Poverty is a major problem in human society. As M K Gandhi said, poverty is a worse form of violence. In 1971, Indira Gandhi gave the slogan ‘Garibi Hatao’ , yet, India is amongst the poorest of countries in the world. How and when do we call someone poor? When they cannot fulfill their basic life needs including food, shelter, clothes, education and healthcare, they can said to be poor. However, relative poverty is comparative in nature. I will illustrate some examples to demonstrate what relative poverty is, but first, what is the definition of relative poverty?
Relative poverty is when income is less than the average income of the nation by a certain amount. For example, in the UK, relative poverty is defined as an income that is 50% less than the country’s average income. Therefore, a rise in economic growth will cause a change in what constitutes economic growth conditions, which are subjective to the society in which the person lives. Thus, relative poverty level varies between countries, and can change over time. For example, the more the education level, energy and transportation cost an urban city, the higher their poverty line will be, as compared to poorer countries.
In regards to relative poverty, the poverty line below which a person falls into poverty can rise as a country gets richer, whereas, for relative poverty, this ‘line’ is universal i.e. it’s the same standard for everyone across the world.
Poverty is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. Poverty means that the income level from one’s employment is so low that even basic human needs cannot be met. Poverty-stricken people and families might go without proper housing, clean water, healthy food, and medical attention. Each nation may have its own threshold that determines how many of its people are living in poverty.
The poverty level in many developed countries has decreased since the industrial revolution. Moreover, increased production has reduced the cost of goods, making them more affordable. Advancement in agriculture has increased crop yield as well as food production. There are, however, great uncertainties while coming up with an effective way to determine poverty in richer countries. Should poverty be determined on the basis of ‘absolute’ poverty or ‘relative’ poverty or estimated with a cut-off line that says those who are below it are absolutely impoverished.
Later, it was concluded that poverty could be measured in terms of a ‘relative’ poverty line that is widely accepted in advanced countries. According to Amartya Sen, a narrow focus on relative poverty has been valuable in recent discussions over poverty. In the postwar years, there was a widespread notion of eliminating poverty in developed countries on the basis of calculation of poverty lines derived from nutritional and other requirements. These estimates gave a comforting picture to the governments, and they thought that things have improved over the years.
So, the relativist approach was far more effective and adequate for determining poverty standards. The relativist approach sees deprivation in terms of a person or a household being able to achieve less than what others in that society do, and this relativity is not to be confused with variation over time. In relative concepts of poverty, the extent of poverty is judged not by some absolute historically defined standard of living, but in relation to contemporary standards.
By using these criteria, one is more likely to find that poverty exists as there are certain sectors of society that will always receive below-average income from other sectors of the society. The drawback as such of a relativist view is that poverty simply cannot be eliminated, and no anti-poverty programme can ever be really successful. It also has implications such as in the case of severe recession or depression, when there is decline in prosperity and a lot of additional people tend to be in misery. This situation may not show a sharp increase in relative poverty level because the relative picture does not change much even during recessions.
Amartya Sen given strong arguments over famines. He states that access to food is about the relation between income, politics and food supply. He also states that famine is likely to happen if this relation is disrupted.
Ownership partnerships are something of an entitlement. An entitlement relation applied to ownership connects one set of ownership to another through certain rules of legitimacy. Entitlement relations in the private market economy cover the following:
1) Trade-based entitlement: One is entitled to own the things that they trade, with the approval of the willing party in a unilateral model or of the willing parties in a multilateral model. This explains the entitlement a person obtains towards the food they buy.
2) Production-based entitlement: One is entitled to own the thing they produce by arranging their owned resources or resources from other parties after accepting their expected demands. This explains the entitlement a person obtains towards the food they produce.
3) Own-labour power entitlement: One is entitled to their own labour power. Trade and production-based entitlement relate to their own labour power entitlement. This explains the entitlement that one obtains by working in the process of growing food.
4) Inheritance or transfer entitlement: One is entitled to what they are given willingly by another individual who legitimately owns it. This explains the entitlement one obtains when they have been given food by others with willingness.
In a socialist economy, production-based entitlement will not take place as the government will take over production activities. Such an entitlement will be possible only when one produces a product with their own raw materials.
A capitalistic economy that performs on the principles of a socialistic economy won’t allow control of one human being over another in the name of ownership, and restrict activities of bond labour for production.
In a market economy, activities with which a person exchanges what he owns to another person who owns a different set of commodities will take place. The alternate set of commodities a person would get for what he owned would be termed as exchange entitlement. “Exchange entitlement mapping” sketches all possibilities for the commodities owned by a person. It is used to determine whether a person is exposed to starvation or not, by examining the alternate set of bundles and checking whether it contains a feasible bundle including food, which the person might get in exchange.
The Exchange entitlement mapping also changes according to the economic class or ownership a person is associated to. For example, in case of landless labourers and landless sharecroppers.
An individual’s ability to avoid starvation depends on their relation with their ownership and exchange entitlements mapping.
The exchange entitlements not only depend on market exchange, but also on the social security schemes given by the government, including unemployment relief scheme, pension schemes, disability schemes etc. These relief schemes mention the conditions for a person to be eligible for certain entitlement. For example, a person who exchanges his labour power for a wage won’t be entitled to these schemes since they are considered employed. These programmes play an important role in eradicating the problem of starvation.
In a market economy, a person can exchange what they own for another set of commodities. They can do this either through production, trading or a combination of the two. The set of all the various bundles or alternative bundles of commodities that they can acquire in exchange for what they own may be called as the exchange entitlement of what they own. Exchange entitlement mapping is the relation that specifies the exchange entitlement for each ownership bundle. For the ownership a person has, they will likely be affected by starvation if the exchange entitlement set does not contain any feasible bundle that includes enough food.
Factors that affect a person’s exchange entitlement, given his ownership bundle, are:
To explain this article in short, I would like to give one relevant example.
If India produces a large amount of food (greater quantity higher than which can feed the entire population) and goes through shortage of food, it might continue to export its wheat to richer countries. This is because market demands are not a reflection of the buyer’s biological needs or psychological desires. They only reflect their choices based on their exchange entitlement relationship. If people of one region are not starving and have the money to spend, why would the market not sell the food to them, over a population who is in trouble? Under the logic of market, selling to the one with more money to spend makes more sense.
Sen also wrote four limitations of his entitlement approach.
In Poverty and Famines: An Essay on Entitlement and Deprivation, Sen recognised four limitations of the entitlement approach, each of which he mentions with little elaboration: