The Exclusion of the Poor
The Classic Liberal Quaker, Letter No. 33
January 15, 2002Poverty is not only low income and no assets. It is a condition of exclusion from the institutions and organizations of modern life. In many countries law courts, banks, education, health services, roads, water, electricity, even respect, are not available to the poor. It is harder for them to get permissions to open businesses, and they are often forced to pay bribes. I first became aware of this in 1972, when Robin and I wrote a check to a Kenyan family. When they tried to bank it, they were told they needed to file a lengthy application, with two recommendations by "respectable persons," to open an account. Neither an illiterate person nor one with no connections would have been able to do that.
In most of the world, the poor live in a society distinct from the affluent - different institutions, organizations, and customs, and little communication between the two. The poor are looked down on and denied the courtesies available to others.
I have told you how I have wandered through the slums of all Latin American capitals except Havana, ten African capitals, and the Philippines. Others have done this too, making the acquaintance of the poorest of the poor far more intimately than I ever did. Their reports have recently been assembled by the World Bank into two volumes, Voices of the Poor Can Anyone Hear Us, available on the web at www.worldbank.org/poverty/voices/reports.htm#cananyone This Letter is based largely on those reports. Items in quotation marks are direct quotes from the two volumes.
"Poor people's experiences demonstrate again and again that informal rules or social norms are deeply imbedded in society, and that 'rules in use' override formal rules." These rules-in-use are prejudiced against the poor. Laws for minimum wage, safety and cleanliness in factories, child labor, and maximum hours of work might just as well not be written; they are constantly ignored if the worker is poor.
The poor lack power. "We poor people are invisible to others, just as blind people cannot see, they cannot see us." Powerlessness "stems from dependency on others, and helplessness to protect themselves from exploitation and abuse because of their dependence." The poor cannot get jobs for which they might be qualified, because roadblocks, such as health examinations and papers to be filled out, stand in the way.
"Poor people say their interactions with both the state and employers are marred by rudeness and humiliation. . . They feel enslaved by their crushing daily burdens, by depression, and by fear of what the future will bring." Public services are designed for the affluent. "The lack of basic infrastructure, particularly roads, transport, and water are seen as defining the characteristics of poverty." These services are provided in the affluent areas of the country only.
"Illness is dreaded all over the world. For poor people dependant on their daily labor, with few cash or other reserves, severe illness can throw a whole family into destitution." "Literacy is universally valued as a means to survive, avoid exploitation, and travel. . . While poor people value education, official and unofficial expenses required even for `free' primary education is considered high and returns low."
"Many poor households are stressed and crumbling, but gender norms and inequity remain intact both within the household and in institutions of society. . . Social norms still support men's authority and indeed men's `right' to beat women, and social norms dictate that women should suffer in silence."
"Poor people experience the state as ineffective, irrelevant, and corrupt. While they appreciate the importance of government-provided services, corruption was experienced by poor people in every sphere of life." "Lack of information and the need for documents, which state officials make difficult to obtain, limit poor people's access to state-provided services."
"The local elite and local leaders act as effective gate-keepers to government-provided assistance, either diverting resources to their own use, or further deepening their power over the poor by becoming the resource distributors." The police are often seen as brutal, obsessed with their authority, and ready to beat, kick, or kill the poor. They are not seen as a fount of justice. "Poor people report living with increased crime, corruption, violence, and insecurity amidst declining social cohesion."
Usually the poor have no property rights, even for the land on which they live and produce crops. In most less developed countries, the land of the poor is held by the state, and the poor can use it only with government permission - which demands bribes. If they could buy, sell, or mortgage their land, they might acquire the financial capital with which to start businesses.
How then do the poor manage to live? Mainly by helping each other in community-based social networks, such as family, clan, neighbors, and kin. "Poor people invest heavily in social relations for psychological, cultural, and economic well-being." These networks are known as "social capital." Villages with higher social capital "are better able to organize for collective action" and have higher incomes. Nevertheless, community-based organizations "often serve only as coping mechanisms that substitute for the role of the state rather than as a complement to state efforts."
State support for the poor is not totally worthless. Many of the poor reported efforts by the state that increased agricultural productivity or brought new handicraft industries. By and large, however, the state is so full of corruption and greed that moneys intended for the poor are sifted into the pockets of their presumed care-givers.
Nongovernmental organizations (NGOs) fare a bit better than the state. Nevertheless, they too are often mired in misunderstanding of the problems of the poor. Paternalism (telling the poor what they want rather than listening to them), and sometimes corruption muddy NGO relationships further.
Since the poor do not trust their governments, nor the police, nor always NGOs, whom do they trust? Mainly the head man of the village, or other individual or group within their own social structure, because they know these people do not have ulterior motives. In approaching "what-to-do-about-it," I believe the World Bank summary of reports fails heavily. Their main suggestion is to promote communication and other links between the state and the poor, so that the state will be more understanding of what it means to be poor. While this may help a bit, it assumes a willingness or interest on the part of the state that I believe is mostly missing.
I come back to my own studies of history, in which I tackled the same problem for northwestern Europe and Japan. In the Middle Ages, these areas suffered the same chasm between powerful and powerless that is now felt in the Third World. How did they come out of it? - for come out of it they did. They came out when the powerless gained the power to make demands from the bottom up, not from the conscience of people on the top.
This happened within a feudal structure, the counterpart to the tribal or village structure of the Third World today. The poor (serfs, slaves, and free workers) had something to offer the rich, if only in the military defense of some rich against others. The poor formed organizations and bargained with the rich, extracting power in return.
Only over centuries (as I explain in my book, Centuries of Economic Endeavor) did it slowly increase on the part of merchants, farmers, and tradesmen, who took power away from feudal lords, nobility, shogun, king, and emperor.
How will this happen today? Slowly, slowly, slowly. How can the poor gain power, when they have none now? They can do it only by producing what the rich or the rest of the world want. Outsiders must be patient yet determined. What can we do? Probably nothing on a national level.
But NGOs and church-related organizations, not dependent on central government, can mobilize resources and capital in favor of the poor. We can also teach them skills. But we must not rule, or even suggest. We must simply fit in with whatever the poor ask of us, that we may consider worthwhile. (Don't accept whatever they ask, however; use judgment).
As a class, the poor are not ignorant, as many believe. My favorite story is of Peruvian Indians who were scorned by the twentieth-century elite. When land reform occurred in the 1960s, the government decreed that landowners had to prove their rights to land. Indians brought to court documents granted them centuries earlier by the King of Spain, to claim their titles. It worked. Whoever said the Indians were ignorant or unable to defend themselves if given access to modern institutions, is the one who is ignorant.
Another way we can help is to reduce our trade barriers against textiles, clothing, shoes, and other goods that the poor of less developed countries can produce. We do not do this today because our own industries and their workers complain. Workers in a losing industry (like U. S. textiles) have a tough time. But industries change (out with the horse and buggy!), and workers must flex with the changes. We need to help them retrain and find new jobs. But protecting their industries with tariffs merely postpones the changes and makes them more painful.
What we need is consumer complaints, insisting that our companies buy the production of the poor in less developed countries. "Trade, not aid," to use an old slogan of three decades ago, when I was in my prime as a foreign observer in less developed countries.
The poor are excluded from the modern institutions of their own countries. Let us not also exclude them from ours.
Sincerely your friend,
Jack Powelson
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