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Rising number of poor shows us ‘Poverty is not a funny thing’

 Binay Sarkar |  2014-11-02 21:45:44.0  |  New Delhi

Rising number of poor shows us ‘Poverty is not a funny thing’

In 1998 the ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ was awarded to Amartya Sen of Trinity College, Cambridge, UK, ‘for his contributions to welfare economics’. Professor Sen wrote Collective Choice and Social Welfare in 1970. From the mid-1970s, he worked ‘on the causation and prevention of famines’ for the World Employment Programme of the International Labour Organization, for which he wrote his 1981 book Poverty and Famines. He also wrote some articles ‘mostly published in journals in the 1970s and early 1980s, but gathered in two collections of articles (Choice, Welfare and Measurement and Resources, Values and Development, published, respectively, in 1982 and 1984).’ He states, ‘I had to choose quite a different subject for my research thesis, after completing my BA. The thesis was on ‘the choice of techniques,’ which interested Joan Robinson as well as Maurice Dobb.’


He thought he had ‘some understanding of the demands of fairness, liberty and equality’. He lectured on ‘Human Values’ at Stanford in 1979, published as a paper, ‘Equality of What?’ in 1980. His books Commodities and Capabilities, Inequality Re-examined, Quality of Life appeared in 1985, 1992 and 1993 respectively. Then we read that all through his journey to the ‘prize’ he kept on working mainly within the confines of ‘the Keynesians … the ‘left’ of the neo-classicists … and neo-Keynesians’. In addition, he discovered in ‘Maurice Dobb... an astute Marxist economist,’ who, to his delight, ‘took welfare economics seriously (and indeed taught a regular course on it), just as the intensely ‘neo-classical’ A.C. Pigou had done (while continuing to debate Keynes in macroeconomics)’.

Regarding Maurice Dobb, how could a ‘Marxist’ be an ‘economist’ (notwithstanding having to have a profession) when an ‘economist’ is an apologist of capitalism, whereas a ‘Marxist’ is a scientist of Socialism? Marx was not an ‘economist’, not even a ‘welfare economist’. According to him, ‘Just as the economists are the scientific representatives of the bourgeois class, so the socialists and the communists are the theoreticians of the proletarian class.’  In addition, Marx became a Socialist – an educator and organizer of the working class. Thus, the coinage ‘an astute Marxist economist’ is anti-Marxist. Obviously, Prof. Sen learned most of his lessons from what Marx called ‘Vulgar Economics’, twisted and turned since 1870s into so-called ‘Modern Economics’ or simply ‘Economics’, as preferred by the 1970 ‘The Bank of Sweden Prize’ winner Paul A. Samuelson of Massachusetts Institute of Technology. This universal corrupting trend, although born at the dawn of Political Economy, gave rise to the so-called ‘neo-classical’ and ‘modern’ economists – a breed of many faiths having efficient mouth and inefficient eyes mostly with common trait of Marx-abuse since Marx’s time until today, some way or other.

The concept of understanding human society as a system was discovered long ago with Karl Marx’s greatest contribution to humanity the Materialist Conception of History and his laying bare the laws of motion of capital with his theory of value and surplus value. Economists need not make any hair-splitting discoveries anymore on that tally to become ‘an astute Marxist’, to rise to hyped ‘eminence’, but only recognize Marx as a man of the time and become a Socialist educator and organizer of the working class towards human emancipation.

Anyway, Prof. Sen also educates his pupils with brave words such as ‘collective choice’, ‘fairness, liberty and equality’, ‘human values’, ‘equality of what?’, and ‘quality of life’. Therefore, you would not notice his conspicuous meticulous silence regarding the foremost scientific discoveries by Marx and Engels including further contributions by other later genuine Socialists..

Prof. Sen, alongside many others trying to deal with the ‘Concepts of Poverty’, discovered that ‘poverty’ is a ‘funny’ thing. He accomplished his ILO job writing Poverty and Famines, published in 1981. In collating some food data vis-à-vis some recent famines, ‘the focus’ of his ‘concern’ was ‘the specification of certain ‘consumption norms’, or of a ‘poverty line’, to do a part of his job: ‘the poor’ are those people whose consumption standards fall short of the norms, or whose incomes lie below that line.’ Beginning his ‘study’ about ‘Causation of poverty and effects of poverty’, he gained a point, ‘The idea that the concept of poverty is essentially one of inequality has some immediate plausibility.
After all, transfer from the rich to the poor can make a substantial dent on poverty in most societies.’
Thus, Prof. Sen started with ‘certain consumption norms’ or a ‘poverty line’ to be sustained with ‘transfer from the rich to the poor’ that ‘can make substantial dent on poverty’.

His is a matter of co-existence of private property and poverty only, ‘inequality’ notwithstanding. Outrageous, is it not? Economists take to determine a ‘poverty line’ for the class that produces all wealth of society!  Nonetheless, the professor of ‘welfare economics’ asserted, ‘poverty is a value judgment.’  He held, ‘It is important to distinguish between different ways in which the role of morals can be accommodated into the exercise of poverty measurement’, and cited Eric Hobsbawm (1968) for whom, it ‘is always defined according to the conventions of the society in which it occurs’.
Then he turned back to Adam Smith who according to him ‘brought out’ the point ‘very clearly … more than two hundred years ago: ‘By necessities I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even the lowest order, to be without …’. Again, he navigated to Karl Marx (1867) who, as he remarked, ‘in a similar vein … argued that, while ‘a historical and moral element’ enters the concept of subsistence, ‘nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known’’. In no time he took the both to task, ‘It is possible that Smith or Marx may have overestimated the extent of uniformity of views that tends to exist in a community on the content of ‘subsistence’ or ‘poverty’.’  
Contrary to Prof. Sen’s assumption, Marx did not equate ‘necessaries’ and ‘subsistence’ as synonymous with ‘poverty’.  Marx used ‘subsistence’ and ‘poverty’ to mean two very different aspects of life – the former to the amount of average wage in point of space-time, the latter to each individual’s alienated relative status in a private property society. Thus, ‘subsistence’ is ‘practically known’ but ‘poverty’ remains elusively comparable but always immeasurable.

Anyway, Dr. Sen’s ‘scientific reasoning’ grappled with ‘the problem of poverty management’ and preached an ideology of ‘market entitlements’, ‘the exchange entitlement set’, and such likes in his Poverty and Famines. Karl Marx raised his scientific reasoning up neither with ‘value judgment’, nor ‘morals’, but with the bricks of facts.  Let us see how Value self-expands and turns into Capital.
Marx’s equation is V = c + v + s

Here V = Value that is the socially necessary labour incorporated into the sum total of commodities (goods and services) manifesting itself in the form of price through exchange; c = constant capital, i.e. the value of all means of production (instrument of labour, raw material and auxiliary material) other than labour power; v = variable capital, i.e. the value of collective labour power transformed into collective wage fund; and s = surplus value which takes the form of collective profit. Now, out of the total capital ‘c + v + s’, the part ‘c + v’, although appears as an advance from the capitalists, actually comes from an advance first made by the workers to the capitalists. Capital is past labour, dead labour that sucks living labour like a vampire.

‘In reality the labourer ‘advances’ to the capitalist and not the capitalist to the labourer.’ In any working day every aliquot part of labour-time is actually divided into two parts – the ‘necessary’ 8 labour to reproduce and return ‘v’ to the capitalist, and the ‘surplus’ labour to create ‘s’ for the capitalist.. Notably, the worker preserves ‘c’, receives ‘v’ and returns ‘v + s’ to the capitalist, whereby the capitalist gets ‘s’ gratis, i.e. fruits of unpaid labour, a portion of which goes to their consumption, the rest to reinvestment for augmentation of their capital. This is how Value expands itself through the capitalist class exploiting the working class. The categories examined above comprise all various forms of private property, or what Prof. Sen calls ‘market entitlements’.
Since socially necessary labour time incorporated into the sum total commodities circulating globally enters in pieces into all various forms of private appropriation as shown above, there arises a continuous struggle around the working day.

The capitalists strive to augment ‘surplus’ labour – (1) absolutely by lengthening the working day, or, (2) relatively by diminishing the ‘necessary’ labour. This second measure involves (a) raising the productivity of labour via technological development, (b) increasing the intensity of labour power (Taylor system, etc.), and (c) reducing relative wage [see below for details] i.e. reducing the collective share of the collective worker in comparison to that of the collective capitalist in the ever-growing sum of global wealth production. On the contrary, the workers seek to improve upon their subsistence (when business is brisk), or at least to keep it intact (when business is slow).
Obviously, by turning surplus labour into surplus value and realizing it on the market as collective profit, the collective capitalist class share the proceeds of exploitation among its various sections as interest, rent, taxes, industrial and commercial profits, etc. So all various incomes of the capitalists (banks and ‘public’ enterprises included) come gratis from the working class’ collective surplus labour.

As long as capitalist private property exists, capitalists remain involved between themselves in the internecine conflict over sharing off the global ‘surplus value’, i.e. the total global profit, notwithstanding their chambers of commerce, WTO, etc. On the other hand, workers remain broken up by their constant competition for a job and a wage to survive as an alienated ‘incoherent mass’(Communist Manifesto) scattered the world over. They remain a miserably uninformed and fatally competitive mass duped by all various leaders of trade unions, reformist political parties, media, education for wages-slavery in a chorus harping on all distorting and diverting local, regional, national, sectional, conflicting and self-defeating issues.  

‘Competition separates individuals from one another, not only the bourgeoisie but still more the workers, in spite of the fact that it brings them together. Hence, it is a long time before these individuals can unite, apart from the fact that for the purpose of this union – if it is not to be merely local – the necessary means, the big industrial cities and cheap and quick communications, have first to be produced by large-scale industry. Hence, every organized power standing over against these isolated individuals, who live in conditions daily reproducing this isolation, can only be overcome after long struggles…

‘The separate individuals form a class only insofar as they have to carry on a common battle against another class; in other respects they are on hostile terms with each other as competitors.’9   This all-pervading competition engenders ‘the most violent, mean and malignant passions of the human breast, the furies of private interest.’

‘Consequently, the system of wage-labour is a system of slavery, and indeed of a slavery which becomes more severe in proportion as the social productive forces of labour develop, whether the worker receives better or worse payment.’  

Marx wrote The Poverty of Philosophy criticising M. Proudhon’s The Philosophy of Poverty. Marx’s criteria of judgment was not ‘poverty’ but the relations of production that gave rise to ‘poverty’ in the first place for the producing classes since the beginning of division of society into classes. For this reason, to his daughter’s question – what is the most demeaning characteristic of a worker? – his answer was ‘subservience’.

Let us read how Marx understood ‘poverty’ as early as in 1847: ‘The measurement of poverty’, fixing the ‘poverty line’ and ‘identification’ of ‘the poor’ pose irresolvable problems for economists. That ‘poverty’ is measurable is a dogma, as that ‘utility’ is quantifiable is, as also that ‘resources’ are ‘scarce’ while our ‘wants’ are ‘unlimited’ are. Hence, economists lay only endless equations of problems, which they cannot solve.

Even so, Prof. Sen writes of ‘The measurement of poverty … based on certain given standards … that … must have a good deal to do with some broad notions of acceptability’. Dealing with the United States President’s Commission on Income Maintenance (1969) report, ‘Poverty and Plenty’ he writes about ‘a certain amount of confusion’ and proceeds to tell his readers, ‘While the exercise of ‘identification’ of the poor can be based on a standard of minimum needs, that of ‘aggregation’ requires some method of combining deprivations of different people into some overall indicator. In the latter exercise some relative scaling of deprivations is necessary.’ He concludes, ‘Poverty is, of course, a matter of deprivation. …There is good case for viewing the measurement of poverty not, as is often asserted, as an ethical exercise, but primarily as a descriptive one.’ Therefore, he produces some mathematics too in Appendix C of Poverty and Famines.

The real issue hidden behind such word games is to keep ‘the poor’ alive in their poverty with their children striving for a mouthful. To fix a limit (‘the poverty line’ or an aggregate about ‘a standard of minimum needs’) to workers’ aspirations about life is a job of the prized apologists of capital. As a piece of scientific reasoning, this is, of course, sheer rubbish,’ to return Sen’s own words to his own case.

The author is a former Professor of Economics at Ramananda College in Bishnupur, West Bengal

Binay Sarkar

Binay Sarkar

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