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Saturday, September 07, 2013

'Poverty Used to be Seen as a Social Good'

Via James Choi:

Poverty used to be seen as a social good: Prior to the late 18th century, the dominant school of economic thought saw poverty as a social good, essential for economic development. It may well have been granted that, other things being equal, a society with less poverty is to be preferred, but other things were not seen to be equal. Poverty was deemed essential to incentivize workers and keep their wages low, so as to create a strong, globally competitive, economy. Nor did the idea of what constitutes “economic development” embrace poor people as being necessarily amongst its intended beneficiaries. There was also widespread doubt about the desirability of, or even the potential for, governmental intervention against poverty. ...
[There] was little reason to think that poor people had the potential to be anything else than poor. Poverty would inevitably persist, and was indeed deemed necessary for economic expansion, which required a large number of people eager for work, and avoiding hunger was seen as the necessary incentive for doing that work. ... [Beyond] short-term palliatives to address shocks, there was little or no perceived scope for public effort to permanently reduce poverty. And a world free of poverty was unimaginable—after all, who then would be available to farm the land, work the factories and staff the armies?
--Martin Ravallion, "The Idea of Antipoverty Policy"

These ideas persist in a certain political party.

    Posted by on Saturday, September 7, 2013 at 03:24 AM in Economics | Permalink  Comments (28)


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