Friday 6. December 2019
#154 - November 2012

 

The eradication of poverty in a time of crisis

 

In phases of expansion, the poor are the last to gain; in recession they are among the first to suffer.

 

In an economic crisis, to mark appropriately the ‘International Day for the Eradication of Poverty’, October 17th, presents a formidable challenge, as the stated objective appears more remote than ever. States’ need to balance public finances and reduce public debt leads to programmes of ‘austerity’ that threaten to turn recession into depression. Fostering ‘growth’ as a primary remedy would deepen inequalities in the often-falsified hope that wealth will benefit the poor as well as ‘wealth-creators’. In fact, the image of ‘trickle-down’ is all too accurate: in phases of expansion, the poor are the last to gain; in recession they are among the first to suffer.

The European Parliament’s ‘Intergroup’ on Extreme Poverty and Human Rights, hosted by Sylvie Goulard MEP, nevertheless met on October 17th to discuss such challenges in both a global and a European dimension, on the understanding that solidarity in the fight against poverty is indivisible.

 

Abhijit Banerjee, author of Poor Economics, emphasised the paramount need to respect people in poverty by refraining from facile assumptions about their priorities. Well-designed policies come from full consultation and proper trials, with care taken to understand the cultural context in which a given policy will be implemented. Values, too, are always open to question. The Western liberal notion, for example, of the self-evident virtue of entrepreneurship, may seem a delusion in rural India where ‘self-employment’ commonly means scratching for survival. Diana Skelton of ATD Quart Monde, challenged another favourite Western slogan, that ‘competition breeds excellence’. ‘Excellence at what?’, she asked. In such matters as the distribution of humanitarian assistance, ‘competition’ and self-promotion can be lethal. She cited the success of an educational programme in Madagascar founded on the ‘pedagogy of non-abandonment’ - the reverse of competition. (Over against the utilitarian concept of ‘the greatest good of the greatest number’, the Christian pursuit of the ‘common good’ requires precisely solidarity, ‘non-abandonment’.

 

Perhaps surprisingly, much of the European discussion focused on the key role of the European Central Bank. Its primary mandate is not to promote growth but - in good times and especially in hard times - to defend against excessive inequalities through a triangle of ‘equity, efficiency and stability’. Here, ‘stability’ does not mean maintaining an economic status quo however unjust, but limiting the shocks to the most vulnerable European economies. ‘Price stability’ protects those poorer sectors of society who lose most by inflation, as their sparse assets are held in cash and their pensions otherwise fall behind inflation.

 

How can public spending be controlled without tearing apart essential social safety nets? How can losses caused by bank failures be shared more fairly between a bank’s depositors and its shareholders? Such urgent moral questions, seemingly a world away from the questions dominating the US Presidential debates, show that the European ‘social model’, under manifest strain, is far from defunct.

 

Frank Turner SJ

JESC

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