Our continuing failure to tackle poverty is clearly playing on the minds of growing numbers of people. It is not just the consequences of absolute poverty in the poorest nations which tugs at our heart strings, many feel we could and should be doing more for those on our own doorsteps for whom there appears to be little hope for a decent life.

But the debate is coloured by a growing pessimism about the prospects for converting our moral aspirations for a more inclusive world into reality. I think this is because we are stuck in a traditional, though not dishonourable, mindset when it comes to addressing this age-old problem. Whether we are discussing the chances of eradicating child poverty at home by 2020, or the failure of the rich nations to deliver on the promises made at Gleneagles last year, the solution to poverty is generally assumed to rely on increasing the redistribution of wealth from the haves to the have-nots.

The alternative, to create an economy in which all people have access to viable opportunities and so take responsibility for their own economic well being just does not figure. Why the tunnel vision? Three reasons: a lack of belief in the possibility of transformative social change, a commitment to a particular ideological position, the claims of which are not borne out by observable evidence, and misconceptions about what is possible in terms of economics.

In recent years, defenders of the status quo have won the argument that "there is no alternative" with depressing ease. As far back as 1995, Tony Blair claimed that "the determining context of economic policy is the new global market." Little wonder then, that despite his professed desire to do something about poverty, at home and abroad, Blair refuses to question assumptions about the fixed nature of current economic arrangements. As one of the most powerful men in the world, even he feels unable to challenge prevailing orthodoxy. The economy, it seems, is no longer within the remit of politicians!

Political memories must be very short. The changes to global economic arrangements, which began in the mid-1970s, and were carried through with such resolve by Thatcher and Reagan, offer proof that ambitious politicians can drive through change. Admittedly the objective of the particular changes they championed fitted rather more neatly with the desires of the wealthy elite, the power of which to influence policy still flies in the face of our collective commitment to democratic principles. Nonetheless, it was politicians who made it happen. Thatcher and Reagan may have turned economics away from the inclusivism of the post-war years, but they succeeded in their aims by offering clear leadership, new ideas, and by generating sufficient electoral support. There is no reason why the current generation of leaders could not do the same, but towards more inclusive ends.

While Tony Blair may claim to hold quite different core values than his Tory predecessors, his ideological belief in the power of market forces to put the world to rights is, if anything, stronger than Margaret Thatcher's. But if the economic revolution of the last 30 years has increased the wealth generating capacity of the economy quite impressively, it has also ensured that the principal beneficiaries are the already wealthy. Cynics will say that this was precisely Thatcher's intention, but are we to believe the same of Blair?

We should not be surprised that a period of rapid economic expansion driven by the purposeful deregulation of markets should be accompanied by deepening poverty at the bottom and growing inequality within and between nations. This has always been the case: The industrial revolution brought dreadful poverty, only ameliorated by the efforts of philanthropists, charitable institutions and eventually state regulation of the market to ensure a degree a social equity. The massive economic spurt in the United States at the end of the nineteenth century forced a similar response: the extent of poverty amidst plenty not quite fitting with the image of a land of opportunity for all. And today in India, unprecedented growth is failing to deliver any improvement in the quality of life for at least half the population - the half that have always lived in absolute poverty.

Whatever market-driven economic growth does achieve (with the considerable help of state-directed redistribution through taxation) it clearly fails to extend viable economic opportunities to all citizens. If, as the "no alternative" lobby argues, current economic arrangements really were the only option, this would give great cause for pessimism. But what if there is an alternative? What if our lack of belief in the possibility of more inclusive economic arrangements is unfounded?

Economics is not as complicated as some economists and commentators would have us believe. All tangible economic activity consists of human beings applying their labour effort to the naturally occurring resources of the planet in order to convert them into things that people need and want. In the modern world, many derivative activities add additional levels of complexity, but the ability of the market mechanism to ensure equity in the distribution of the rewards from economic activity depends entirely on the degree to which access to opportunities and resources is equal in the first place. Where access is unequal, the market mechanism rewards those individuals, groups or nations that, for whatever reason, have the best access, and it fails those that have the poorest access. If access is grossly unequal, as it has been for most of the last 10,000 years, then relying on market forces to deliver equity - or to reduce poverty - is at best naïve, at worst dishonest.

Instead of trying to persuade the better off to give up a greater share of their wealth in taxation, we need to make the moral case for greater equity in access to economic opportunities. We need to persuade all people that there is an alternative to current economic arrangements, and that it would be in their best interests to support it. In a properly functioning democracy this should be possible. After all, only a tiny minority of super rich individuals stand to lose from the gradual transformation of economic structures and institutions that would be required to pave the way for a more inclusive society.

We are not talking about nationalising the means of production, distribution and exchange, or of placing any additional restrictions on individual freedom. Moving towards an inclusive economy simply requires us to alter the context in which the market mechanism operates so that it can continue to supervise the creation of wealth but also ensure its equitable distribution. We need to open up the economy to all who are prepared to take responsibility for their own wellbeing, and extend the economic freedoms currently enjoyed by a minority of citizens globally, to everyone. It cannot happen overnight, but it can happen, if only enough people start believing in its possibility.

NO COMMENTS

LEAVE A REPLY

Captcha image