The poverty of poverty statistics

The left defines poverty by income, not by what people have. It leads them down the blind alley of thinking that more government is the solution.

The poverty of poverty statistics

By Quentin Langley

Dateline 29 November 2004

Leftish politicians love to demonstrate how much they care about poverty by calling for more government expenditure. I am not convinced.

I could start by pointing out that the left has a most bizarre definition of poverty, which it keeps trotting out to try to prove that things get worse every time right wing politicians are in power. They define poverty by income. What’s that you say? Sounds pretty sensible to you? Surely people with low incomes are poor, right? You would think so, but it turns out not to be so.

Let’s take one rather extreme example. Take the late publisher, politician, spy and con-artist Robert Maxwell. In the last year of his life he lost around $3 billion. That is the lowest income ever recorded by anyone anywhere. So was he the poorest man who ever lived? Or one of the richest?

Now Maxwell was certainly an extreme case, but, surprisingly, he is not unrepresentative of "poor” people. During Margaret Thatcher’s period as British Prime Minister the number of people in the “poorest” 10% who were either company directors or self-employed doubled. And surveys in the 1990s showed that half the people in the “poorest” 10% had above average expenditure levels. These people are not poor in any real sense – they are business people having one bad year. A lot of them have swimming pools and some of them have yachts.

What happened in Britain and America in the 1980s is that people got more entrepreneurial, not poorer. So the number of people with roller coaster incomes which occasionally dip to, or even below, zero went up. The simplistic statistics showed poverty going up. They were wrong.

Poverty in western countries is not absolute poverty. Absolute poverty is not having enough to eat. Relative poverty – the type we have in Britain and America – is often characterised by obesity, not hunger.

But, even though we can dismiss a great deal of what the left says about poverty, let us concede that relative poverty does exist. And that having less of it would be good. If governments can do something that would genuinely help alleviate poverty, that has to be worth at least discussing. It is my contention that government can and should do a great deal. Government can stop causing poverty.

What is it that characterises poverty in the west? We have seen that it is not a shortage of calories. Food is available at a wide range of prices. Nor is it a shortage of transport. Cars are available at many prices, and there is a flourishing second hand market. In some urban areas such as London and New York people choose not to have cars, because the roads are congested and there are alternative ways to travel. But that is not a symptom of poverty – rich people make that choice too. There are low cost airline tickets and cheap cell phones. Poor people have televisions and washing machines.

What is it that they don’t have? They don’t have good schools. They don’t have police protection. They don’t have decent housing. They don’t have proper healthcare. In fact, while they have everything that the private sector provides, they entirely lack the things that government has either taken over completely or seeks to provide to poor people.

The very things which governments seek to provide because otherwise the poor wouldn’t get them, are exactly the things that poor people don’t have. The things we leave to the market are provided, like food and airline tickets, at every possible price to suit rich and poor alike.

So, yes, there is one thing the government could do to cure poverty. The government could stop causing it. It could start by pulling out of education, health, law and order, housing and pensions. That would be a start.

Copyright © Quentin Langley 29 November 2004

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