A (Very) Short History of the Idea of Ending Poverty
Dorothea Lange: Between Weedpatch and Lamont (Children Living in Camp), Kern County, California, 1940.
by Martin Ravallion
Republished from VoxEU (Guido Tabellini © voxEU.org)
There are times and places when announcing a goal for ending poverty is clearly little more than a symbol of good intentions. It tells poor citizens, and those who care about them, that the government (or international agency) purports to be on their side, even if nothing much is done to ease poverty. This can be called a ‘symbolic goal’.
At times there have also been more substantive aims. Advocates against poverty have variously seen it as: the most morally objectionable aspect of inequality, stemming mainly from economic and political forces rather than bad choices by poor people; a key material constraint on human freedom and social inclusion; a risk of deprivation, whether currently poor or not; and a cost to other valued goals, including economic efficiency, human development and environmental sustainability. The actions that might be motivated in response range from specific policies to efforts to help poor people organise collectively for things that matter to them. Thus, goal setting is seen as an incentive mechanism for attaining better outcomes. We can call this the ‘motivating goal’. For example, the United Nation’s first Sustainable Development Goal (SDG1) of ending “extreme poverty” globally by 2030 is clearly intended to be motivational (UNDP 2020).
In a new paper, I provide a short history of the idea of ending poverty as a motivational goal, and try to draw some lessons from that history (Ravallion 2020). I argue that ending poverty is a modern idea, little evident in pre-modern times. The balance of factors influencing the motivating goal changes with economic development and varies from one place to another. Politically, the perceived benefits depend on the weight given to poor people, which depends in turn on their voting power and their capacity to organise. The cost of ending poverty through redistribution depends (in part) on how much poverty there is, relative to the resources thought to be available. It can be no surprise that calls for ending poverty have been heard more often when a society’s total resources make it more feasible to do so. Hollander (1914: 18) put it nicely: “It is because the whole loaf is large enough to satisfy the hunger of all who must be fed that individual want is intolerable.”
History confirms the intuition that ‘ending poverty’ has little political traction as a near-term goal when mass chronic poverty is seen to be the norm and poor citizens have little political influence. When those conditions no longer hold, a political goal of ‘ending poverty’ can motivate public action to end poverty. Fleischacker (2004) argues that the late 18th century saw the intellectual germ of the modern idea of distributive justice. However, it did not get far in economics or policymaking until much more recently. Over the 19th century, poverty rates fell substantially in Western Europe and North America, and we started to see mainstream advocates of ending chronic poverty, and policies for doing so.
While the history of the idea of ending poverty confirms that political constraints matter, it also suggests that they are not deterministic. Social and economic thought, and data, have often played a role. One could not talk seriously about ending poverty until it was agreed that less poverty was a good thing, and here Smith (1776) was influential in overturning the prior mercantilist thinking that saw poverty as essential for wealth generation. Descriptions (both qualitative and quantitative) of the lives of poor people have also had much influence, often shaming the non-poor into supporting actions to help poor people. The effort to document poverty, especially those of the late 19th century, also fostered the development of modern empirical social science, including economics.
In the wake of high inequality and the critiques and rising influence of the socialist and labour movements, and the heightened public awareness of poverty, the period around the turn of early 20th century saw a concerted effort to reduce poverty and inequality in much of today’s rich world. This was echoed in economic thinking; the most famous economist of the time, Alfred Marshall (1890), was asking in 1890, “May we not outgrow the belief that poverty is necessary?” Fledgling welfare states started to emerge, alongside progressive income taxation and minimum wage laws in the early part of the 20th century. The poverty focus gained political momentum in the wake of the Great Depression. Famously, in America, President Roosevelt’s new social programs – bundled under the label of the New Deal – included the Social Security Act, which introduced federal pensions for the elderly, transfers for families with dependent children, and unemployment benefits.
There was new interest in the idea of ending poverty after the WWII, and an explosion of interest and effort from around 1960, with policy responses in many countries, including America, notable under the Johnson administration’s War on Poverty. The debates about poverty in America in the 1960s and 1970s both reflected past debates, but also anticipated issues that would be prominent going forward, especially about the relative importance of economic growth versus redistribution.
In the post-Colonial period, the newly independent states – what we came to call the ‘developing world’ – were keen to see an end to poverty. Some of this was clearly little more than symbolic goal setting. Progress was slow for most countries. An acceleration in progress against poverty emerged around the year 2000.
Prior to SDG1, the UN’s first Millennium Development Goal (MDG1) of halving the 1990 poverty rate by 2015 was achieved ahead of time. The fact that MDG1 was achieved has been taken by some observers to imply that it was hugely motivational, though some of the claims made for the power of MDG1 have clearly been exaggerated. One might equally well argue that MDG1 was not ambitious enough. More worryingly, however, is that halving the 1990 poverty rate was attained with only modest gains for the poorest (Ravallion 2016).
The UN’s Sustainable Development Goals came to include ending extreme poverty by 2030. This is more ambitious than MDG1, and more politically challenging. SDG1 focuses attention on the poorest 10% globally, although it also highlights regional priorities; 40% of the population of sub-Saharan Africa still lives below that line. Importantly, SDG1 cannot be attained if the poorest are left behind, as we saw in the MDG1 period.
Attaining SDG1 will clearly not be the “end of poverty” (as the UN’s rousing labelling of the goal suggests). Many of those who are no longer poor by the global $1.90 standard will still be poor by the (defensible) standards of the country they live in (Ravallion and Chen 2019). Nonetheless, getting everyone above a global line that 10% do not currently reach, and 40% did not attain 40 years ago, would be an achievement.
The path to attaining SDG1 calls for some combination of economic growth, especially when fuelled by pro-poor technical progress, and pro-poor redistribution. The political context clearly matters to the relative importance of growth versus redistribution, but so does the level of economic development. When there is a lot of poverty – such that redistribution is politically and economically challenging, if not impossible – economic growth may be all that we can hope for as a politically feasible response. There have been cases of rising poverty with economic growth, but they are rare over the longer term. The Catch-22, however, is that poverty typically makes it harder to grow an economy.
History suggests that the dynamics of poverty reduction can sometimes work synergistically with the political economy to accelerate progress; the heavy lifting is done by growth, but then redistribution starts to take over. This virtuous cycle has been evident at times in the history, but it can come unstuck, especially when the poorest are harder to reach, and one can point to arguments and evidence as to why that might be so. It is undeniably good news that fewer people live near the floor to living standards, but it is sobering that the floor has not risen more.
SDG1 will probably not be attained with a return to ‘business as usual’ after the COVID-19 pandemic. Restoring economic growth in poor countries will almost certainly be required. There is scope for more effective redistributive policies, and even efficiency-promoting redistributions, though there are continuing challenges in assuring that these policies reach the poorest. There is also a more widespread recognition that the economic growth that has helped so much to reduce aggregate poverty measures has also come with environmental costs, including global warming. Huge challenges lie ahead in how to manage the likely tradeoffs between the ‘social’ and ‘environmental’ SDGs.
References
Fleischacker, S (2004), A Short History of Distributive Justice, Harvard University Press.
Hollander, J (1914), The Abolition of Poverty, Houghton Mifflin.
Marshall, A (1890), Principles of Economics (8th edition, 1920), Macmillan.
Ravallion, M (2016), “Are the World’s Poorest Being Left Behind?”, Journal of Economic Growth 21(2): 139–164.
Ravallion, M (2020), “On the Origins of the Idea of Ending Poverty,” NBER Working Paper 27808.
Ravallion, M and S Chen (2019), “Global Poverty Measurement when Relative Income Matters,” Journal of Public Economics 177: 1-13.
Smith, A (1776), An Inquiry into the Nature and Causes of the Wealth of Nations, Electronic Classic Edition, Pennsylvania State University.
UNDP (2020), “Background on the Goals”, United Nations Development Programme.
About the Author:
Martin Ravallion holds the inaugural Edmond D. Villani Chair of Economics at Georgetown University, prior to which he was the Director of the World Bank’s research department. He has advised numerous governments and international agencies on poverty and policies for fighting it, and he has written extensively on this and other subjects in economics, including four books and 200 papers in scholarly journals and edited volumes. His latest book, The Economics of Poverty, was published by Oxford University Press in 2015.
He is the President of the Society for the Study of Economic Inequality, a Senior Fellow of the Bureau for Research in Economic Analysis of Development, a Research Associate of the National Bureau of Economic Research, USA, and a non-resident Fellow of the Center for Global Development. Amongst various prizes and awards, in 2012 he was awarded the John Kenneth Galbraith Prize from the American Agricultural and Applied Economics Association, and in 2016 he won a BBVA Foundation Frontiers of Knowledge Award.
