:: Article

why fight poverty etc

By Richard Marshall.

Perspectives series, The London Publishing Partnership & Enlightenment Economics, 2014

Herman Melville wrote: “Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well- warmed, and well-fed.” Muhammed Ali said that “Wars of nations are fought to change maps. But wars of poverty are fought to map change.” For many, a life of poverty is judged a crime. In the company of these it’s a bad idea to even look poor; as George Orwell wrote, ‘it makes people want to kick you.’

Poverty is higher amongst black and minority ethnic people than other groups in the UK. Within this group Bangladeshis have the lowest inequalities between incomes but the highest rates of poverty. Indians have the highest inequality between incomes and above average poverty rates. Hindus are more advantaged than Muslims. Culture, family structure and other elements affect how poverty is experienced and perceived. Understanding the differences is crucial for interventions. Research comparing different types of poverty in Bradford found Bangladeshis needed opportunities to get out of low paid restaurant jobs, (Average annual wage round about £6,000) whereas Afro-Caribbean men needed upskilling to access the full-time market. Hostility towards poor whites in poverty was also a feature although Harris Beider has done research to show the complexity of feelings towards poverty from within these groups. There is a nasty general hostility towards black and minority ethnic people across the board and perceiving them as poor is part of the cause for this.

Poverty has a geography. Thatcher labeled anxiety about the poor a syndrome about ‘those inner cities.’ In 1981 there were riots in Brixton, Birmingham, Leeds and Liverpool. There were riots again in Birmingham in 1985. The Tory government recalibrated their political messages in response to these events and fed off heightened anxieties , fear and disgust about the degraded poor, in particular the poor black and ethnic populations. Norman Tebbit managed to encapsulate the paranoia, fear, anxiety, snobbery and siege mentality of middle England when he blamed the failure to teach verbs, spelling and full stops in state schools as the reason for the riots in Liverpool. This happens a lot in the UK. If you want to have a short hand term for the uncivilized beyond the pale mob at the door you mobilize tropes of bad grammar. ‘Stop and search’ policies were introduced on the back of this unfocused emotional response. Hartlepool, Sunderland and Merthyr Tydfil have seen the same bubbles of drooling fear about the poor. A result of this kind of response is to make poverty seem too vast, too inevitable and those in it too ungovernable for it to be a solvable problem. ‘The poor are always with us’ is transformed from an accusation requiring action into a description justifying complacency.

The 2011 riots showed how negative ethnicity stereotyping gets buckled to the urban poor. And alongside the inner city estates are the outer city council estates where rather than transient populations there are permanent ones who feel trapped. Public policy talk about all these places tends to use rhetoric with the word ‘broken’ in it, such as ‘broken communities’ and ‘broken families’. Poverty, social problems and crime are locked together in these phrases. The trope oversimplifies the situation. As Julia Unwin says in her terrific little book, ‘these are disadvantaged but resilient communities that are capable of surviving shock events and can adapt and change.’ Two examples of thousands: a Dad’s Gardening project in Templehall, Kirkcaldy, and the Gellideg Foundation of mothers wanting to improve their community and provide childcare. A JFR report found that in the six deprived neighborhoods investigated residents emphasized the strength and tenacity of family and social networks. They didn’t buy into the rhetorical flourish of the politicians’ ‘broken society’ and ‘broken families.’ In Grimsby, for example, there’s a shared childcare system to help mothers get to the job centre and generally it is the case that examples such as this one, of how local groups and communities share resources around and manage poverty, are largely ignored by policy makers. That its more expensive to live in poverty (you pay more for your electricity, for example, because you live in places where it’s metered expensively) is something policy makers rarely focus on.

Anne Power’s Phoenix Cities is a study of regeneration ideas from Europe and the USA. In these cases physical and environmental restoration, economic development and social reinvestment supported by state leaders was premised on a clear vision of what these places could become. This is very different to the way the UK has handled issues so far. Here in the UK most policies are about shifting people out and getting better ones in rather than looking after the ones already there. London state schooling has exceptions to this. There are examples of different approaches in some schools where they have managed to positively transform the educational provision without kicking out the original community and bringing in the middle classes. In fact, largely thanks to the London Challenge’ initiative led by Tim Brighouse, London state schools have been one area of the UK which has successfully mirrored Power’s Phoenix City success stories in having an aspirational transformative vision and then delivered it for all. London’s state schools exam results are now higher on average than those in the rest of the country. Sadly, there are signs that anxiety and fear is beginning to erode the London experience and the rise of ‘alternative provision’ such as so-called free schools, palpably based on the fears and anxieties of people towards the poor, and in particular the black and ethnic minority poor, is creeping in to destabilize this hard-won but now threatened achievement. It’s those emotions that are swirling around everywhere at the moment. We see fear, disgust and a whole load of other emotions squatting like ugly toads in the souls of many UKers all being fed by our squalid and scared political leaders whose idea of leadership is to watch where the toads are taking people and then follow.

Anyway, this is the territory and this is just one of a number of pressing issues facing us. Perspectives offers four short sketches of ideas that might help us work out what to do next about a range of issues, including the one I’ve started with here, poverty. Jim O’Neill’s The BRIC Road to Growth’ warns that emerging markets are not an old story. The shift from the dominance of USA and Europe has happened. Talk of hegemonic Eurocentricism and Western dominance is already missing the big story. ‘Since 2010, for example, the increase in the US dollar value of GDP for the eight largest emerging economies has been more than $3.5 trillion, close to the equivalent of creating a new Germany.’

O’Neill looks at two consequences. Firstly, the growth elsewhere is due to alternative models of growth. The West needs to learn and adapt from this fact. The second is that Global economic governance hasn’t reacted to the changes and it needs to if it is to reflect the change.

What is the alternative model of growth? It’s something called ‘adaptive’ capitalism. It’s at the heart of what’s changing China and South Korea. O’Neil is careful to insist that it’s a two way process of learning that’s needed – the emerging economies have to learn from the West as well – but the worry is that it isn’t happening. The so-called BRIC economies are Brazil, Russia, India and China. Each year they increase the world GDP by the equivalent of a new Italy. ‘Even if China’s growth rate remains slower this decade than it was in the 2000’s, it will still attain a pace of economic growth never achieved by the United States over a ten-year period.’Innovation and eco-friendly technologies will become reality in these emerging economies before they do in the Western ones. By 2020 Germany will export twice as much to China than to Europe.

When I read that small presses are publishing literature from outside the European/USA block they tend to present themselves as being iconoclastic and pushing boundaries against a hegemonic Eurocentricism. In reality they are merely reflecting the new global economic reality. The attitude reflects a general denial of the facts. Things aren’t about to change. It’s already happened.Denial is a key to the governance of the world economy as well. The emerging economies are now matching the West’s old ones and policymakers, especially in the West, who presuppose dominance are harboring delusions of lost grandeur. Wake up and smell the coffee. The 2008 crash is described in South Asia as the ‘North Atlantic crisis’ not a world economic crash. The BRIC countries need to be part of the central institutions governing the world economy. They need to be part of the IMF, the World Bank and Europeans need to step back and realize that this is the new settlement. Arguments against current economic reality need to include this shift in the protests and debates if they are not to be pointless is O’Neill’s point.

Julia Unwin’s Why Fight Poverty argues that the UK must solve its poverty crisis and focuses on the emotional and sentimental thinking that ultimately provides obstacles for tackling the problem. This is hard-headed pugnacious stuff. Unwin argues that the public don’t support the end of poverty in the UK because ‘… powerful emotions get in the way: shame, fear, disgust, difference and mistrust are created and reinforced by our attitudes to poverty and the stories we tell about it.’ She accuses the political right of the unhelpful tendency to focus on individual agency and the political left’s focus on structural overhaul as causing the belief that poverty is inevitable. Unwin argues that poverty can be reduced but that to do so there needs to be a recognition of the attitudes that deform the debate and create a stalemate of inactivity. She argues that only by seeing people in poverty as being the same as us can there be change. Individual agency and structural overhaul must be taken together rather than discussed as competing alternatives. Welfare needs reforming but not piecemeal and alone. ‘We need to change how labour is rewarded, the type of work, opportunities for progression, stability and the number of hours, as well as the cost of housing, food, fuel, childcare and other essentials.’ As Unwin says, what all this means is that we need to start understanding how we support each other and not confuse having a well organized and well-designed social security system with changes needed to end poverty.

The North Atlantic economic crisis is created a new sort of job offer at the bottom end of the market characterized by rapid movement between employment and unemployment. There’s neither security nor progression there. And where there’s a growth of self-employment what we’re really talking about is a new form of casual labour. Graduate non-graduate distinctions are blurring as graduates enter a job market to take jobs traditionally filled by non-graduates. Persistent exploitation, and forced labour is increasing that ‘… often involves difficult, dirty and dangerous work, alongside threats or actual violence towards workers, and cramped expensive accommodation.’ Migrant workers are often in the vortex of this grim pool.

The housing market contributes to high levels of poverty. 3.1 million more people experienced poverty once housing costs are taken into account. And to compound this bleakness, essentials are getting more and more expensive. In 2012 essentials increased in cost by 3.7%, faster than the Consumer Price Index inflation. The cost of living has increased by 25% since 2008. The poor are under increasing and extreme pressure. And in the background social attitudes are becoming nastier – British social attitudes to poverty are increasingly unsympathetic. 23% of the population believe poverty is caused by character weakness or behaviour, a figure that rises amongst the over 65s. The belief that poverty is caused by social injustice is just 21%, a decrease from 29% in 1994. Child poverty is believed to be caused by bad parents. Support for welfare spending has decreased, especially among 18-24 year olds. 39% of people in the UK think there is ‘very little’ real poverty in the UK. Some believe that poverty doesn’t mater at all, others that it matters to individuals but not society as a whole. 54% think that if welfare was lowered it would encourage people to stand on their own feet.

According to this book, recent research supports the view that poverty squanders ability, capability and potential. Child poverty costs an estimated £29 billion. There is a strong relationship between poverty and low paid jobs and unemployment. Poverty is liked to poor health, both physical and mental. Health inequalities are costly. Poverty is linked with anti-social behaviour. The poor are more likely to be victims of crime than the non-poor. They are more likely to be offenders. Poor people pay more for basic goods than non-poor people. Deprived areas are most affected by the North Atlantic crisis.

Unwin asks why there’s so little support and sympathy for the poor. Anxiety about vulnerability, weakness and failure translates into shame, disgust and anger. These emotions prevent rational discussion and inhibit the ability to act. People think poor people are lazy despite the fact that over 50% of poor children live in working households. People think poor people are on drugs and drink too much, but only 7% are drug users and 4% dependent drinkers. Poor people are believed to be falsely claiming various benefits but fraud accounted for £10millon whilst official error accounted for £40million overpayments for disability in 2012-13. £150 million was overpaid on Jobseekers Allowance compared with £32billion in tax evasion. It’s all relative, but no one is making the comparisons fair.

Poverty is discussed in terms of blame despite Abrahamic faith making relief of poverty a major tenant of faith. Old Testament books Exodus, Leviticus and Deuteronomy highlight special provision for the poor and the New Testament pits the rich against the poor and demands the rich give up riches to help the poor. Charles Dickens, Thomas Hardy, Harriet Beecher Stow, Upton Sinclair, George Orwell, Walter Greenwood, Alan Sillitoe, Jeremy Seabrook, Neil Dunn all describe the poor respectfully and create empathy. Monica Ali, Karen Campbell, Stephen Kelman, Kerry Hudson, Lisa O’Donnell, Tim Winton, Irvine Welsh and Tony White are contemporaries whose fiction make poverty real. Owen Jones’ Chavs portrays the collapse of unions and working class solidarity and the way ‘working poor’ demonises the unemployed.

Recent portraits cast poor people as shirkers and scroungers such as ‘Shameless’ and ‘Benefits street.’ Documentaries from BBC Panorama and ‘Skint’ show poor people at fault in breaking their communities through laziness. Other programmes like ‘The Secret Millionaire’ and ‘How the Other Half Live’ are patronizing and paternal in their interests. The recent ‘Benefits Street’ was similarly unhinged in its presentation. Poverty has become a spectator sport. Unwin argues that to deal with all this we need a new social contract, a new language to describe it, a new way of thinking about the poor that is more fluid and less fixed, and that recognizes the wide variety of causes of poverty. She also suggests we need to think more carefully about employment, which is a way out of poverty for some so long as the work offers consistency and progression. But many jobs don’t. The Living Wage is a way of responding to this. The labour market is not free. It needs subsidies and taxes must pay for it. The housing market is too volatile and regional and needs to be managed through regulation and investment.

The economy is fast moving, complex and people in it are going to face crisis. Political leadership that recalibrates the emotions around shame, fear, disgust, difference and hostility is required if the administration and advocacy required to reduce poverty is going to happen. Nelson Mandela wrote, ‘ Overcoming poverty is not a task of charity, it is an act of justice. Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.’

Bridget Rosewell writes about Reinventing London. I find her diagnosis too coarse-grained to meet the challenges she identifies. She says there are four elements to the economy that need to be changed: ‘the structure of output and employment, enabling new activities and jobs to be created; the places people live and the kind of people moving into London, through appropriate planning and building, ensuring there is a suitable workforce; transport links and other infrastructure, so that people can get around easily; and communications, especially international connections, so that trade can continue to grow, London being quintessentially a trading city.’ Docklands, Croydon, Kings Cross and Heathrow are the four places she uses to focus her ideas.

Work has changed. In 1971 there were over a million jobs in manufacturing in London. In 2012 there were fewer than 200,000. In 1971 there were 400,000 service industry jobs. There are now a million. Jobs in banking and finance services has remained the same, at around 350,000. Service, entertainment, digital and new products employment are opportunities for London, argues Rosewell.

London is a low-density suburban city compared to high-density cities such as Hong Kong. Shanghai, Mumbai, Sao Paulo, New York, Hong Kong have all much higher densities than London. The City of London has an employment density of about 300,000 per square mile. Westminster is about 75,000. New York is about 900,000. Paris’s central business districts sits at about 90,000. Kensington and Chelsea is the most dense residential district, at 131 people per hectare. Barcelona comes in at 400. Westminster, the highest density residential district in London, is 300. What Rosewell is arguing for is for London to change itself in the light of the wide range of services, from finance to technology and that it needs to continue to develop to grow its economy. As an economic hub that can attract the people it needs for these high skill businesses it needs to become a city people want to live in. This is the core message, that good living space is part of what a great economic city needs. And for London to be good it needs to continue to develop its transport, housing and work links. Is she looking for a higher density of living space? Her suggestion is one to make Owen Hatherley weep; London is to be the city of thriving suburbs. The claims made by Rosewell are not always secure. At one point she claims that London’s education system has been improved by the introduction of Academies and free schools. This is certainly not an analysis that bears any scrutiny, and it made me suspect that domains I wasn’t as familiar with might also be prone to error. But this is a position paper and has to do its job with energetic pith to set the conversation rolling. Rosewell’s vision is certainly one worth reading, if only to challenge its recommendations and claims. I can see Owen Hatherley and Andrew Stevens kicking back a counter-swing to this one.

Rediscovering Growth: After the Crisis by Andrew Sentance begins by asking what has happened to economic growth since the North Atlantic crisis in the stricken economies affected by the crisis. It’s an interesting question, and one that has in the background worries that without growth governments won’t be able to contain public borrowing, reduce their debts nor establish a direction for economic recovery. It’s interesting to contrast those worries with China where debt is now twice the size of its GDP and yet payback doesn’t (yet) seem to make them blink. (give it five years, then we’ll see!) In the Western economies hit by the crisis there is still no return to pre-2007 trends in growth. None of the major G7 economies will grow more than 2% this year.

Sentance claims that there are lessons to be learnt from which more sustainable growth can be achieved. Firstly, he says that well-functioning and flexible economies can fix up. He thinks the UK economy is a good example. Its economy expanded on average by 3% between the late 1940’s to the 1970’s. The oil crisis brought it down. Between 1971 and 1982 growth averaged at less than 1%. But then between the 1980’s and 2007 it again returned to growth averaging about 3%, a trend that only stopped when the North Atlantic crisis struck.

Secondly he says we need painful adjustments in both economies and societies. Japan is a case where this hasn’t happened. It’s great at manufacturing but lousy at services and so its growth remains troublesome. Sentance thinks it is the failure to restructure its labour markets to include service industries that has prevented Japan from moving forward.

Thirdly he says that the next phase will not be like the last one. In the 50’s and 60’s growth was about an emerging middle class, the development of a mass market for cars, washing machines and radios etc. The phase that followed was based on financial deregulation, the opening of the global economy and the high tech communications revolution. Looking forward he suggests we look to new technologies, emerging business and consumer trends, alongside commonalities that he says are not quite in place – a supportive financial system and confidence in sustainable economic policy.

Finally, he thinks we can expect Northern Europe and the USA , alongside India and China, to be the main areas for economic growth across the world economy. He thinks elsewhere will be more variable. In the book he maps out how the financial crisis of 2007-8 brought things crashing down and then looks back to the 1970 crash where he sees uncanny parallels. He thinks the comparison with the 1970’s problem rather than the great Crash of the 1930s is much more helpful in trying to understand the contemporary situation. He discusses a New Normal of disappointing economic growth and thinks it will be persistent for some time to come. He then looks at the Nations who will be winners and losers in this new economic landscape and what governments will need to do to adjust to this New Normal. He then discusses the drivers of business success in this context and how the major western economies might exit it. He disagrees with fatalists who believe the New Normal will stick.

There’s a trove of interesting stuff in this little book and this is perhaps the best reason for getting hold of all four of them. They’re opinionated and so of course unlikely to please everyone all the time on everything. I’ve already grunted in disagreement with some of what Rosewell says. But they’re short and sharp, written by experts who know their stuff (despite my worry about Rosewell’s comments about education she is right to point out that London’s schools now outperform the rest of the country – she just was a bit quick to say how this had happened in a very brief aside – and there’s lots to get your teeth into elsewhere) and they are discussing some of the biggest of the big issues facing us. It’s about how we want to live and what are the credible options. They are certainly anything but the last word but they are digestible and have the benefit of finishing in a hundred pages or so.

Series editor Diane Coyle summarises the series nicely when she writes: ‘Perspectives are essays on big ideas by leading writers, each given free rein and a modest word limit to reframe an issue of great contemporary interest.’ Reading them invites peppy fustigation or pash. I liked Julia Unwin’s best. She writes: ‘We need a much better understanding of how we support each other, and how money – and other support – is passed around and within families before we can think about reducing poverty. We need to understand the very different experiences of poverty, and how gender, disability and ill health all influence someone’s chances of becoming poor. We need to know more about the role of culture, attitude and behaviour in shaping people’s experience of poverty.’

Richard Marshall is still biding his time.

First published in 3:AM Magazine: Sunday, February 23rd, 2014.