Why do we tolerate poverty?

It’s bad reasoning, not human nature, that blinds us to the predicament of the poor
April 23, 2014

Slum children scavenge in a dried-up creek in Mumbai. More than a third of India’s population survives on less than a dollar a day.

© Reuters/Arko Datta

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For a person born in India, persistent encounters with poverty are inescapable. By the time I was nine, I had come to see poverty as a fact of life, even though I had not yet fully grasped how appallingly nasty extreme poverty could be. It was in my 10th year that the Bengal famine of 1943 erupted—four years before the end of the Raj—and the streets were suddenly full of dying people. Along with that came the inhumanity to which the famished destitute tends to descend.

I came from a middle-class, academic family; we were stretched but not endangered. I was allowed to give a small amount of rice to anyone who came to our door, but felt very sad that we could not give more. Seeing the starving men and women quarrelling with each other for their own share was as demeaning as it was disturbing. I remember an occasion when I was able to give a banana to an extremely emaciated woman with a severely skinny child on her lap. After peeling the banana, she instinctively put it into her own mouth, and then immediately pulled it out, and burst into a piercing cry, bathing her emaciated face in tears, as she gave the banana to her child. She looked at me, confused and lost, and said, “We are no longer human beings—our instincts are now worse than those of animals.”

If poverty is intolerable, it is not just because serious deprivation makes our lives precarious and dreadful, but also because extreme poverty can rob us of the normal human feelings that we tend to have. Given the nastiness of extreme deprivation, and the wealth of the world, there is some difficulty in explaining how poverty is an accepted predicament of so many people across the world. While the incidence of poverty varies from country to country, there is no country that is free from it: the question of why we tolerate the intolerable has relevance for every country in the world.

Blaming the victim is as common today as it was in the days when very mild attempts at poverty relief, such as the English Poor Laws, had their staunch opponents. It is not, however, easy to see how the army of the unemployed and the destitute can readily reverse their own predicament, without extensive social and economic change. But what about people who are not severely deprived? How do so many reasonably secure people come to terms with the gruesome suffering around them? There is something here that surely demands an explanation.

We can consider three possible explanations that might have some plausibility. There is, first of all, the hypothesis of ignorance—the possibility that we do not really know with adequate clarity what poverty is like and how prevalent it is around us. In this line of explanation, we tolerate the terrible states of affairs unknowingly—at least without adequate understanding.

A second line of explanation focuses not on ignorance, but on a possible belief that poverty cannot, in fact, be removed or substantially reduced—no matter how hard we try. Along with this line of reasoning there can be some diagnosis of what is seen as “realism” about the impossibility of curing—or even substantially reducing—poverty. The so-called realists often spend a lot of time on this issue—not in trying to remedy poverty (a hopeless task, in their view), but in criticising those whom the self-identified realists see as hopelessly “romantic,” who attempt to do what cannot be done, and in the process (the “realists” argue) often make the world actually worse.

A third line of explanation takes the very different route of postulating that human beings are basically self-centered creatures who do not worry about others. Going further, some argue that there is, in fact, no compelling reason why others should have any moral obligation to help remove deprivation unless they are themselves responsible for the condition of the deprived.

In discussing the arguments involved, I shall use the example of India, focusing particularly on the slow removal of poverty and deprivation in that rapidly growing economy. India provides a good illustration of a country with much poverty but also a numerically large middle class whose tolerance of poverty is a big factor behind the amazingly slow progress in reducing poverty levels.

I begin with the explanation of tolerance through ignorance. India’s poverty is no secret—indeed very few social facts have been as much discussed as poverty in India. That was not always the case: the founder of modern economics, Adam Smith, included India in general and Bengal in particular as being among the richest countries in the world. He even attempted to give, in The Wealth of Nations, an explanation of the prosperity of this part of the world by invoking its abundant use of trade and exchange (partly connected with its well-developed river navigation, in addition to sea trade), and referred to its “exportation of a great variety of manufactures” (paying particular attention to its flourishing textile industry).

India may well have been a relatively rich country in Smith’s time. Some recent empirical studies, for example by Prasannan Parthasarathi (Why Europe Grew Rich and Asia Did Not: Global Economic Divergence 1600-1850), tend to confirm that view. However, there can be little doubt that the proportion of the poor in India grew quite steadily during the period of British rule. Indeed, during those centuries, when much of the rest of the world, particularly the west, was rapidly progressing, GDP in India seemed to move hardly at all. During the last half century of British rule, when there was some expansion, India’s GDP per capita grew at the amazingly low rate of 0.01 per cent per year. As Angus Deaton, a leading econometrician and development economist, has argued in his recently published and authoritative book, The Great Escape: Health, Wealth, and the Origins of Inequality: “It is possible that the deprivation in childhood of Indians born around midcentury [at the time the Raj ended, in 1947] was as severe as that of any large group in history, all the way back to the Neolithic revolution and the hunter-gatherers that preceded them.”

Things have moved on since then (as Deaton has noted), and India’s income today, even after correcting for inflation, is about five times what it was per head when India became independent. However, its income level is still very low in absolute terms. Furthermore, there are huge numbers of people among the Indian population who not only have very low income, but whose opportunities for healthcare, education and social security are dreadfully inadequate.

Yet the Indian middle class, with comparatively comfortable lives, is quite large, consisting of 200m (according to some criteria, perhaps even 300m) relatively well-off people. They may not be very rich by western standards, but do all right in terms of modern facilities as well as traditional comforts.

One result of having such a large—and dynamic—middle class is that their dominance has had a huge impact over the priorities and coverage of the Indian media, both print media and broadcast channels. This may have made Indian newspapers, television and radio remarkably lively, but one consequence of the glitzy focus is the crowding out of the ugly facts about India’s extensive poverty from media coverage and public reasoning.

As it happens, India has taken a huge stride forward in terms of the availability of information through its remarkably extensive Right to Information Act, giving anyone access to a huge variety of information involving public affairs, if and when any such data are formally requested. But this has not brought the unusual severity of the deprivation of India’s vast army of the poor into the political consciousness of the vocal and influential public. Having knowledge is not merely a matter of unrestricted availability of information when sought.

Income data do, of course, bring out how poor most Indians still are, but to add to the complication in informational reach, the poverty of most Indians relates also to meagre and bad healthcare, limited and low-quality schooling, and other deficiencies of public services in a way that is far more intense than in many other developing countries—from China and Brazil to Thailand and Indonesia. An exclusive concentration on private incomes misses the role of public services in education, healthcare, social facilities and environmental support, which can make a big difference in protecting people from deprivation and expanding their freedoms.

Elementary facilities such as a decent school, an accessible hospital, a toilet at home or two square meals a day are missing for a huge proportion of the Indian population in a way they are not in, say, China or Thailand. Yet there is very little general understanding of how out of line India is in international terms in having such meagre public facilities for poverty removal, even compared with other poor countries (as the empirical analysis presented in the book I wrote last year with Jean Drèze, An Uncertain Glory: India and Its Contradictions, shows).

If India is out of line compared with other countries in its neglect of the persistently deprived, it is worth recalling that it is also out of line with the rest of the world in having a longstanding and pernicious caste system. It is hard to think that these two phenomena are not connected, particularly since a huge proportion of the disadvantaged families in contemporary India come from low castes. Yet the temptation to find an adequate explanation of the persistence of disadvantage solely in terms of the history of the caste system would be an error. For one thing, there are other disadvantaged social groups, such as poorer Muslims, and much more severely, the tribal groups. But no less importantly, the Indian state that has done most for sharing the benefits of schooling and health care for all is Kerala, which had an unusually strong form of caste system—perhaps the strongest in India—with the severest practice of untouchability. The socially radical movement that began transforming Kerala in the 19th century originated as an anti upper-caste initiative, with a particular focus on providing the benefits of education to the lower castes. Even the powerful Communist Party, which won the state elections in 1957 and proceeded to try to complete the social transformations initiated in the previous century, was largely an off-shoot of that anti upper-caste movement. Something similar happened in the state of Tamil Nadu, with its history of strong caste barriers and anti upper-caste movements, and its relative success in the achievement of schooling and healthcare today. It is interesting that the states with the strongest forms of caste division have led the country in egalitarian sharing of education and health.

So the impact of the traditional caste system on inequality in modern India is, to a great extent, contingent on the nature of the political developments in different parts of India. More sociological research is needed into these regional variations, but for India as a whole the barriers of the caste system have made it harder to turn the predicament of the disadvantaged into a focus of public reasoning in general, and of the mainstream national media in particular. The silence of the Indian media on the subject has been deafening, and that has played a gigantic role in keeping the population grossly uninformed and oddly complacent about the extreme nature of social inequality in India.

I turn now to the second line of explanation: belief in the unremediability of poverty. Many people take the existence and high incidence of poverty as a fact about which little can be done. However, the hypothesis of inescapability is very difficult to defend on empirical grounds, since major reductions in poverty have been accomplished across the world—from Europe and the USA to east Asia and Latin America—through determined human efforts (Angus Deaton’s book provides a good understanding of how “the great escape” has been achieved).

A weaker version of this scepticism takes the form of arguing in favour of single-minded concentration on high economic growth, without having to do anything directly about poverty reduction. Underlying this attitude is the increasingly popular belief that rapid income growth, even without anything else, is the quickest and most effective way of cutting down the incidence of poverty and deprivation. How sound is this rather comfortable view that absolves society from doing things directly for the poor?

It is correct to argue that an important part of any serious and large-scale programme of poverty removal must include the cultivation and sustaining of economic growth. It is also right to expect that some improvements in the lives of the disadvantaged would tend to occur almost invariably with economic growth, as employment and entrepreneurial opportunities expand, particularly for those who are not prevented from seizing these opportunities by ill health, lack of schooling, social barriers or other disadvantages. However, public support for the underprivileged is extremely important in helping them to overcome disadvantage and in ensuring that the fruits of economic growth are shared widely. Without it, a great many lives will continue to be tormented by hunger, poverty, illness and other deprivations, despite spurts in aggregate economic growth, from which the neglected groups could, in many circumstances, get very little help. This has indeed been happening spectacularly over the recent past in India, with its falling behind—in many cases much further behind—a number of developing countries in terms of living conditions, even as it has overtaken them in economic growth.

Schoolchildren in a fishing village in Jiangsu province: “China’s experience shows that devoting more public revenue to education can be helpful for sustained economic growth” © Michael S. Yamashita/National Geographic Society/Corbis

An important understanding that has emerged quite powerfully from studies of international experiences is the recognition that the constructive use of public resources generated by economic growth to enhance human capabilities contributes not only to the quality of life but also to higher productivity, and further economic growth. In fact, the so-called “Asian experience,” beginning with Japan in the late 19th century, then South Korea, Taiwan, Singapore and eventually all of China, has been based on exploiting the relationship between economic expansion and growth on the one hand, and human advancement through education, healthcare, better nutrition, and other determinants of human capability on the other. This is a two-way relationship, of which relatively little use has been made by India, thereby ensuring not only that the country has fallen behind in terms of quality of life and living standards, but also making its long-run growth more fragile and less widely shared than it would have otherwise been.

There is some tragic irony here. Insights about the intimate connections between health, education and productivity were not at all absent from the visions of the pioneers of economic and industrial development in India, such as Jamsetji Tata. As Tata’s biographer, FR Harris, describes his conception of industrialisation, “from the time of driving in the first stake, the Iron and Steel Company assumes the function of a municipality”—focusing on free healthcare, decent schooling, provision of safe water and basic sanitation for all, among Tata’s other industrial and social initiatives. A clear understanding of the complementarity between production and productivity, on the one hand, and human well-being and capability-formation, on the other, was also powerfully articulated in the famous report of the Bhore Committee on health policy that nationalist leaders commissioned for the future independent India, as the Raj was coming to an end in 1946: “If it were possible to evaluate the loss, which this country annually suffers through the avoidable waste of valuable human material and the lowering of human efficiency through malnutrition and preventable morbidity, we feel that the result would be so startling that the whole country would be aroused and would not rest until a radical change had been brought about.” Alas, the country has not been “aroused” by the continued neglect of health and education and other public services; on the contrary, this neglect and its far-reaching consequences have received little attention in public discussions over more than six decades of the functioning of independent and democratic India.

The media coverage of how much the government spends on enhancing the lives of the Indian poor has been extraordinarily distorted. Reading the constant repetition in the press of critcism of the government for its “fiscal irresponsibility” in introducing some minimal employment guarantees in rural areas and some food subsidies for the poor, one would not guess how much larger is the amount spent by the same government on subsidising the good lives of the relatively prosperous classes. In terms of the latest available figures, India spends at least 1 per cent of GDP subsidising electricity for those who have power connections (nearly 400m people do not have any), 0.66 per cent of GDP on fertiliser subsidy that mainly benefits the rich farmers and 0.97 per cent of GDP on providing subsidised diesel, cooking gas and other petroleum products for those who have equipment for their use (not excluding luxury sedans driven by the very rich). These items together, even ignoring other forms of subsidy for the rich, come to a total of 2.63 per cent of GDP.

Compared with that, the government spent 0.85 per cent of GDP in providing food subsidy and 0.29 per cent on employment supplementation, totalling 1.14 per cent of GDP. Indeed, even if we add to those pro-poor spending programmes the entire governmental expenditure on healthcare of all types to all the people of India (1.2 per cent of GDP), we get a grand total of 2.34 per cent of GDP, which is still less than what the government directly spends in subsidies that mainly benefit the relatively rich. If the thundering of the media denouncing the subsidies for the poor on grounds of “fiscal soundness” is fed by the priorities of India’s stratified society, so is the comparative silence on the much larger sum spent by the government directly in the interests of the dominant groups of relatively prosperous Indians.

India has missed out pretty comprehensively on many of the lessons of the Asian economic development that has rapidly enhanced human well-being and capability as a part of pursuing fast economic growth in much of east Asia. While the inefficiency and inequity of an over-extended “license Raj” that plagued India needed to be removed (as India has been doing, and there is a strong case for speeding up that still incomplete process), it is also extremely important for the government to do those positive things that it should be able to bring about, including much faster expansion of public education and public health care. Indeed, those few states in India—in particular Kerala, Tamil Nadu and Himachal Pradesh—that provided comparatively more schooling and healthcare for all, have over the decades climbed, from lowly positions, to be near the top of the comparative table of per-capita GDP in India. There is perhaps nothing as important for durable and shared economic growth as the enhancement of an educated and healthy labour force.

Even in comparative terms today, China’s experience shows that devoting much more public revenue than India does to the education, healthcare and nutrition of the people is compatible with—and can indeed be very helpful for—high and sustained economic growth. Comparing India’s miserable overall allocation of 1.2 per cent of GDP to government expenditure on health with China’s much higher figure of 2.7 per cent, one is struck by two things: the poor appreciation of the demands of public health in India; and the failure of many champions of economic growth to grasp the precise requirements for fast and sustained economic expansion.

How has China been able to do something that India has failed to do? It seems plausible to argue that given the nature of the political systems of the two countries, the vulnerabilities from which they respectively suffer are radically different. With India’s open and multi-party democratic system, deprivations that are easy to see and politicise get immediate attention in governance through a process that is by no means guaranteed in China. The kind of famine that China had when the disastrous “Great Leap Forward” killed around 30m people—with no criticism in any of the newspapers—could not have occurred in democratic India. Similarly, the sudden and unopposed abolition of the entitlement to health insurance that all citizens of China had—albeit at a rather low level—before the economic reforms of 1979 illustrates a kind of reversal of established political guarantees that would be hard to carry out in India. However, India has different handicaps. Since its democratic system operates on the basis of a general public understanding of the problems faced by the country, when the problems are harder to focus on and very inadequately discussed in the media, they may get little political attention.

In China, by contrast, when the leaders of the political system determine that something must be done, this can happen with breathtaking rapidity, without any need to bring it about through a democratic process of public reasoning shared by the citizenry. The healthcare setback in 1979, led by the new political convictions of the country’s leaders, was reversed sharply from 2004 onwards, when China’s leadership changed its mind—in this case in favour of very supportive policies. By 2012, China had got back to a near-universal coverage of healthcare and at a much higher level of entitlements. A reassessment by the leadership alone of what China urgently needed was enough to bring about a radical change in the lives of all people.

The two systems have very different vulnerabilities. While democratic India has never been in danger of going the way of North Korea today, or of Cambodia, or for that matter of China yesterday, India’s ability to march ahead in healthcare like China has always been dependent on the slow process of bringing about a shared public understanding of its ailments. And this is where the practice of democracy in India has badly failed, with its foggy media coverage and inadequate discussion of the country’s health predicament contributing to persistent deprivations. Basic liberties and civic freedoms, including democratic rights, may be much more vulnerable in China than in India, yet India can learn much from what can be seen as the intelligent welfarism of contemporary Chinese policies, without wanting to go over to its more authoritarian system. (In the absence of democratic guarantees, the Chinese system carries with it the kind of risks—social as well as individual—to which all authoritarian states are exposed.)

I am singling out India for illustration, but of course the failure to recognise the complementarity between economic growth and human capability expansion applies to many other countries as well. It can be argued, for example, that an odd “disconnect” between public action and economic expansion has plagued the recent attempts in Europe at overcoming the continent’s on-going economic and financial crisis through largely indiscriminate “austerity”, without taking adequate account of the far-reaching social and economic consequences of withdrawal of public services and employment-supporting policies.

I move now to the third line of proposed explanation of the tolerance of severe poverty. The claim that human beings are incapable of sympathy for others is an often-repeated generalisation about mankind. Oddly enough, this epistemically unsupported and ethically befuddling point of view is sometimes attributed to Adam Smith, based on a misreading of a couple of paragraphs in one of his books dealing with a different subject (why bakers, butchers, brewers and all of us want trade and can benefit from it), and ignoring the rest of his writings.

Smith’s Theory of Moral Sentiments opens, in fact, with the following sentence: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.” Smith’s analysis is further developed as the book proceeds, and he makes particular use of the thought-experiment of the “impartial spectator” as a device for the reasoned self-scrutiny, of which, he thought, human beings are perfectly capable. There is actually a close link between Smith’s discussion of the nature and reach of “moral sentiments” and the gradual emergence of political demands across the world, over the last two centuries, for social safety nets, human rights and even for the establishment of a so-called welfare state.

These connections apply as much to India as they do to Europe and America and the rest of the world. For example, the rapid elimination of famines that followed Indian independence and the establishment of a functioning democracy turn on the capability of people to relate to each other. The share of famine victims in the total population is always very small—it is typically not more than 5 per cent of the people, and hardly ever exceeds 10 per cent. So the power of voting in a majoritarian democracy would not be able to explain how a democracy could serve as a deterrent to famines, if other people really lacked sympathy or concern for the famine victims. Public discussion about the agony and misery of the famine

victims, along with an understanding of the complete preventability of famines, makes their elimination a policy priority for a majority of the people and thus irresistible in a majoritarian democracy. The use of the media in a functioning democracy is critically important for broadening the political reach of people’s moral reasoning.

To conclude, it is hard to believe that the quiet tolerance of poverty and deprivation really arises from some basic inability of people to sympathise with each other. We get more help from the hypothesis of ignorance—not arising from the unavailability of empirical information, but from established barriers against paying attention to information about socially distanced people. In the case of India, it is almost certainly linked to hardened social stratifications of caste, class and gender and to the biases that these barriers impose on the coverage of the otherwise vibrant Indian media. The nature of that media, however, is not an immutable social fact, and a clear recognition of the need for change can itself be an important step towards remedying the limited nature of the coverage. The fact that the experience of the world—from Europe to east Asia—shows a positive connection between economic expansion, on the one hand, and public efforts to enhance human capability, on the other, has to be much more widely discussed and far better appreciated.

If it seems possible that the tolerance of the intolerable arises ultimately from fallacious reasoning, rather than from the unsympathetic nature of human beings, that recognition must surely provide some ground for relief. It also generates the understanding that there is work to be done.