Patterns of Wealth and Poverty
Throughout history there have always been those who have it, and those that don’t. Yet how do we distinguish between the two groups? There has been a number of ways thought up, such as if a families total earnings are sufficient to obtain the minimum necessity’s to live without extra spending. Another theory is that instead of defining the poor as those who income is too low, they are poor if their incomes are considered too far removed from the rest of the society in which they live. But many believe that poverty refers to a variety of conditions involving differences in home environment, material possessions and educational and occupational resources as well as financial resources. One can also compare the wealth of different nations. You can measure the Gross National Product of a country and then class it as rich or poor, but this does not show the distribution of their wealth. You can also show the human development index, which takes into account such things as literacy rates, access to health care, and life expectancy.
The Way in which people view the world, among other things, is influenced by your position in society and your wealth. Those who live in the rich industrialized countries of the north have labeled the twentieth century as an era of economic miracles. Since the beginning of the twentieth century the average value of goods and services has risen by about 20 times, while the products of industry have grown 50 times. In 1989 there were 157 billionaires and 2 million millionaires. There are now 233 billionaires. The poor see it a different way. There are 100million homeless, 400 million people undernourished, and two billion people drink and bathe in contaminated water. The poor also suffer from environmental damage done by the wealthy.
Economic Inequality:
In 1960 it was stated that the wealthiest 20 per cent of the population were 30 times better off than the bottom 1 billion. In 1995 they were 150 times better off approximately. Karl Marx believed that the rich elite linked inequality in to unequal property rights and exploitation of labour. The neo-classical-economists of the early nineteenth century recommended that income should be related to productivity or who gets what depends on who owns what. This new theory didn’t solve inequality.
Nowadays the developing countries get done over by the developed countries on an international, national and local scale. Internationally they face adverse effects from being unequal partners in the world market and trade agreements. They are also affected by trade unions in industrialising countries as well as declining terms of trade. They get affected on a national scale as few resources trickle down from the rich to poor, causing inequality within these countries. This can be measured by the Lorenz curve at the end of this report. On a local scale there are often inequalities in the tax system. Infrastructure and regulations favour the rich few over the poor majority.
Causes of Economic Inequality:
Poor people are unable to satisfy their basic needs such as food, water and shelter, while rich people are able to satisfy their basic needs as well as afford additional comfort goods. This gap between the rich and poor is extremely important and must be solved. The poor are a wasted, valuable human resource when they are unable to have adequate education to contribute their skills and thoughts to society. If this gap continues to expand then social unrest can occur which can result in strikes and riots. There are many reasons why inequality exists, for example the normal functioning of a capitalist economy means that there will be inequality as do government economic policies. There are also always discriminatory policies regarding gender and races and changes in housing markets and the effects of urban structure all contribute to inequality. There is often people who have rich parents and so receive wealthy inheritances. These are just a few of the reasons.
Absolute poverty:
Poverty is far more than economic. The horror of poverty extends to all aspects of life including susceptibility to disease, limited access to most types of services and information, lack of control over resources and subordination to higher social and economic classes. Over 1.2 billion people or 23 per cent of the world’s population live in absolute poverty. Absolute poverty is described as the lack of sufficient income received in cash or alike to meet the most basic biological needs of food, clothing and shelter. Absolute poverty is estimated as only receiving between $50 and $500 per year depending on price changes and access to goods and services. Another more colloquial response is that “absolute poverty is a condition of life so characterised by malnutrition, illiteracy, disease, squalid surroundings, high infant mortality rates and low life expectancy as to be beneath any reasonable definition of human decency.” The reason for this is partly due to rapid population growth, falling commodity prices, rising unemployment, growing international debt, environmental degradation and an increasing share of income into the hands of rich landlords and T.N.C’s.
Poverty at a Variety of Different Scales
The causes of poverty begin at a local, national, and international scale. Major policy changes are required from the global scale to the local village to eventually reduce poverty.
Local Scale:
The absolute poor in developing countries include landless peasants, agricultural labourers, tenant farmers, sharecroppers working on farms in marginal areas, and the unskilled urban poor working in the informal sector. The number of absolute poor in developed countries is ever increasing although currently it is lower than those in the developing countries are. There are increasing numbers of unskilled, unemployed youth that is creating many social problems. Food, clothing and shelter are being increasingly provided for by charities. Because of this many governments have had to spend more money on unemployment benefits. The poor have little access to property or capital and they also own small, fragmented, unproductive farms at a local scale. They have higher rates of unemployment and underemployment as over 40 million people enter the work force yearly. They have little power against corrupt institutions and prevalence to diseases, which results in physical weakness.
National Scale:
At a national scale, government tax policies and preparation of infrastructure frequently favours the small rich minority. The president of Cote d’Ivoire recently completed construction of a $200 million air-conditioned Catholic cathedral decorated with French stained glass and Italian marble, the church is located in an impoverished country whee only one-tenth of the population is Catholic. At a national scale governments tend to favour development of urban areas over rural areas leading to regional inequality. Subsidised urban hospitals get a much greater proportion of public health funds. This leads to increasing expenditure on the rich few whom are the ones who need it the least, and so ignores the rural majority and their health care needs. Between 70 per cent and 85 per cent of public health funding is spent on expensive curative care and the smaller remainder is spent on preventative care. The incapacity of the rural sector to provide adequate incomes or facilities has been one of the major reasons for rapid rural-urban migration in most developing countries. The rate of population increase in many urban areas is greater than the government can build schools, housing and clean water. This leads to increasing unemployment and underemployment, squatter settlements, growth of the informal sector and underpaid and exploited unskilled labour.
Global Scale:
As stated in a report released by the United Nations on the 9 September the global economy is only helping to increase the gap between the rich and the poor. Therefore the economy that needs adjustment is the global economy. Until that happens any structural adjustment will be little better than “rearranging the furniture inside the debtors prison.” On a global scale the developing world has 75 per cent of the population but only 17 per cent of GDP. The large scale logging of forests and the mining of minerals has resulted in a major movement of natural resources from developing to developed countries. Commodity prices also moved against the poor during the 1980’s as the prices of 33 commodities fell 40 per cent between 1980 and 1987. Increasing trade barriers by rich countries caused a decrease in export prices from poor developing countries. For example the E.U. levied a tariff four times higher for imports from poor countries than from rich industrialised countries on cloth. The World Bank says that tariffs cost developing countries between $50 and $100 billion in lost sales yearly.
How Poverty Affects the Environment:
Ozone depletion, acid rain, enhanced greenhouse gases and increasing radioactivity are all products of increasing wealth. But poverty is also increasing environmental degradation and overexploitation of mineral resources. Resources have been overused due to the high rate of exploitation. A continuing downward spiral of economic degradation exists. Poor people must sustain the place in which they live for their “food comes from the soil, water from the streams, fuel from the woods, fodder from the pastures and fruit from around the hut.”
Geographic concentration of poverty in inhospitable areas is occurring. In Washington 47 per cent of the absolute poor live on marginal lands. In the USA “the poorer the neighbourhood and the darker the skin of it’s residents, the more likely it is to be near a toxic waste dump. Hundreds of millions of people currently suffer from desertification, deforestation, fuelwood scarcity, salinity, soil erosion, air and water pollution. Green house gases will adversely affect many poor people. Many of the world’s most productive agricultural areas could suffer higher temperature, decreased rainfall or both, which will increase the rate of crop failure many times over.
Solutions to Inequality:
It has been said that the redistribution of income from the rich to the poor could increase the quality of life of the poor, as the utility of the last dollar received by the rich was less than the utility of the same dollar received by the poor person. From the global to the local scale, public and private institutions have tried countless initiatives to try and reduce poverty. True development does not simply provide for the needy but it enables them to provide for themselves. This can occur by increasing self help groups. Today their collective membership is hundreds of millions. Land reform, basic needs infrastructure, welfare systems, employment programs, minimum wages, compulsory free education all could help solve poverty. Ending poverty means the government must implement many small schemes instead of large schemes such as highways and damns. Kerala, a small village in India managed to successfully eliminate inequalities. Land reform gave 1.5 million people land. The people there have access to health care and schools. Increased literacy in women resulted in improved health of families and land reform allowed the poor to increase their incomes and increased credit to the poor allowed them to purchase essential livestock and tools. Family planning has improved the birth rate and clean water and primary health care reduced diseases and death’s.
Chris Laurent
Bibliography:
Bliss. S. and Paine. J. 1997, Pathways to Geography; Development Geography. Macmillan Press.
Jackson. B. 1994, Poverty and the Planet. Penguin Books.
Ternowetsky. G. W. 1980, Intergenerational poverty life styles and income maintenance; An analysis of the cultural and situational views of poverty. Australian Government Publishing Service, Canberra.
This report is 2050 words long.
Geography
Individual Research Project
Year 10
Patterns of Wealth and Poverty
Chris Laurent
Contents:
Introduction 1
Economic Inequality 1
Causes of Economic Inequality 2
Absolute Poverty 2
Poverty at a Variety of different scales 2
Local scale 2
National Scale 3
Global Scale 3
How Poverty Affects the Environment 4
Solutions to Inequality 4
Bibliography 5
Abstract:
The report starts out defining the different types of poverty. It then explains how the world and the past decade have been different depending on where you stand. It then goes on to state numerous reasons for economic inequality. It then gives an example of a different type of poverty other than economic. It states the differing levels where poor people get the short end of the stick and shows how poverty can affect the environment and how poor people usually live in the least hospitable places. It then concludes by giving some solutions to solving inequality.