Radical Rethink of Poverty!
- Adam Ouarda
- Jul 8, 2020
- 5 min read
This blog is on my initial thoughts from a book that rethinks poverty and its solution. The book is accessible online in pdf format linked above.
Reaction from section: 1. Think Again, Again.
From reading the first few pages (until page 25) I find this a very good compliment for the work of economist Amartya Sen in his book “Development as freedom” who, put very simply, demonstrated the principle need to understand development through a channel of expansion of freedoms and stressed the need for a comprehensive outlook rather than a culmination one that instead had a much more holistic view of development that matched the outlook seen in the origins of the disciple of economics.
From the outset you get a very good introduction on the position of the book and the authors. It’s made quite clear that the authors aim is not to run away from the one of, if not, the biggest problem of our age, poverty, rather it’s to have an optimistic approach to its elevation. They aim to persuade the reader that poverty is something that can be solved if done right and thought about in-depth not just using theory, but rather fundamentally using empirical evidence accumulated through massive randomised tests, much like a drug test seen in medicine.
Poverty is vast and to see it as something derived from laziness or as a “natural” by-product of the free market is wrong on all levels. For me it is something that has actually been caused by the disastrous free market capitalist approach to economic management. This book in the early pages gets this point quite strongly across. Those in poverty have, unfairly, for many times been given the attached of terrible stigmas of a symbol of failure and a lack of drive to work hard. There is often a stigma of poor being less rational than they middles income (+) households. Rather this is simply wrong, instead people in poverty, ironically, are arguably more rational than those comfortable; those in poverty need to carefully think of what they spend their money on and how they will get by otherwise the cost of their decision can have very serious consequences. So immediately we can see how unreasonable conclusions can become when there is a lack of in depth understanding of the poor.
Nevertheless, this book mentions strong use of tests to have a much more deep and factual based understanding of the lives of the poor. Looking deeper on what the life of a poor person entails; what choices they make, how they make their choices and what they need. Putting on the socks, not just the “shoes”, of the poor really helps comprehend the richness of their life. Without understanding how those in the poorest parts of the world make decisions and what they need, it is impossible to reasonably come to conclusions on policies to effectively tackle their problems.
Essentially this book suggests the need to break down the question into smaller parts, involving investigation into how poor can be incentivised and the clicks of the right buttons to solve poverty. From listening to those who live the life of poverty we can learn a lot on how to go about the right policies in helping them. This links to the very strong most noticeable cases for helping those in poverty through use of aid, microfinance and bed nets (to remove the millions of premature mortalities from Malaria) which were once seen as miracle ideas that would help the poor. However how these are administered plays a very big part of their effectiveness. Thus, through the use of experiments we need to evaluate these cases and see how effective they are and the ways in which to maximise welfare from these cases. Something that from this book I hope to get a greater understanding of.
For the case of aid itself, proves divisive on whether or not it should be given to help lift out a country from the poverty trap. Those who show resentment to it come from the champions of the free market and from those who believe its mechanisms alone are substantial enough to lift the poor out poverty. This view more often than not is taken by the supports of the “roll back of the state”, the neo-classical liberals like Thatcher, and this something I totally disagree with. For me it’s wrong to sacrifice any responsibility of the state in helping solve poverty and purely relaying all the work to the very dangerous “invisible hand”. On the contrary those who support aid argue otherwise along with me. Nevertheless, this book makes it clear it “will not tell you whether aid is good or bad” rather it will break the question down to see how effective it is in some area’s comparable to others, keyword being “comparable”. Thus, already the process of dismantling the bigger question.
Furthermore, the book on page 23-24 goes on to reference Sen’s contribution to the idea that poverty leads to a vast waste of lives and economic potential. More closely the potential of individuals to flourish and self-actualise to their talents etc. poverty has meant that, the girl in Yemen has not been able to materialise her great business idea into profit, and has meant that that boy in Kenya has not been able to become a runner due to the lack of notorious food and education. This links to the idea of extending the “franchise” of the so called “equality of opportunity” to the poor whereby those worse off still have a chance in life. However, this arises new sub questions to the bigger picture; what are the effective ways of helping the poor?
Another question, further to the already stated on equality of opportunity and aid, is one on bed nets in fighting the disease of malaria and safeguarding children vulnerable to the disease. Bed nets have proven to be so momentous in preventing deaths from infection of malaria. So easy yet so effective, but there is a question on how to best maximise this solution. Should we give it free to the poor? Should we give the first at a subsidised price and then incrementally raise the price? Or should the price be unaltered and charged in full? To get to the right answer we need to understand how the poor makes decisions. If we give it for free there is a risk of undervaluing the nets and seeing it being used for other uses such as fishing nets. If we charge the full price there may be no incentive to get one. It could be information gaps for why we don’t buy the nets that will save our children from premature death. It is clear there are many questions to answer but the point the book makes as an foreword section is that to solve poverty involves a total breakdown. Looking at different areas of the bigger question involving investigating different previous tests. From this we get a much more holistic view of the question and subsequently a more accurate effective answer.
In this book I hope to untimely learn the ways of dismantling a question such as the proposition investigated and look forward to seeing the anecdotal use of tests to aid empirical data application in the answers to our questions. Nevertheless, less the “shift from boarder questions to more narrow ones” has many advantages.
After, the introduction of this book, I do already feel that I will eventually understand how to tackle big questions and also understand about what the solutions to poverty involves. Upon completion, writing a summary would be a good reflection from this. I hope you can read this book along with me and comment down below here if you have already read the book whether if it is in its entirety or not, or even if you haven’t share your ideas below on how we should tackle poverty!
Adam Ouarda
8 July 2020
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