including Bangladesh, India, South Africa, Uganda and the UK, and is funded by the UK government’s department for international development. The centre is led by the University of Manchester, UK and the UK’s Overseas Development Institute (ODI).

It intersperses these personal stories with analysis, and identifies five factors which underlie poverty: insecurity, limited citizenship, spatial distribution, social discrimination and poor work opportunities.

The solutions to these ‘poverty traps’ include nets of social protection, particularly through cash transfers to households; public services for the hard to reach poor; anti-discrimination and gender empowerment measures; building individual and collective assets, and strategic urbanization and migration policies

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Filed under Globalization, Inequality, Poverty

Food crisis demonstrates the limits of globalization

Food Is Different
Globalization has made more food available worldwide to more people at lower prices. But the current crisis demonstrates the limits of globalization and that the market for food may not be the same as for other products.

by Bruce Stokes
Globalization’s Pluses and Minuses

The world has become more dependent on imported grain in the past 40 years, but failing global grain stocks make it harder to ease shortages and high prices.
Robert Zoellick, head of the World Bank, warns that the unfolding food crisis could force 100 million people deeper into destitution and set back efforts to reduce world poverty by seven years.

In the midst of this crisis, the immediate humanitarian challenge is to feed the hungry. But the suddenness and breadth of the emergency has raised fundamental questions about the future of agricultural policy that will drive debates in Washington and other world capitals for years to come. The questions being posed about agricultural policies are complex and hard to answer.

Was it a mistake over the past generation to increasingly trust market forces to feed the world? Or are the problems that bedevil farmers today the residue of continued government interference in agricultural markets? Are current food prices a problem or the ultimate solution to future food needs? Does the world food system suffer from too much globalization or not enough?

In the search for answers to these questions, Washington is a Tower of Babel. Partisans of all stripes have seized on the crisis to justify their long-standing ideological positions on agriculture. Free-market proponents support a swift completion of the Doha Round of multilateral trade negotiations, which would cut American and European farm subsidies and allow developing countries to increase their food exports to rich countries. “The solution is to break the Doha Development Agenda impasse in 2008,” Zoellick said in April. Continue reading


Filed under Food Security, Globalization, Inequality, World

The world food crisis and the capitalist market – Part Two

By Alex Lantier published here on  9 June 2008

This is the second part of a three-part series of articles on the world food crisis. Part one was posted earlier

The central problem underlying the current food crisis is not a physical lack of food, but rather its unaffordability for masses of people due to rapidly increasing prices. Among the immediate factors driving the rapid worsening of the food crisis, a major role is played by the explosion of speculative investment in basic commodities such as oil and grain, itself bound up with the difficulties facing US and world financial markets and the decline in the US dollar. Rampant speculation by hedge funds and other big market players has increased costs, encouraging private firms to further bid up prices in a competitive drive to amass as much profit as possible.

Official statistics disprove the assertion that there is not enough food for everyone. According to 2008 US Department of Agriculture figures, the average per capita consumption is 2,618 calories per day in developing countries and 3,348 in developed countries, compared with a recommended minimum of 2,100 calories. However, profound disparities in access to this food, stemming from poverty and social inequality, condemn many millions to hunger.

Time magazine quoted United Nations World Food Program official Josette Sheeran as saying, “We are seeing food on the shelves but people being unable to afford it.”

Commodity speculation
World market prices for agricultural commodities have surged precisely as big investors have pulled out of traditional investment and credit markets, largely as a result of the bursting of the US housing and credit bubbles in 2007. Speculative capital has gone in search of other profitable investments.
A major avenue for such speculative capital is commodity futures. This essentially involves financial bets that prices of basic goods such as oil, grains and metals will continue to rise. Since these futures are used as benchmarks for actual trading in the physical commodities, their heady rise has helped sharply pull up market prices for the commodities themselves.

Recent congressional testimony by a US hedge fund manager, Michael Masters, sheds an interesting light on commodity futures speculation. He told Congress:
“In the early part of this decade, some institutional investors who suffered as a result of the severe equity bear market of 2000-2002 began to look to the commodity futures market as a potential new ‘asset class’ suitable for institutional investment. While the commodities markets have always had some speculators, never before had major investment institutions seriously considered the commodities futures markets as viable for larger-scale investment programs. Commodities looked attractive because they have historically been ‘uncorrelated,’ meaning they trade inversely to fixed income and equity portfolios [i.e., they do not necessarily fall, and instead tend to rise, when the bond or stock markets decline].”
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Filed under capitalism, Food Security, Globalization, Inequality, Poverty

Colonialism, Inequality, and Long-Run Paths of Development

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Global survey reveals growing anger over social inequality

By Bill Van Auken
20 May 2008

The unprecedented accumulation of wealth by a narrow financial elite under conditions of declining real incomes for the vast majority of the world’s population is creating mounting discontent and anger.

This is the significance of a poll conducted across Europe, Asia and the United States by the Financial Times of London and the Harris polling firm.

“Income inequality has emerged as a highly contentious political issue in many countries as the latest wave of globalization has created a ‘superclass’ of rich people,” the Financial Times commented in relation to the poll results, which were published Monday.

The FT/Harris poll found overwhelming majorities throughout Europe expressing the view that the social chasm between the financial elite and the rest of the population has grown too large. In Spain, for example, 76 percent said that social inequality had grown too great, while in Germany the figure was 87 percent.

In China, which has become the low-wage manufacturing center of the world, subjecting millions of workers to exploitation while producing a new class of billionaires and multi-millionaires, 80 percent said that inequality in income was too great. Continue reading

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Filed under capitalism, Development, finance, Globalization, Income distribution, Inequality, Poverty, Surveys, World

Global crisis & Marx

By Simon Caulkin

TO piece together the fragments of today’s worldwide crisis is to grapple with a sense of deja vu. The sweep of globalisation; strident inequalities (the Financial Times recently ran a breathless piece about the Bond-style security mechanisms built into the luxury homes of the international superclass — alongside stories of food riots); vast intervention by central banks to prop up the banking system; the origin of the crisis in the explosive mixture of masters and leftovers of the universe — what does all this remind you of?

It takes a reading of Francis Wheen’s concise and lucid Marx’s Das Kapital — a biography (Atlantic) for the penny to drop. The cantankerous ghost hovering over the global turmoil and glorying in the discomfiture of its chief agents is that of London’s Highgate Cemetery’s most eminent denizen and the UK’s great revolutionary.

The sense of the grinding of the gears of history, the shifting of the political and economic plates, comes straight from Karl Marx (although some might also want to add an element of Groucho). When the governor of the Bank of England talks of protecting people from the banks, and plaintively recommends that graduates should consider a career in industry as well as the City of London (financial sector), shimmering eerily through his remarks is the Gothic vision of alienation and auto-destruction that Marx outlined 150 years ago. Continue reading

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