Wed, Aug 02, 2006 - Page 9 News List

The free market and its relation to global poverty

By Jeremy Seabrook  /  THE GUARDIAN , LONDON

The collapse of the Doha "development" round of trade talks has been widely lamented as bad news for the world's poor. But poverty is not exclusive to developing countries, and there is little danger that the poor are going to become an endangered species, whatever the deal on trade.

Poverty is not a static condition that people may be rescued from or "raised out of." Poverty has as many guises as the words that describe it: the destitution of the landless laborer is not the exclusion of the city slum dweller; the elective austerity of the religious foundation is a million miles away from a drought-stricken tribal village in Orissa; and the violent dispossession of the Rio favela, or squatter settlements, is not the same thing as the scarcity of a lean season in Bangladesh.

As Western governments never cease to affirm, poverty is relative (although they do not state what it is relative to: whether to neighbors, to the rich, or to those whose personal fortunes outstrip the GDP of whole countries). If anyone with below 60% of median national income is said to remain in poverty, a significant proportion of the people will always be poor. It should not be imagined that poverty in the rich countries is a mitigated or sheltered experience, as the existence of guns and violent crime, a knife culture, gang warfare and a drug economy testifies.

There is an even more compelling reason why poverty is destined to remain a specter at the global feast. Poverty will not be eliminated for the very reason that the global developmental paradigm gives priority to the market over government, and even to the market over society. Governments everywhere have more or less voluntarily withdrawn from responsibility for distributive justice, and since free markets distribute their rewards according to their own promiscuous and capricious laws, this ensures that wealth flows unevenly.

This means that those who are not beneficiaries of an expanding and increasingly internationalized economy have diminishing redress for their poverty. Governments routinely express their desire to create a more equal society, and make provisions to alleviate the worst sufferings of the poor. But their capacity to do so is far behind the adroit ability of markets to lavish prizes on those they favor. Indeed, governments have been weakened by a globally integrated economy that permits finance to move so easily, but does all it can to prevent the movement of the peoples of the world to where they might command higher wages.

Since wealth may rest wherever it can regenerate and reproduce itself most readily, governments throughout the world have had to abandon that modest tribute of wealth that the rich have called "punitive taxation." Even modest demands by government upon the heavy purses of privilege may be evaded by the instant disappearance of billions of dollars into havens, gilded exile and offshore hideaways.

Perhaps the most astonishing obstacle to the removal of poverty from the world has been the transformation of the super-rich. These people have ceased to be regarded as the greedy devourers of the substance of the poor, the ugly monopolists of resources: no longer the exploiters and bloodsuckers of 19th-century industrial lore, they have been turned into philanthropists, the virtuous possessors of fabulous fortunes, by whose grace and charity alone the dire poverty of the destitute will be relieved.

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