|Jorge Aliaga Cacho|
Our essay question is: why are poor countries poor?
I wonder if it would have been productive to find out if the poor countries are poor?
However, specialists, theorists, econimists, sociologists, etc, preferred to answer the first question and this is undestandable. All their intelectual formation has been restricted to the frame of values adopted from western civilization.
Before analysing Malthus, Marx, or in our present work Hettne. I wonder if would be stimulating to the development of our essay to quote a native intelectual from a so called poor country.
Jose Carlos Mariategui wrote in 1928 the following:
Until the conquest there developed in Peru an economy which sprouted spontaneously and freely from the soil and the Peruvian people, In the Inca Empire which consisted of agricultural and sedentary communities, the most interesting thing was the economy. All the historical accounts agree that the inca people, hardworking, pantheistic, and simple, had a high material standard of living. The necessities of life wer abundant; the population grew. The Empire was ignorant of the Malthusian problem’ (1) Jose Carlos Mariategui, “7 ensayos de interpretación de la realidad peruana”,p.13, Amauta, 1978, Lima). (Translation: Jorge Aliaga).
According to Mariátegui the collectivist organisation under the Incas had enervated the individual impulse of the indians but had developed in them, in extraordinary way, and in benefit of their own regime, the habit of a humble and religious obedience to their social duty. The incas, according to Mariátegui, got out of this virtue all social utility posible. The Incas valued the huge extensión of their territory, building on it, roads and irrigation systems, tambos, etc. The Incas further extended their territory by conquest, but it is unquestionable that they used the collective labour of their peoples, their common effort, etc, in fruitful social enterprises. Was the later bias?
The British archaeologist Ann Kendall has recently launched aproject specifically designed to study and restor Pre-Columbian irrigation systems: “The Cusichaca Trust”. In 1993, one of her project documents reads: ‘Before the incas arrived the area was aldready denesely populated and cultivated, but they set about remodelling the landscape -constructing terraces, extendin earlier Canals and building new ones. Populations were relocated to exploit the land more intensevely and one of Cuchisaca’s main functions would have been to provide Machu Picchu with maiza, the principal and sacred inca crop. Dr Kendall’s team was made up of British and Peruvian specialists and students, helped by multi-national volunteers. Among the specialists were soil-scientists, botanists and zoologists. Their research showed that without doubt in Inca times, when the irrigation systems were functioning, the región could have supported many times the present population and also produce an agricultural surplus.
The British scientist of our latter paragraph undoubtedly, confirms what José Carlos Mariátegui wrote in 1928.
Bjorn Hettne has a similar interpretation of Mariategui´s work when he writes: ‘Mariátegui claims that the Spanish conquest meant a retardation, and that subsequent development of capitalism was perverted partly by foreign economic influence and partly by the domestic alliance beteween the bourgeoisie and the aristrocracy’. (3) “Development Theory and the Three Worlds”, page 102, Longman, London, 1990.
Povery has been defined and measured in different ways. The most common is an income or consumption centred-approach where the poor are identified through having an income, including their own producction insufficient to provide a minimum standard of living. It is a quantitatively defined standard of living in different regions of the world. Poverty may be understood as relative to prevailing social standards, rather than defined at an absolute global level. Poverty can be also understood in terms of capabilities rather than commnad over godos.
However our purpose is to find out the origin of poverty. How did the expansión of European influence and rule change economic activity in different parts of the Third World? How did colonial powers contro the organisation of labour in the colonies? How did the reorganisation of local labour affect the development of what was to become the Third World in the longer term?
A sustain European control of the colonies the metropolitan governments saw neccessary to organise the productive capacity of the colonies in order to generate sufficient income to sustain the administrative and military costs without which the metropolises would not have had control of its provinces: Colonies apart from being requiered to be self-financing, they were also expected to contribute to the economies of their metropolitan rulers. During the period of transition from Feudalism to Capitalism colonies had to be integrated into an international economy being constanly reshaped by the dynamics of capital development on a global scale.
The economy of the colonies within the international división of labour occurred through the production of commodities for export, above all from extractive industries and tropical agricultura: peasants were encouraged to grow particular crops for sale and export, by various means, ranginf from coersion to more indirect pressures, including the need for for a money income to pay taxes and to purchase the new kinds of godos and services introduced with colonialism. Therefore, traditional crops were abandoned to satisfy the demand of products by the metropolises.
Therefore, we can say that, apart from the effects of natural famines, poverty, has been caused by men. By western men. And we wonder if they really saw the need of solving hunger and povertyin the world? Francesco Giuciardini in his “Discorsi Politici” of the early sixteenth century wrote: ‘The poor are part of the neccessary furniture on the earth, a sort of perpetual gymnasium where the rich can practice virtue when they are so inclined’. No suggestion of abolishing poverty. Off course these ideas have developed progressively.
‘A man can be neither a saint, nor a lover, nor a poet, unless he has comparatively recently had something to eat’. These view was expressed by the neo-classical economist Reverend Philip H. Wicksteed at the turn of this century. Here we can see the recognition of basic neccessities. In 1945, Lord Keynes expressed the twenty century liberal and humanist view which believes in progress as a normal state of affairs if only reason is allowed to prevail, and who recognises economic development as the neccessary foundation for other forms of advancement of mankind. (5) Benjamin HIggins , “Economic Development”, Chapter 1, Constable, London, 1959.
Why is that scientific writers cannot find an answer to our question. What is the cause of their errors?
According to Malthus, among the scientific writers on political economy, there is a precipítate attempt to simplify and generalize. ‘While their more practical opponents draw too hastly inferences from a frequent appeal to partial facts. Thes writers run to a contrary extreme and do not sufficiently try their theories by a reference to that enlarged and comprehensive experience which, on so complicated a subject, can alone establish their truth and utility’. (6) Malthus, “Principles of Political Economy”, Introduction, page 6, William Pickering, 1836.
When we look at the components of poverty: famine, disease, unemployment, overpopulation, environmental degradation, we consider that it would be appropiate to consider a historical analysis of this situation created by colonialists and also to review th validity of their theories of development which, with few exceptions like the Asian Tigers, have not improved the situation of the ‘poor countries’. The causes of poverty in the so called Third World can be found in the situation created when vast amounts of wealth flowed into Europe from plunder, conquest and colonization of many of the pre-capitalist societies of Asia, Africa and Latin América. The treasure extracted from their colonies by Spain and Portugal, for instance, went to buy commodities from north-western Europe.
Henry Bernstein, in “Poverty and Development in the 1990s” states that:
´late feudalism was marked by dynastic wars for sovereignty within and between existing political territories, and the emergence from them of new states confrontig the effects of the massive costs of continuos expeditions, the disruption of the agrarian economy and a series of peasant uprisings. The need of these states for further sources of revenue stimulated the search for, and seizure of, the wealth of other societies’. Further Bernstein quote, the following passage by Wolf which I think is valid to highlight the importance that we give to the process of European expansión in the spread of poverty: ‘The movement to the New World, the establishment of forts and trading posts along the posts of Africa, the entry into the Indian Ocean and the China Seas, and the spread of the fur trade through the boreal forests of América and Asia all represented ways in which these goals were sought and fulfilled. New godos entered the circuits of Exchange: tobacco, cacao, potatoes, tulips. African gold and American silver, as Braudel has said, enabled Europe to live beyond its means’ (7) Henry Bersnstein, “Poverty and Development in the 1990’s”, page 172, Oxford University, 1992,
Africa was divided between Britain and France, substantial areas were also seized by Belgium, Germany and Portugal. European capitalists and polititians were then involved in the debat of what is best for Africa: ‘imperialism of free trade’ or direct political rule which caused unnecesessary costs? European rule of Africa´s territory rose from 10% in 1876 to 90% in 1900.
Lenin argued that the expansión of colonialism in this period was due to the need to find new oulets for the export of capital for two reasons. The first reason was competition for overseas sources of raw materials and markets for European manufactured godos (both in ever increasing volumes). The second was the search for investment opportunities that would be more profitable than those avaiable in Europe itself.
Janet Bujra opines similarly when she writes:’in he period of European Mercantilism (the accumulation of capital via trade) Spain, Portugal, England, Holland and France vied with each other to dominate the trade to and from particular areas –a trade in precios metals, luxury godos and slaves. In more fully fledged phases of European capitalist development (when the accumulation of capital began to derive from the harnessing of working-class labour power to new technique of production), a whole variety of demands were made of less economically developed regions of the world to supply the essential raw materials without whcih Europe´s (or more particuarly, in the first instance, Britain’s) industry could not operate, to buy the finished good.s which were the products of its manufacturing sector; to become investment areas for the weath accumulated through European industrial expansión, so that more wealth could be crated to feed back into the same process; to absorb Europe´s surplus population; and so on. Different areas might play different roles, and the significance ot their contibution to the metroplitan expansión might change over time.(8) Idem, page 146.
In India the situation imposed by colonialists was no different from that of other dominated regions. David Potter has written quoting Arnold: ‘India was increasingly perceived ‘as financial asset of enourmous potential value to Britain’s industrial economy – a captive market for its manufacturers, a source of foodstuffs as well as coton, jute and other industrial raw materials, and, in its railways, plantations and public utilities a dependable recipient and multiplier of capital investment. (9) Idem, página 216.
In order to establish the causes of poverty I believe that it is also important to consider the ideology which is embodied in theorists, as Borja explains, and have influenced our ideas on levels of material development and forms of social organization. Assumptions were held that the dominated regions were ‘less advance’ than Europe and accordingly Europeans thought to have certain rationale for intervention. In Borja´s opinión such a rationale existed as part of the ideology that justified eimperial expansión. But in many cases it is open to question as to whether this was the real stte of affairs. (10). Idem, page 146.
According to Malthus (1766-1834) the human race tends to reproduce in geometrical progression while food supplies can only growth arithmetically. As the population grows, Malthus argues, there would be a fall in average output of food per head which will cause misery which will be ‘resolved’ by famine or war. Malthus´critics think that his support for the landed gentry blinded him to the view that extreme misery was caused not so much by diminishing returns of labour as the population grew, but by the lack of political bargaining power of the peasantry vis-á-vis the landlords.
Contemporary thinking on population presents us with a ‘New Malthusian’ versión which shares Malthus´original view that population growth is the major factor in causing poverty, but whic differs from Malthus in the belief that human intervention can put a check on population growth (throught birth control).
The more modern versión is demographic determinism, i.e. that the weight of population itself is the cause of problems. The New Malthusian view sees it as imperative that people should be persuaded or forced, especially the poor, to have fewer children. They see the tendency to population growth as a constant factor in human history which needs no explanation in itself. However, they do not explain the reason for population growth.
Some argue that the causes of population growth are those aspects of socio-economic life which which the New Malthusian put forward and that to be able to understand the causes of high population growth, and of fertility decline where it has occurred, would give us clues on how to reduce fertility rates more effectively in those countries for which population pressure mounts by the decade. Others argue that while refugee migrations, (e.g. Ethiopian famine), has avoided the worst effects of some of the other so called Malthusian ‘checks’ to population growth, however, population mobility is only one solution to regional imbalances in population/resource ratios. According to Allan and Anne Findlay, ‘a more satisfactory solution in the short term is the movement of food resources into areas which are food deficient and in the long term the exchange of trading of equipment, ideas and technology to permit the increased agricultural potential of these regions. In their opinión drought may be unavoidable but famine is totally avoidable’.(11) Allan and Anne Findlay, “Population and Development in the Third World”, page 43, Routdlege, 1991.
The Malthusian view is inappropiate to establish the causes of poverty because it ignores the role of technology, trade and population mobility. However, it remains true that population growth requires increased food producction.
Malnutrition, undernourishment, seems to be due to the failure to increase investment in agricultural production and also because of the inability of many poorer countries to be able to organise and pay for food imports. There are, however, encouraging examples such as the case of India which show that countries with rapidly expanding population can make remarkable advances in increasing their agricultural producction. Contrary to Mathusian claims. India has managed to increase food grain output at approximately the same rate as population over the past thrity five years.
The World Bank’s Annual Development Report in 1990 using a ‘poverty line figure’ of US $370 dollars for international measurement and comparison estimated that in the mid-1980s 1116 million people in less developed countries were living in poverty. This figure represents a third of their total population. Using a lower income measure of USA $275 dollars a year the report showed that 660 million people of the Third World were struggling for survival below this ‘extreme’ poverty line..
This figures so far show us the pathetic situation of hundreds of millions inhabitants of the Third World. However, it is not just a question of lack of adequate income or assets to generate income. Other elements such as physical weakness due to undernutrition, sickness or disability, isolation sue to peripheral location,lack of accessto goods and services, ignorance,illiteracy, are also part of the problema. As is the vulnerability of these human beings to any kind of emergency and contingency. Further, the lack of power in all spheres of life. (12) Henry Bernstein, “Rural Livehoods”, pages 17,18; Oxford University, 1992.
Betsy Hartmann and James Boyce’s book “A Quiet Violence: view from a Bangladesh village” has recorded how people really perceive their poverty I was Young then and worked very hard. I used to husk rice to make money. I made four hundred taka that way, all by myself! That was enough to buy two duns of land in those days. Children were coming and I knew we would have to feed them. My dream was to buy two duns so we could support our family. With my husband’s land and the and the half dun I brought as my dowry, we would have four duns of land! My husband didn’t think like me –he didn’t see ahead to the future or appreciate my intelligence. His mother was old and dying, and he wanted to spend my money on medicines for her. He told me, ‘if you want to keep your money separately, I´ll divorce you’. ‘I am your husband and what’s yours is mine’. I didn’t want to be divorced, so I gave in. All my money was waisted’. How many injections and medicines did the doctor gave his mother-and off course she died. We were left with only two duns of land. When my father died, I inherited a cow which we sold to buy more land. But we coludn’t manage. Each year another child came and our situation grew worst. We had to borrow money to eat. Sometimes neighbours woud lend us money without interest, but we often had to sell our rice before the harvest. Money lenders would pay us in advance, and take our rice at half the market Price.No mater how hard we worked,we never had enough cash.We stared selling things –our wooden bed ,our cow,our plough. Then we began to sell our land bit by bit. Now we have less than one dun left, and most of that is mortgaged to Mahmud Haji. (13) Hartman and Boyce, “A Quiet Violence view from a Bangladesh villaje”, pages 162,163, 1983.
From the last passage we can deduce that factors which contribute to rural poverty are the structures that give landlords and merchants their power.
There are two approaches to understanding rural poverty: the residual approach and the relational one. The first views poverty as a consequence of being ‘left out’ of processes of development, on the assumption that development brings economic growth which, sooner or later, raises everybody´s income. This is what we called the “trickled down effect”: that the benefits of growth trickle down even to the poorest groups in society in the form of increased opportunities to earn (more) income
According to Bernstein the aim of development policy is to target the rural por in order to integrate them into the processes of development they have been excluded from. In other words: integrating them more deeply into markets and devoting more of their resources and energies to producing godos for sale (commodity production).
The second approach, relational, investigate the causes of rural poverty in terms of social relations of production and reproduction of poverty and power, that chacracterize certain kind of development, and especially those associated with the growth and expansión of capitalism. The relational approach ask questions like: are some poor because other are rich? Are some rich because other are poor? What are the mechanisms that generate both wealth and poverty as two sides of the same coin of, capitalist, development?
When we look at satisfied measuremente and analysis to find an answer to these questions we find that they reveal effects rather tan causes. The data cannot respond to questions like: why some countries’ land is distributed unequally. The ‘measurable’ factor gives a mislieading picture of rural poverty, and of the identities of the rural poor. The latter suggests that while analysing forms of producction is important to consider land,labour, livelihoods, etc., are only part of a greater picture which which includes the class and gender relations, division of labour, markets and linkages of specific agrarian structures or particular national economies, as well as the international economy. (14) Idem, pages, 24,25.)
The Peruvian economist Carlos Malpica considers that the negative consequences of foreign credit, the deterioration in the means of Exchange in foreign trade and the different wayis in which Peru loses foreign exchange in the financial and non financial services makes clear that the rich countries instead of helping uso ut of poverty are exploiting us in such a way that with each day it becomes more difficult to come out of poverty. The rich countries, according to Malpica, and especially de USA, have created mechanisms which influence the economy, media, pollitical parties, trade unions, church, military. Through these mechanisms they have managed to make Peru and the rest of Latin America more dependent. (15) Carlos Malpica, “Los dueños del Perú”, page 17, Peisa, Lima, 1970.
Nearly three quarters of the world’s population, according to 1982 statistics, lin in rural areas. Another global difference concerns agricultural productivity, specially in relation to food. In the USA, for instance, a single farmer feeds, on average sixty five people. By contrast in some parts of the Third World, especially Africa, farmers cannot feed themselves. However, the nature of the global food problema is not aceptable because there is not a global food problema. The latter statement is supported by the following figures: in 1984 world grain production reach record levels,it grew by 7% as against 1983, while population grew 2%. According to Aidan Foster-Carter: each of us needs the equivalent of some 250 kg of grain per year. Well, the 1984 harvest yielded 50% more than this, for every person in the world. (16) Aidan Foster-Carter, “Sociology New Directions”, pages 143, 144; Causeway Books,London, 1991.
The latter paragraph shows clearly, shy the poor countries are poor. Among factors like land tenure, transport, scientific and mechanizes farming, lack of investment etc., poverty is also tu by methods of distribution.
The catch according to Foster, lies in the distribution and use of the grains grown.Europe and North América between them produce enough to feed the entire world. Asia and Latin america produce enough to feed themselves, Africa, however, produced only 50% of its grain needs. If these figures provide by Foster, are right we can say that what produces poverty are the mechanisms imposed by capitalism to secure permanent domination of huge sectors of world population. This indispensable feauture of capitalism, domination, is what constitutes its substance. Through domination capitalism secures the continuation of profit making base don the exploitation of man by man, woman by man, black by White and regionaly South by North.
If we breakdown the figure of the USA food production we find that 13% was consumed by the USA population. 27% was sold commercially overseas, while 20% went to replanting and storing (the latter contributing to pile yet higher the infamous ‘mountains’ of food surplus possessed by both the USA and the EEC). The latter figures add up t 60% of its total food production. The 40% of USA grain left went for cattle feed. Perhaps the latter data also serves to answer the question: why the poor countries are poor?
The problema of economic indicators is another point which affect our view on poverty. The GNP is seen in terms of Money by official staticians, and in the view of some observers the information extracted from these statistics are for the making of war. Monetary activity is the only important factor in both, the GNP concept and modernization. Its monetary aggregation discriminates regionally, ethnically, racially, gender, class, etc., Domestic labour, unpaid labour, does not count in the monetary. Therefore alternative indicators are needed. Indicators in education, housing, environment, etc., would be of help in order to have a complete picture of the problem of poverty. The World Fertility Survey has found a correlation between fertility and certain socio-economic indicators. On the whole, fewer children are born to women with more education, or who live in towns, or who are employed outside the household. In the Third World countries eht WFS found that women´s fertility declines in those countries which were: richest, most urbanized, most industrialized, best educated, and which have the lowes inflant mortality rates.
However, by only looking at the GNPs of some countries we can distinguish very clearly the gap between rich and poor countries. In the last forty years, according to the Anti-Development School of Thought, what we have done is increase poverty in the Third WOrld. The percapita income is as follows: low income countries $580, middle income countries $581-$2,335, and higher income $6,000 or more.
The dominance interdependence and dependence which the debt burden inflicts on the Third World countries are other elements which affect poverty. The core periphery tendency bases its relationship on exports which brings a variety of external factors to enlarge the problema of poverty. In Latin Americca, for instase, are found six countries which owned, jointly 86% of the international debt. High interest rates in the west, crisis in oil prices, etc., made countries become poorer. These circumstances undoubtedly made the debt problema unmanageable and therefore increased poverty.
The policies of the International Monetary Fund, like the cuts in public spending and public expenditure, its so called resheduling, also causes poverty. Its political intervention while protecting interests of the western Banks also contributes to poverty in the Third World. Some observers have asked why is that Latin American countries pay their debts and why not the farmers of the USA?
Power -debt- dependence, undoubtedly, results in a unequal world. The later is, in my view, the equation which answers our question. The mechanisms of power, the unmanageability of the debt burden. the dependence on western products and technology, is in my view, what causes poverty. Malpica affirms that few academics doubt the control imposed by the richest countries on the economies of the poor or underdeveloped countries. Malpica states that if the majority of them remain silent is out of convinience but not because of ignorance. (17) Carlos Malpica, “Los dueños del Perú”, page 17, Peisa, Lima, 1970.
Finally, I would like to quote:
‘Ich will keinen Autor mehr lesen, dem man anmerkt, er wollteein Buch machen, sondern nur jene, deren, Gedanken unversehens ein Buch werden’.
The above quotation from Nietzsche inserted by Mariátegui in his “7 ensayos de interpretación de la realidad peruana”, I think gives us a clearer spiritual insight to the problema. ‘Poverty is not just a matter of abstract thought but of a cruel reality’.
Jorge Aliaga Cacho
University of Glasgow
Faculty of Social Sciences
Scotland, July, 1993