Reader Greg Buckman has sent in his first venture into blogging, a response to Clive Hamilton’s Quarterly Essay, Whats Left: The Death of Social Democracy. Discussion welcome, with particular stress on civilised and constructive debate.
I found Clive Hamilton’s analysis of the Left in Australia in the last edition of Quarterly Essay provocative and stimulating. His argument that most of Australian society is drowning in a sea of plenty is probably valid for a lot of the country but his analysis of poverty in Australia was far too cursory and at times plain wrong. Clive seems unable to accept that both excessive income/wealth and excessive poverty can coexist and this hugely devalued his argument.
Poverty is more pervasive than Clive realises: he claimed on page 26 that about 12% of Australians were in poverty but that that figure included a lot of people in temporary poverty and that the number in entrenched poverty was only about half that proportion. In fact the number in both entrenched and temporary poverty is double the 12% figure: Mark Wooden from the Melbourne Institute at the University of Melbourne argues 24.3% of Australians were in poverty at some point between July 2000 and June 2003. The Australian Bureau of Statistics concur: they say 1.79 million households, or 23.4% of all households, have gross household incomes less than $400 per week. According to the Luxembourg Income Study group Australia had the fourth-highest level of poverty in the mid 1990s out of 24 high-income countries it surveyed.
Poverty is also more deeply set than Clive realises: on page 34 Clive argued poverty is one of three injustices that ‘cannot be understood as structural characteristics of modern capitalism’ but all commentators accept that poverty has barely changed in Australia since the early 1990s despite the period since then being the longest run of continuous economic growth our country has known since at least the Second World War during which per capita GDP has risen by 90%. If poverty won’t reduce when there so much ‘economic sunshine’ around then when will it reduce?
Contrary to Clive’s assertions a respectable argument can be mounted that says that poverty is, in fact, becoming more entrenched not less. Three of the key determinants of poverty are wages, housing and education. On wages between 1996 and 2004 the minimum wage set by the Industrial Relations Commission only increased by 11% in real terms which was only two-thirds the increase of general adult non-managerial earnings. On housing between 1992 and 2006 household interest payments in Australia rose from 6% to 11% of disposable income hugely increasing the pressure on the 880,000 lower-income families and single people in housing stress (ie spending more than 30% of their income on housing) and likely to increase their ranks. On education it is broadly recognised that poverty is closely tied to education levels but according to the latest Higher Education Report from the Department of Education, Science and Training the proportion of university students from poor backgrounds fell in the last few years put off, seemingly, by ever-increasing HECS fees.
It is impossible then to ignore the modern-day structural pressures that globalisation, financial deregulation and increased incidence of user-pay fees are having on poverty and Clive’s analysis of the future of the Left would be stronger if he incorporated this into his thesis instead of lazily dismissing it.
Economically there are still two Australias but Clive is blinkered about the less well-off one.
John Quiggin 
Here is the situation of some of my soon to be in-laws.
They bought a nice new home at a very reasonable price on the outskirts of Melbourne a few years ago. They were lucky to buy when they did and could not possibly afford the same house today, or any house for that matter.
Financially they are living on the edge. They have enough to cover the bills and the mortgage payments and that’s about it. They both work full time. The husband gets paid out his annual leave at the end of each year if it is not used up. So taking holidays, even holidays that consist of just staying home, is difficult because they cannot afford to give up the extra money. The new workplace laws have had an immediate affect on his job security. They never eat out. Five dollars here and there are really important to them. They are trying to do the responsible thing, get a home, work hard, be careful with money, don’t buy flashy new things. I would not describe them as poor, but despite doing everything “right” they are still one redundancy away from losing their home.
IMO high housing prices and hence high debt levels combined which much higher income variability explain why the economic expansion is not helping those at the bottom of the ladder very much.
“Mark Wooden from the Melbourne Institute at the University of Melbourne argues 24.3% of Australians were in poverty at some point between July 2000 and June 2003. The Australian Bureau of Statistics concur: they say 1.79 million households, or 23.4% of all households, have gross household incomes less than $400 per week.”
To what extent does this statistic include homeowners on pensions at the end of the lifecycle? My 86 year old father falls into this category and I can assure you he doesn’t live in poverty nor will he ever.
On your education point, you’ve only quoted figures for university. Anecdotally, a lot more people appear to be getting into trades, where the wages are just as high, if not higher, than many university skilled positions.
What a misleading article!
(1) “the number in both entrenched and temporary poverty is double the 12% figure…24.3% of Australians were in poverty at some point between July 2000 and June 2003.”
But this is not “entrenched poverty”! The HILDA survey (from which these figures are taken) finds that only 3.4% of people were under the poverty line (defined as 50% of median income) in all three years (2001-2003). There is a vast amount of movement in and out of ‘poverty’ (which is why 24% dip under the line at some point). As the Melbourne Institute’s Bruce Headey concludes in his 2005 paper to the HILDA conference: “Few are persistently poor.”
(2) “Poverty has barely changed in Australia since the early 1990s despite…per capita GDP has risen by 90%. If poverty won’t reduce when there so much ‘economic sunshine’ around then when will it reduce?”
But of course ‘poverty’ doesn’t reduce with economic growth if you insist on defining it in terms of relative income shares. ‘Poverty’ today is a lot more prosperous than ‘poverty’ was 15 years ago, but this increased prosperity is defined away in the way ‘poverty’ is being conceptualised.
Why is it that the left keeps wanting to exaggerate the extent of poverty? Answer: Because what it’s really concerned about is income inequality (the old socialist redistribution agenda). Left intellectuals know the public will not buy into this, therefore they muddy the waters by talking about ‘poverty’ instead, hoping to win public sympathy for their high tax, increased state intervention agenda.
Basically we’re being told here that around 1 in 4 Australian households are living in poverty. Balderdash! This sort of crap is getting to be the same as figures on child abuse http://www.news.com.au/story/0,10117,18736364-1246,00.html
Even lefty producer groups are beginning to complain about the accuracy of the rules being used.
There doesn’t appear to be a very clear definition of what poverty actually is, hence the silly figures like one in four.
‘Still working it out’’s story confuses me – is there more to the story?
If you assume the house cost $300,000 (since it’s on the outskirts of Melbourne, and was bought a few years ago, that seems reasonable), and interest rate of 7.5%, and a loan period of 30 years, you’re looking at weekly repayments of around $480.
And if you assume that the husband and wife both earn only $30,000, after tax they’ve got $950 in their hands. After paying $480 towards the mortgage, they’re left with $470. Obviously they’re not rich, but that doesn’t seem too bad to me. And they’re acquiring an asset at the same time, and given house prices rises, they’d be sitting on a fair bit of equity.
Am I missing something?
According to the ABS and Mark Wooden, bloggers Gianna, Meika and my old man are ‘poor’. Yeah riiiiiiight!
As an aside, this week Mrs O did the mandatory reporting on one of her JP pupils after asking him what were the 2 welt marks on his leg. Dad’s strap according to him, so off went the report. Then yesterday I get a call asking for 19 yr old MissO. She’s been doing some netball coaching associated with Netball SA in primary Schools after uni. It’s the local private school and they want her to bring in her police clearance for photocopying for their records. I daren’t speak of these things to the old man, who by the way was a surveyor leading survey teams across the Territory in long range Land Rovers for weeks on end camping rough. Try telling him 1 in 4 households are living in poverty these days. He’ll probably get the strap out and wash your mouth out with soap.
It is pretty difficult to make less than $400 a week in Australia.
Let’s take a typical “impoverished” Australian household: second-generation unemployed (a result of our resoundingly successful welfare policies of the past 30 years), married couple, 2 kids under 13.
Newstart Allowance: $370.50 per week
Family Tax Benefit: $215.00 per week
Rent relief: $59.15 per week (either that, or they have a govt-supplied house and pay next-to-no rent)
Total Income: $644.65 per week. Without lifting a finger.
And that’s just cash in hand. With bulk-billing and a health care card they’ll pay almost nothing for healthcare and drugs.
What a harsh society we live in. Surely the rest of us could dip into our pockets a little more. I mean, how about a government-subsidized cigarette and beer allowance?
An argument (based on high levels of tax and high levels of welfare) could also be mounted to say that Socialism is becoming more entrenched not less. Blaming capatilism seems dumb when we are having less of it.
Peter is spot on. Living on 50% of the median income in Germany has got to be more fun than living on 50% of the median income in Zimbabwe. Living on 50% of the median income in Australia in 2006 has got to be better than living on 50% of the median income in Australia in 1986.
The fact that everybody in society can have their real incomes increased 10 fold with no impact on “poverty” shows how stupid the definition of “poverty” has become.
The left has debased the word “Poverty” through misuse and abuse. The word needs to be rescued from the left or else an alternate word invented to describe real human suffering in a more absolute and objective manner.
The drop in low SES students was more likely due to a fall in student places than any price effect, though the two are not mutually exclusive:
http://badanalysis.com/catallaxy/?p=1237
On that definition I ‘suffered’ from poverty during the period – I was unemployed for a while. Balderdash – at best.
so the poor arent poor and it would seem the rich arent rich
lies, damned lies and statistics,
poverty is relative,
yes if you look at my income compared to a zimbawean then i am doing great, but i dont live in zimbabwe,
i started doing part time jobs like waitering and labouring in 1988,
today the wage for those jobs is the same or less,
but every single cost of living has risen and a lot of costs have doubled or tripled,
meanwhile the top five percents incomes have sky rocketed
so how can people not be poorer
it just doesnt make sense
Now you mention it, on that definition I too suffered from poverty during the period. Balderdash indeed.
Smiths,
If we used PPP (purchasing power parity) to compare the job of an Australian waiter in 1988 and PPP to look at the situation for an Australian waiter in 2006 then we might get a better sence of whether things are better or worse.
However this does not mean poverty should be measure relative to the society in which you live. It just means that it should be measured relative to the buying power of your wages.
Regards,
Terje.
Peter Saunders, Terje,
It happens to be a feature of the solutions of theoretical models of ‘competitive private ownership economies with complete market’ that any notion of ‘prosperity’ and any notion of ‘poverty’ is a relative one – just as it is the case that relative prices and not absolute prices determine ‘profits’.
So, it appears to me the reference to ‘left’ is a red-herring.
The welfare payment example given by Dogz could be described as the Australian society’s decision to keep individuals’ above a ‘survival constraint’ and, by doing so, keep these people within an economic system which does not reject markets.
So, what exactly is your argument?
PS: There are two sub-themes in Dogz’ example (‘second-generation’ and ‘not lifting a finger’). I’d like to set these aside so as not to obscure the main point. In any case, it seems to me that detailed case study type information would be required to form at least a half-way educated opinion.
Peter Saunders and right wing think tanks funded by the rich and influential (as opposed to the merely comfortable) have a vested interest in pretending that income and asset shares don’t matter, so long as the welfare system can be used to subsidise the difference between the wages people actually need, and the wages business feel inclined to pay from time to time.
The truth is that we are seeing two interesting contradictions playing themsleves out. On the one hand, it is true that the income support doled out by government to families in particular has never been higher, and incidentally, has never been as generous, particulalry in relation to the absurd FTBB. On the other hand, costs associated with health, housing and education have never been higher for families and individuals, as the risks and costs associated with these important public goods become increasingly borne by individual households, rather then by the public sector. I suspect that it is this latter aspect of the general cost of living, together with the rise in overall inequality in both income and assets (which have risen over the past decade, but not at the same rate for all) which has produced angst and a feeling of grievance among numbers of people who on paper might look relatively comfortable, but who are actually shouldering more and more at higher than CPI costs, of goods and services which are not truly discretionary.
Clive Hamilton in my view has missed important structural changes in the economy in his analysis, and the CIS and their tools simply cannot be trusted with any proper and honest policy debate. They are far too partisan and have such an obvious axe to grind that their analysis and policy prescriptions can be safely ignored by anyone interested in the truth.
Interesting post, Greg. I more than agree with you that Clive Hamilton comes across as undercooked. Thus (even though it’s not a big deal), I query your choice of introductory words – Clive’s analysis as “provocative� and “stimulating� – when you sum him up (quite accurately, IMO) as lazy and blinkered.
Which words nicely segue into Peter Saunders’ comment:
“Why is it that the left keeps wanting to exaggerate the extent of poverty?�
I’m pretty sure that Clive Hamilton would generally be regarded as “left� – and Clive sure as hell ain’t one of the poverty *exaggerators* (this being the very point of Greg’s post). Indeed, despite Peter Saunders and Clive coming from nominally opposite political camps, I’d be fairly sure that Clive would concur with most of Peter’s comment, especially the priceless: “If poverty won’t reduce when there so much ‘economic sunshine’ around then when will it reduce?�
The answer here, of course, is when Australia gets a Left, or even vaguely-so, government (the last such one was Fraser, ending in 1983). No doubt Clive Hamilton would snicker at that typology, but when the boomer “Left�, like him, and the boomer Right, like Peter Saunders are falling over themselves in a game of mutual-backslapping and scapegoating of the real Left, all (conventional) bets are off.
For a decent analysis of just how backwards this country has gone under 20+ years of economic fundamentalism, I recommend an essay by (Xer) Elliot Perlman, “The human cost of economic rationalism”. Unfortunately, it’s not online (AFAICT) but it can be found on the DVD and in the published screenplay of “Three Dollarsâ€?.
As for Peter Saunders’:
“Left intellectuals know the public will not buy into [the socialist redistribution agenda], therefore they muddy the waters by talking about ‘poverty’ instead, hoping to win public sympathy for their high tax, increased state intervention agenda�.
The only such waters being muddied are by the boomer-Left/“Left�, like Clive Hamilton and anyone-who’s-anyone in the ALP. Real Left intellectuals hardly need to be told how to suck eggs, by the likes of Peter Saunders. And still less do real Left intellectuals, many of whom live in poverty themselves, need the swingeingly-ironic “downshifting�/“affluenza� homilies of Clive Hamilton.
EG,
A) “without lifting a finger” was not meant to be perjorative, but just to emphasize that earning under the $400 quoted in the article is pretty difficult when filling out a couple of centrelink forms puts a family of four on $645 a week.
B) “second-generation unemployed” was a gratuitous swipe at the deleterious long-term effects of an overly-generous welfare state, and was beside my main point (which was A).
I don’t know what the right minimum level is. $645 per week seems pretty high – if you’re careful you should be able to live on that, even with two kids. You wouldn’t save, but you should be able to make ends meet.
I’d rather see the minimum for a family of four at, say, $500 per week (where it gets a lot tougher to make ends meet), but dramatically lower the rate at which benefits are withdrawn so those entering the workforce see a lower effective marginal tax rate (EMTR).
Then there would be both carrot (lower EMTRs) and stick (lower benefits) encouraging welfare recipients into the workforce. With an EMTR of 30%, around 15 hours per week on minimum wage would raise the family’s income back up to $645.
Stoptherubbish,
Peter Saunders did not say they don’t matter. What he said was that poverty has not increased and is not widespread. If you are concerned about financial equality then you should feel free to make your case.
If everybody in a nation gets a ten fold increase in real purchasing power then it is stupid to say that poverty has not declined. However one should be free to observe that there is a change in financial equality (if in fact there is).
Those on the left of politics (I generally call them socialists) seem determined to confuse poverty with equality. This would seem to be a deliberate attempt to frame debates (about how we organise society and production) to favour their prefered socialist model.
In general free market capitalism in conjuction with the protection of civil liberties and property rights will decrease poverty. It may also increase financial inequality. We should not trivialise either of these outcomes. Nor should we confuse them as being the same thing.
Personally I think reducing poverty is a lot more important than increasing equality. However I can understand that some people may have an alternate set of preferences.
Regards,
Terje.
Defining poverty as half the median is pretty simplistic, but it is also ridiculous to suggest that if you’re not in the sort of poverty experienced in Africa you’re not poor. Try having a child who is the only one at school who doesn’t have a mobile phone, or certain toys and you quickly find out that relative poverty can be brutal too – we might expect adults to be mature enough to cope with being much poorer than those around them, but I don’t think its reasonable to expect kids to be drastically worse off than their peers.
And Dogz example convenietly leaves out single parents. I don’t know the figures, but annecdotally…last year I called up one of our staff to ask whether she was available for a bit of unexpected work. I could hear her hyperventilating down the line. She explained that that morning she had received an unexpected bill and had spent an hour crying on the phone begging for a discount or delay in payment, which had been refused. I told her not to get too excited – the work was probably going to only be $75 (gross). “Oh that’s fine,” she says, “The bill’s $40”.
This woman had literaly been unable to work out how she could pay a $40 bill without having her and her daughter skip meals.
And before some of the commentators on the list start speculating let me stress: She doesn’t smoke or do drugs, and she’d stopped drinking when she became unemployed. When she did get a job she had to frantically buy clothes because she’d bought nothing while unemployed/working casually. The only “luxury” she had was that she was renting a house close to public transport and quite central.
These days she’s doing fine (I believe) but she had more than 3 years of this kind of situation behind her, and as an ex-employer I can say it had nothing to do with a willingness to work hard – we used to have to force her to take lunch breaks.
That’s probably the most extreem example I can give, other than people who are partially responsible for their situation through drug use, but I can quote plenty of cases I find pretty distressing.
Evidence of poverty – the number of beggars on the streets in large cities, or people scouring the bins for scraps. This is a relatively new phenomenon and one I didn’t observe prior to the Howard years.
The level of homelessness due to society leaving housing to market forces has increased as have the people who would be described by most as feral.
We have a real underclass who may be able to get out of poverty but are unlikely to as they are mad, bad or buggered. The statistics used seem to be ever manipulated to suit the argument. However the evidence that is observable makes a mockery of those who argue that poverty is non existent in Australia.
Poverty may not be permanent but when families have to make a choice between buying milk and bread for all or medicine for a sick child it is poverty none the less. The arguments of the contributors above largely illustrate how well the “Bugger you Jack” ideology has replaced that of providing opportunity to all to build a stronger society.
I don’t have statistics but when I moved to Sydney in 1989 there were drunk beggers everywhere. Since then things have improved a little in so far as less of the beggers seem drunk these days. And they seem more literate and efficient with hand written signs instead of verbal requests.
I don’t want to trivialise homelessness but it is hardly a new problem.
If, on $645 per week, you’re forced to make a choice between a $4.60 prescription (the cost of all precriptions with a healthcare card, assuming you haven’t already exceeded $239.20 for the year, in which case they’re free), and a similar amount for a loaf of bread and 2 liters of milk, then it is more a problem of budgeting than poverty.
Nope, the arguments largely illustrate how well “Bugger you Jill” realism has prevailed over the muddle-headed idealism of the hard left.
“Personally I think reducing poverty is a lot more important than increasing equality.”
I agree. Has Australia experienced the family breakdown and subsequent fatherlessness in the home that throws so many American families into poverty?
Terje says:
“Those on the left of politics (I generally call them socialists) seem determined to confuse poverty with equality. This would seem to be a deliberate attempt to frame debates (about how we organise society and production) to favour their prefered socialist model.”
“In general free market capitalism in conjuction with the protection of civil liberties and property rights will decrease poverty.”
I don’t know what those ‘on the left’, or ‘on the right’ or ‘up’ or ‘down’ do. But I do know, Terje, that your reference to ‘free market capitalism’ is totally irrelevant because the micro-economic reforms during the past 20 years were not promoted under the banner of ‘free market capitalism’ but under the banner of ‘market economics’.
I can see that the notion of ‘absolute poverty’ would be convenient for those who wish to attach a label as cover for their ideology to complex histories of countries and their interrelationship over many centuries to arrive at conclusions they want to have. But such an exercise is unlikely to fool a lot of people because they are no fools.
So, whether you like it or not, the theoretical models of ‘competitive private ownership economies’ do not assign a privileged position to ‘capital’, ‘private ownership of the means of production’ (ownership of production technologies) is not excluded but turns out to be not crucial, and the ‘minimum wealth constraint’, which features in all proves of existence of a solution to the models, makes a much stronger requirement on wealth distribution than might suit the arm chair theorists (ideologues?) of ‘free market capitalism’. However, these models take the economic aspects of ‘personal liberties’ and ‘property rights’ seriously.
“If you are concerned about financial equality then you should feel free to make your case.”
No, Terje, there is no need for anybody who observed ‘micro-economic reforms’ to make a case along the lines you suggest. But, the onus is on you to justify why you wish to retrospectively change the ‘rules of the game’, namely to substitute an ill defined ideology for a policy agenda that was clearly linked to ‘market economics’.
Ernestine,
You seem to put a lot of energy into dealing with remarks that are totally irrelevant.
You seem to characterise it as an act of deception. I would suggest that it is an act of clarity. However you can make it a semantic argument if you wish. I personally think that the word “poverty” has become uselessly debased by the likes of yourself. If you think that the absolute truth of your prefered model proves otherwise then please feel free to enjoy your delusion. I think you should get out more.
Regards,
Terje.
Peter Saunders’ attribution of a “high tax, increased state intervention
agenda” to the “left” seems anachronistic. The 1950s are over, and so is the cold war. This sort of rhetoric might appeal to wrinkled ANZACs, but is gobbledegook to those who have seen obviously non-socialist governments enthusiastically raise taxes and increase state intervention on a large scale over the last 20 or 30 years.
The argument over what constitutes poverty has been going on ever since (at least) the Henderson inquiry. We have half-median, half-mean, updated baskets and variations on these themes described by Greenwell et al. in the 2001 NATSEM discussion paper no. 55. We could sit down and argue these points again, but at some point we should all ask ourselves at what level of income we would regard ourselves as poor.
Terje,
In reply, I’ll borrow an expression by Katz: “If I want a sermon I’ll go to church.”
Ernestine,
Likewise.
Regards,
Terje.
With relative measures of poverty we could have a major civil war, destroy half our nations infastructure, wipe out vast amounts of productive capital and disrupt peoples working lives and at the end the relativists measure of poverty could indicate a decline in poverty.
We could find the highest income earner in every street and cut off his/her left hand and this would lead to a decrease in poverty according to those that subscribe to relative measures.
“With relative measures of poverty we could have a major civil war, destroy half our nations infastructure, wipe out vast amounts of productive capital and disrupt peoples working lives and at the end the relativists measure of poverty could indicate a decline in poverty.
We could find the highest income earner in every street and cut off his/her left hand and this would lead to a decrease in poverty according to those that subscribe to relative measures. ”
I don’t understand the foregoing. By contrast I am familiar with the concepts and measurements of:
a) Wealth distribution, given local prices
b) Income distribution, given local prices
d) Poverty line, given local prices
e) Time series of wealth distributions, given local prices
f) Time series of income distributions, given local prices
g) Time series of povery lines, given local prices
h) Total wealth of a local economy, at a point in time, given local prices
i) Time series of total wealth of a local economy
j) Cross-sectional comparisions (across local economies) of total wealth, wealth distribution, income distribution, poverty line.
k) Time series of cross-sectional comparisons as listed in j.
l) Survival constraints.
There are empirical examples where war has resulted in the destruction of vasts amount of physical capital and infrastructure and, due to rationing mechanisms, nobody died of starvation (is survival constraint was not violated). There are other examples where small amounts of physical capital and infrastructure were destroyed by civil war but many people died of starvation.
It seems to me the term “relativists measure of poverty” has been invented for the purpose of arguing against it – a strawman.
Dogz,
It seems that there are a lot of assumptions built into your vision of problems with budgetting.
The level of income, the health care card are all known. There are systemic impediments to this vision. I assum that you don’t actually have to feed or look to the health of any children and that poverty is a theoretical notion.
Absolute poverty exists in Australia whether it is the result of too many bills and not enough cash or poor decisions which results in people not turning on heating and then ending up in the emergency ward. Children are unable to learn when they go to school hungry – perhaps the parent put the need for medicines or new shoes earlier in the week as a priority and there is nothing left.
It is perfectly possible to construct straw men in order to demonstrate that poverty is non existent – but the evidence speaks for itself and diminishes us as a society if we fail to address it. Blaming the individuals rather than the systems within which individuals operate does allow the well off to smugly look down on the under classes.
Ernestine,
Poverty (as currently defined by the left) is indeed a strawman. One that the left takes great pride in mobilising against. It is a pity they don’t have more constructive things to do with their time.
Regards,
Terje.
Terje,
Given the information available to me on this threat, I deduce that it is Peter Saunders and you who constitute ‘the left’.
Pitty that you joined ‘Saunders’ left’ for your reply to Smith, “If we used PPP (purchasing power parity) to compare the job of an Australian waiter in 1988 and PPP to look at the situation for an Australian waiter in 2006 then we might get a better sence of whether things are better or worse.” looked like a sensible first step to use relative prices to get some answers to socially relevant questions. Perhaps you might even look favourably upon the suggestion that technologically induced changes in ‘society’, such as the wide-spead usage of IT in education and in daily life, require some further considerations. Beyond that, it gets technical because of index problems.
Regards
Ernestine
QUOTE: Given the information available to me on this threat, I deduce that it is Peter Saunders and you who constitute ‘the left’.
RESPONSE: Now your just trying to be a clever dick. The labels “left” and “right” are shorthand and like all such labels require assumed knowledge. I could waste time arguing about these labels but it’s not the core of the issue and it wouldn’t be that constructive anyway.
QUOTE: “If we used PPP (purchasing power parity) to compare the job of an Australian waiter in 1988 and PPP to look at the situation for an Australian waiter in 2006 then we might get a better sence of whether things are better or worse.� looked like a sensible first step to use relative prices to get some answers to socially relevant questions. Perhaps you might even look favourably upon the suggestion that technologically induced changes in ’society’, such as the wide-spead usage of IT in education and in daily life, require some further considerations.
RESPONSE: I am glad you found my point agreeable. And I am all for sensible refinements, even though I must admit to not understanding your point about IT in education etc. Perhaps you can clarify.
I accept entirely that any economic measure of poverty should be made in terms of income “relative” to the local cost of goods. It should be about the individuals power to consume. This is not the sence in which I criticise poverty measurements as being “relative”.
My criticism of “relative” measures is a criticism of measures that merely compare us to our neighbours and reclassify us as impoverished just because our neighbours have moved ahead quicker then we have. If my power to consume is unchanged I should not be regarded as suffering more poverty just because my neighbours have increase their power to consume.
For a clearer definitions of “absolute poverty measures” verses “relative poverty measures” the following reference might help:-
http://en.wikipedia.org/wiki/Poverty_line#Absolute_poverty
Rather than bang on about the distinction between poverty and inequality or about where the poverty line ought to be, it might be more interesting to make a couple of observations about some related issues and about the debate itself.
(1) The very high incidence of poor people (or poor households, if you prefer) who have at least some paid employment but who are still heavily dependent on welfare is worrying. We seem to have abandoned the idea that everybody should be able to live and raise a family by working.
(2) There is often a self-righteous tone adopted by people who perhaps like to think of themselves as part of a political or policy “elite�. Such people have a tendency to depress the poverty line on grounds which are seldom articulated but which seem strangely reminiscent of mid-Victorian ideas about the “virtuous� as opposed to the “sinful� poor. You get assertions like “They’re not really poor – look, they’re buying beer and cigarettes!� This tendency is well illustrated by several of the comments already made here. The vulgar version is, of course, “dole-bludger-bashing�, brought to an art form by TDT. In the modern world, where everybody has heard of the amazing upward spiral of CEO pay and everybody has also heard of tax avoidance schemes and of OneTel, HIH, Rod. Adler and Jodee Rich (let alone the even juicier US examples), this attitude simply falls flat. In mid-Victorian days, newspapers were far more reticent about scandal and corruption among “the Quality�.
(3) One way of excusing the existance of poverty in wealthy societies is to assert that social mobility allows talented people to rise out of poverty, so that the remaining poor are actually doomed to poverty because of their own inadequacies. Though in principle this is a testable assertion, in common use it is often circular (How do we know that the poor are stupid and lazy? Because they are poor!). This is actually a close relative of old-fashioned racism (How do we know blacks are stupid and lazy? Because they are poor!). And following the racism analogy, I suspect it won’t be long before it is admitted that people born into poor working-class households really don’t have much chance of social mobility – they’re just “different from us�. But they are happy, in their own little ways!
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Terje,
1) “Now your just trying to be a clever dick.”
I suppose this your way of saying you couldn’t find an error in my conclusion.
2) “My criticism of “relativeâ€? measures is a criticism of measures that merely compare us to our neighbours and reclassify us as impoverished just because our neighbours have moved ahead quicker then we have.”
What is the point? Presumably you are not affected by how someone else classifies you. If you don’t feel impoverished when your neighbour has moved ahead quicker than you (whatever that might mean), then this is fine. Nobody forces you to change your perceptions about yourself.
3) wiki reference to ‘absolute poverty’. The ‘definition’ is totally irrelevant for local policy discussions (eg Saunders’ writings). It might have some use for specialists in development economics, although I can’t think of one. The definition requires that all goods and services are equally distributed all over the world and all transactions involve money. This is not the case in reality. For example, North African nomadic people survive by ‘consuming’ mainly dates (fruits from palm trees) and products derived from their main asset, camels, and knowledge of un-incorporated sources of water. There are neither camels nor dates in say North Korea (and sending camels and dates might not help the poor in North Korea either).
So, a more sensible (related to reality) measure of poverty includes not only local prices but also locally available goods and services.
These change over time (‘technological progress’). If ‘technological progress’ is thought of as a ‘good thing’ then why should it be a ‘good thing’ only for some people but not for others (eg application of IT learning).
In the so-called developed countries, the variables that enter the calculations of ‘poverty line’ are correlated with income distribution. The people who designed these measures were no fools.
I suppose as a member of the political arm of some party (I forgot the name) you can’t help attributing all sorts of beliefs or preferences to me. You are wrong on all accounts. You have no information about my beliefs or prefences for any model. I made sure of that.
Gordon’s post provides further food for thought.
If it remained an abstract concept then it would not bother me. However once it becomes a propoganda tool to advocate policies it is another matter.
No they are not fools, just ideologically blinkered. I am so pleased that somebody such as Peter Saunders is willing to take the time to expose that ideological bias.
Are you suggesting that I have no free will? Kind of like a political zombie controlled by evil forces external to myself.
1.”[What is the point? Presumably you are not affected by how someone else classifies you. If you don’t feel impoverished when your neighbour has moved ahead quicker than you (whatever that might mean), then this is fine. Nobody forces you to change your perceptions about yourself. ]
If it remained an abstract concept then it would not bother me. However once it becomes a propoganda tool to advocate policies it is another matter. ”
I may agree with you on this one. I’ve come across a speech given to the CIS a few years ago in which it was suggested that people who don’t agree with wealth inequalities that are the outcome of a ‘free market’ are jealous of others who have more wealth.
“No they are not fools, just ideologically blinkered”
Why?
“[I suppose as a member of the political arm of some party (I forgot the name) you can’t help attributing all sorts of beliefs or preferences to me…]
Are you suggesting that I have no free will? Kind of like a political zombie controlled by evil forces external to myself.”
I don’t know.
Why are you attributig beliefs and preferences to me?
If you can point out where I attributed a belief or preference to you, then I will try and explain why I did it.
Terje,
1. “No they are not fools, just ideologically blinkered�
Why?
2. As to your request for a reference to your writing: “I personally think that the word “povertyâ€? has become uselessly debased by the likes of yourself. If you think that the absolute truth of your prefered model proves otherwise then please feel free to enjoy your delusion. I think you should get out more.”
1. They define certain people as impoverished when no traditional usage or lay usage of the word would ever consider those people as being in poverty. They betray the tradition of the word “poverty”. They may not be ideologically blinkered however to date I have not been able to identify any other reasonable motive. Using Occam’s razor I stick with the most obvious conclusion until some better alternative presents itself.
2. I used inference to assume that you believe that measuring poverty in a relative manner (relative as in X is poorer than most people in the neighbourhood so X is necessarily in poverty) is an appropriate use of the word (ie consistend with traditional notions of poverty). If my inference is correct then my statement stands. If you wish to refute my assumption then I may retract my statement.
I attributed a belief or preferences to you because it seemed (to me) to be self evidently true. I don’t know your inner mind and I have not had the opportunity to observe your behaviour. Hence I can only determine what you believe or what your preferences are by inference from the things you say. I expect (perhaps ambitiously) that if my inference is wrong you will use subsequent dialogue to demonstrate how that my inference was wrong. So far the things you have said merely reinforced my intitial inference.
You seem to make similar inferences about me. For instance you seem to read a lot into the fact that I am a member of a political party (LDP).
“I attributed a belief or preferences to you because it seemed (to me) to be self evidently true.”
In the tradition of the Spanish Inquisition?
No actually. In the spanish inquisition you would not have had many viable means to refute the attributed belief. If you feel that the inference made is incorrect then you are free to correct my assertion.
And in any case you are quick enough to make your own inferences about others.
I learned a bit about the set-up and methodology used by the LDP. I’ve reached the conclusion that I’ve seen enough. Thanks for the hint on the other thread.
Happy Easter
Cheers. Happy Easter to you and yours also.