# News Define - and defend - poverty

1. Jan 12, 2006

### Staff: Mentor

I'll probably split some posts from a previous thread, but for now:
It is true that different people define poverty differently, and relative vs absolute is the key difference. I'd like to hear the case for defining poverty in relative terms from anyone who cares to argue it. I will argue for an absolute definition.

2. Jan 12, 2006

### Staff: Mentor

People define poverty differently, that is true. But poverty itself is not difficult to define. The dictionary states it quite simply: "the state of having little or no money and few or no material possessions". The argument could stop right there - that definition is simple, straightforward, and absolutely excludes the concept of "relative poverty". And yet some people argue for a relative definition. Why? The reason is the usual one: politics. It's the same reason people attempt to change the definitions of other words in political context - even the definition of the word "is". Setting the motivations aside, lets examine the word and see if we can explain why the word is defined in absolute terms and why it cannot be defined in relative terms and remain useful.

The word poverty is defined in absolute terms because it is a description of a human condition. Like "sick" or "healthy" or "tired" or "cold" the word describes how you as an individual are. As a result, the word can only be used correctly in the absolute sense. Let me provide some examples of how the word is used to illustrate:

Case 1:
A person has $2 in his wallet today and had$1 yesterday (assume factors such as inflation are nonexistent or constant). He has no knowledge of the condition of anyone else.

This person, if you asked him, would say his condition has improved and therefore he has become less poor.

Case 2:
Person "A" has $2 in his wallet today and had$1 in his wallet yesterday. Person "B" (a close, personal friend of person "A") has $8 in his wallet today and had$2 in his wallet yesterday.

In the absolute sense, has person A's condition improved? Of course. Does the fact that person B's condition improved more in any way imply that person A's condition got worse? Or more fundamentally, does person B's improvement directly harm (ie, decrease) person A's condition? Of course not. The ususal counterargument here is that if person B had improved less, than person A could have improved more. That may or may not be true, but the fact of the matter is that it is irrelevant for the purpose of this discussion. In fact, saying that person B improved more than person A is still an admission that person A improved!

Now, why could using a relative scale for poverty be useful? In all honesty, I don't know. It does not tell you anything useful about the human condition or change in the human condition of the people it is used to describe. Ie: The income gap in the US is going up, but more people today own houses and cars and stocks than 20 years ago. So what does that tell us? A person who didn't used to be able to own a car but now can is poorer than he used to be? That doesn't even make sense, much less actually make a useful statement.

Last edited: Jan 12, 2006
3. Jan 12, 2006

### Staff: Mentor

There's an irony that I just realized here: defining poverty in relative terms means that you are describing "prosperity" or "success" as a "race to posessions". Isn't that backwards? The capitalists are supposed to be the ones who are in a "race to posessions" while the communists are supposed to be the ones who are trying simply to improve the human condition. To me, this exposes a real flaw in the mindset of communists(/socialists/Marxists/anarchists/etc) and a misunderstanding or mischaracterization of capitalism by those who would oppose it.

4. Jan 12, 2006

### X-43D

Absolute poverty is the severe deprivation of basic human needs including safe drinking water, food, shelter, sanitation facilities, health, education and information.

Last edited: Jan 12, 2006
5. Jan 12, 2006

### daveb

This seems the best definition I can fathom. I would be hard-pressed to describe some native tribes as living in "poverty" since they have little to no need for money. Poverty would then be a lack of the means to legally acquire these basic necessities.

6. Jan 12, 2006

### BobG

The absolute poverty level based on how many necessities a person can acquire is most important and there are fewer of those in the US in true poverty than in the past.

Still, your argument is a little simplistic - mainly because you left out inflation. It assumes an unlimited supply of goods. If there is suddenly more money available overall, prices will rise to meet the total amount of money available - at least until the high prices encourage production of more goods. But, since the same amount of money is worth less, the increase in the amount of new goods produced never balances the original price increase.

The only way to reduce the absolute poverty level is to improve the method of making goods, reducing their cost - in other words, people have to be more productive. This often does have a net effect of raising how much money a company distributes to employees, especially if the improved methods require people with more training and experience, but, hopefully, the increased amount of money is balanced by keeping prices for necessities from rising as fast as the total amount of money available.

That's not always the case. In Colorado, cities practically go to war with each other over water. There is no way to produce 'more' water. There's only better ways to move water over the mountains to the front range (with the ultimate goal of ensuring Utah, Arizona, Nevada, and California get only the amount they are legally entitled to and not a drop more) and ways to prevent other cities from getting water you want (Colorado Springs is legally entitled to a certain amount of water from Pueblo's reservoir, but Pueblo has managed to block building a pipeline that would actually move that water to Colorado Springs). There's only so much water to go around and anyone looking at the problem realistically realizes cities are really fighting to delay the day that the water crises hits them, not to prevent a crisis from hitting.

Population growth means there is always an increasing number of people vying for a nearly fixed level resource. People in upper class neighborhoods have compacts that require them to have mostly grass lawns that are green and well groomed or they pay a fine. People in those neighborhoods believe there should be no water rationing; that water shortages should be solved by higher prices for water. In other words, raise the price and people with money will have green lawns while folks with lower incomes will water their lawns less, shower less, and wash their clothes less often and the water crises will be resolved. (The actual solution is a mix of tiered prices and rationing and at least reasonably fair).

One resource among other necessities whose relative price is cheaper than in the past doesn't give a whole picture, but neither does just using an absolute dollar amount for poverty, or just using a percentage comparison of income.

Income is meaningless. The only accurate picture of poverty is how many necessities a person can buy.

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7. Jan 12, 2006

### Art

Relative poverty is a valid measure for several reasons. For example as society has progressed life expectancy has increased but by how much depends on one's wealth. One could also look at it as a mathematical model by measuring the number of people > minus 2 SD from the norm at different times. Personally I have no idea what these figures would be but I think it would give a more accurate indication of whether poverty is increasing or decreasing.

Also if one uses a purely absolute scale based on a historical baseline then by definition there is no such thing as poverty as there is probably not a human being on the planet who is not better off than our stone age ancestors.

Therefore on a global scale I think it is fair to say that countries who's citizens still only have a life expectancy in the low 30s could accurately be described as poverty stricken even if their income is greater than their predecessors.

Edit - Here's an interesting article showing how poverty is defined in the US and detailing some of the financial and social ramifications of failing to deal with it. http://www.childrensdefense.org/familyincome/childpoverty/definingpoverty.pdf

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8. Jan 12, 2006

### NewScientist

I was speaking with the Head of the UK branch of a charity who deals with poverty and he gave poverty in these terms.

In Britain, the brink of disaster is being homeless with no means to uspport your self. Destitution is when you cannot feed yourself in a bed sit. Poverty is when you cannot buy a television and rent a bed sit.

He put it to me poverty in the UK was not the issue, the former 2 were

9. Jan 12, 2006

### Moonbear

Staff Emeritus
I'm confused by what you're saying here. Wouldn't a shorter life expectancy mean people had less access to the basic necessities for life, thus this would be referring to absolute poverty rather than relative poverty? You started out saying you were arguing that relative poverty is valid, but it sounds like your supporting statements actually defend absolute poverty rather than relative poverty.

10. Jan 12, 2006

### Staff: Mentor

Yes!! That is the basic problem with arguing for relative poverty: it is logically flawed and as a result, it can't be done without jumping back and forth between relative and absolute. Art, you still cited the absolute several times in your post.

Can you give a justification for using a relative scale that does not mention human condition at all or shows that one person's improvement in condition causes another person's condition to get worse even as it improves? (yes, that's self-contradictory....)

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11. Jan 12, 2006

### Staff: Mentor

That's mostly an issue of where to set the bar, not whether it should be an absolute or relative bar. I would tend to agree with you though, that western countries set the bar unreasonably high.

That isn't to say, however, that the bar shouldn't be moved as standards change (Art - so no need to bring cavemen into this). But moving the bar is not the same as making the scale relative.

12. Jan 12, 2006

### Staff: Mentor

Agreed.
Not really - I may not have mentioned inflation, but it isn't really necessary because the statistics are so unequivocal: even with inflation factored in, the progress has been dramatic. In fact, taking inflation into account is mandatory (so it can just be assumed from my post) for determining where where to set the bar since inflation is how you keep the measure of a person's material condition consistent.
Inflation, right - already covered. Again, the definition is not about money, it is about condition. Measuring money gives an approximation of condition, but of course no poll can give perfect results (no poll of anything can give perfect results). The issue here isn't the particulars of the scale, it's about which scale to use. And you seem to agree - only an absolute scale fits the definition of the word.
Not meaningless, just not perfect. There are, of course, exceptions, and inflation isn't uniform (some markets are inflationary, some deflationary) but the fact that the average bottom fifth household earns 9% more today than 20 years ago (inflation adjusted) means that in general, that household has 9% more buying power than it did 20 years ago. Thats what "inflation adjusted" means. And that fact is borne out, probably in the best way it can be illustrated, by the market penetration of household devices. I used to have a great link (I'll look more) that had statistics for market penetration of everything from TV's to microwaves to refrigerators to air conditioning. Needless to say, things that used to be luxuries for the rich have become ubiquitous.

13. Jan 13, 2006

### Art

Precisely, relative to those on a higher income
Not at all. As stated their income might very well be higher than their predecessors but their life expectancy has not increased by the same rate as their wealthier peers and may in fact have even fallen as a result of industrialisation etc...

I am not making any contention as to whether poverty has increased or decreased I am merely pointing out that it is perhaps generally more relevent to adjudge poverty on a 'relative to one's peers' scale than on an historical scale.

Last edited by a moderator: Jan 13, 2006
14. Jan 13, 2006

### Staff: Mentor

How, then, do you gage if they are more or less poor than they were before? It just seems to me like you are setting the bar, but avoiding saying whether it is a relative or absolute bar. How you arrive at that bar at a single point in time is irrelevant for determining if it is an absolute or relative bar. What makes it relative is if it tracks the disparity through time. Ie, if a poor person has a life expectancy of 30 and had a life expectancy of 25, doesn't that mean their physical condition has improved and thus they are less poor? It doesn't matter how you initially set the bar at 30 - in fact, you can even raise the bar as expectations change - but unless it is always tied to the lifespan of other people, then it is not a relative bar.
If that were true (it isn't), then it would be a good argument for why income alone is not a good indicator of poverty level - but it is still irrelevant because you are still directly referencing an increase in a human condition! (increased lifespan=good). Ironically, about the only way to use a sliding scale that doesn't reference a human condition is to use money alone - but since you are aware of the flaws in that (you pointed some out), it seems you agree that the word "poverty" must be referenced to a human condition - you just need to take the next step in logic and accept that "poverty" is only meaningful if referenced to an absolute scale of human condition. That's because human condition itself is an absolute thing.

15. Jan 13, 2006

### Art

I don't know definitively, I did suggest perhaps a form of mathematical modelling in my earlier post but I'm not saying that is the answer.
And why do expectations change? Because people judge their condition relative to their peers.
I chose lifespan randomly as an example rather than the definitive measure of poverty but as for a longer lifespan=good I think most people would consider this to be true.
I don't follow your logic here?? Yes poverty should be referenced to the human condition as you say but the argument seems to be whether it is more relevent to reference against the human condition of one's predecessors or ones's peers. I do not see any supporting argument for your contention that this human condition has to be an absolute scale??

It seems I was wrong but I thought the point of this thread was to first define what poverty is and then formulate how it should be measured and tracked so perhaps that is what we should do; take this one step at a time and first establish precisely what we mean by poverty and then address the issue of how best to measure it.

My personal definition would probably be something based on Maslow's hierarchy of needs with the cut off being level 2 acquired.

Last edited by a moderator: Jan 13, 2006
16. Jan 14, 2006

### kyleb

"Less" and "few" are not absolute terms.

17. Jan 14, 2006

### Staff: Mentor

I am trying to understand the 'defend' poverty part.

For absolutes, how about having nothing - no food, no water, may not clothes except perhaps some shorts, no home, no money, no tools, nada. Then go up from there. Clearly such a person is destitute. How about the refugees from New Orleans or the tsunamis. Well, maybe they had the clothes they were in and perhaps whatever they could carry.

IMO, relative poverty is important as is one's income in relation to cost of living. What does it cost for the basic necessities - e.g. food of minimal caloric and vitamin/mineral content, clean water, a shelter, minimal clothing, and then go from there.

I guess the problem in defining poverty is what standard or reference to use, and then determine how many people fall below that reference.

More people owning something can be somewhat misleading if a portion (not necessarily well-defined) are actually in debt. Most people do not own their home outright - the mortgage holder does. 'Ownership' has increased with relatively easy access to debt. This brings us to net worth, in addition to income.

18. Jan 15, 2006

### SOS2008

Ditto.
Interesting. Perhaps similar to what lenders look at, such as credit score, debt-income ratio (which takes into account income and assets versus debt and depreciation of assets, etc.). They also look at stability/job security. People who are in and out of employment, or live month-to-month so if they lost their job they would soon lose everything--maybe look at health too?

19. Jan 15, 2006

### Schrodinger's Dog

Interest and inflation were created by Economists and used by governments to control amounts of available wealth(Governemnt sometimes need more money than it's actually worth to balance budgets so inflation increases).

Many Political leaders Especially Americans in the past have treated banks like a necessary evil. Something they need but would rather do without.

Banks know that people are essentially bad with money and if they can have it now they very often will(this is how banks make money) they take interest and fees use that to make more wealth and in turn make credit more accessible. Banks will tell you that this is how they work, they'll tell you that that is whats important to them unless your a customer then they'll tell you your the most important person in the world and offer you a gold credit card

IMO financial institutions have a lot to answer for, banks are buisnesses, yes they need to make money, but when it comes to exploiting human weaknesses or making a whole countries political environment even more unstable, someone has to say what are you up to surely?

I like the Islamic banks, no interest, now there's a damn good reason why they do that:tongue2:

If your offering credit to someone with $50,000 dollars of debt you should be asking the question can they afford to pay not mmm ok have$25,000, can I make enough money to cover them if they can't by selling them into poverty:grumpy: .

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20. Jan 15, 2006

### SOS2008

The matter of banking regulations, most specifically credit cards, is a topic of much debate. There was a very good program on Frontline (PBS) -http://www.pbs.org/wgbh/pages/frontline/shows/credit/interviews/dodd.html Senator Chris Dodd is in this program as an advocate for consumers, but so are others such as Senator Dianne Feinstein - http://feinstein.senate.gov/news-plastic0522.html You may note these are Democrats.

But what this really gets back to is how things would be in a truly free trade market. You think these credit card companies behave like loan sharks now?