Socio-Historical Analysis of Poverty: Causes and Effects

Introduction

This thesis explores poverty within a socio-historical context – research crucial to furthering discussions of what poverty is, its root causes, its affect on individuals and society, and the civic and moral obligations society has to address it.

President Johnson declared war on poverty five decades ago, yet it remains, and has proven to be one of the most intractable of public policy problems.  Of primary importance in President Johnson’s 1964 State of the Union Address was the charge to U.S. citizens and Congress to prove to the world the success of our system through the elimination, and subsequent prevention, of poverty.

Civics lessons taught to American schoolchildren during the late 1960’s through the 1970’s took this charge to heart, and included such adages as: ‘Everyone had the right to the pursuit of happiness; nothing stood in the way of achieving it except one’s own actions, or lack thereof,’ ‘The American economic system was superior to all others in creating wealth, health, knowledge, equality, and improved lives, in general, for everyone,’ ‘Automation would lead to more leisure time for workers, and their lives would be more enjoyable because of it,’ and, ‘Education was required to be a well-informed citizen; it would lead to a better life.’

As a result of these lessons, the idea that the American Dream was equally obtainable by anyone that sought it because government would ensure that nothing stood in the way is a ubiquitous belief among the population raised during this timeframe.

Nelson Mandela once said, “Poverty is not an accident.  Like slavery and apartheid, it is man-made and can be removed by the actions of human beings.”  This statement, when considered in the face of poverty’s continued existence in the U.S., makes the discussions informed by the research in this thesis necessary for the development and implementation of more effective poverty mitigation, elimination, and prevention policies.  Only by doing so can the U.S. honor the charge put to her by President Johnson in 1964 when he said “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

Poverty’s intractability brings with it questions about its definition and causes, such as ‘what is poverty?’ and ‘is it an inevitable result of poor choices made by individuals or of our society’s governmental, economic, and religious systems?’  Additional questions, such as ‘should the definition of poverty be based on human needs, civic rights, moral obligation, or some combination of all three?’ and ‘how well does the current official poverty threshold measure poverty?’ demand consideration.  Further, answers to questions such as ‘what are the effects of poverty on poor individuals and on society as a whole?’, ‘how is the portrait of poverty changed when the poverty threshold level is changed?’, and ‘what must people earn to fully meet U.S. society’s expectations of them in terms of their participation in our self-sufficiency consumptive economic model?’ deserve study as well.  This thesis explores research that addresses these topics.

Herein, research on human needs as human rights, political philosophies and civic guarantees of human rights, and society’s moral obligations and economic expectations in providing these rights is explored.  Also examined are the effects of poverty in various contexts and how it is treated in various capitalistic economies.  A history of the development and use of the current U.S. poverty threshold is then provided.  Based on this research an amalgamated definition of poverty that reflects its moral, emotional, psychological, civic, and financial facets is constructed.  To support an understanding of this constructed definition of poverty, a comparison between the current poverty threshold, MIT’s “Living Wage,” Basic-Needs Income Levels for Well-Being determined by the Michigan League for Public Policy, and an ‘equality-poverty threshold’ (developed based on this research), is conducted for a one-person household, a three-person household (one adult), and a four-person household (two adults) living in The Village of Shorewood in Milwaukee County, Wisconsin.    This jurisdiction was chosen because school quality is an important criteria in home location choice, and its school district is regularly rated as being among the best in the state of Wisconsin.

Human Needs as Human Rights

One could argue that a universal, standard definition of poverty begins with a notion of unmet needs.  Where considerable disagreement starts is when talk turns to the level of unmet needs that should be measured or the extent to which these needs constitute rights.  This thesis sets out to identify an understanding of the needs of human beings, how those needs form the basis of human rights, and where the bar should be set in terms of beginning to ‘operationalize unmet needs.’  Doing so will assist in a deeper understanding of the proposed definition of poverty developed in this thesis and serve to inform the development of a more comprehensive, and relevant, measure of poverty.

To illuminate what human needs are (and their role in measuring poverty), and why certain of these equate to guaranteed civic rights, it is necessary that an examination of different kinds of rights be conducted.

Rights

According to Brockett (1978: 3), “Western discussions of human rights usually begin with the differentiation between “positive’ rights and “moral” rights.  The former are those specified by existing law; the latter, on the other hand, transcend what is, and are based instead on a sense of what ought to be.  As an approach to human rights, the second claims such moral rights are universal; they are rights which belong to a person simply because one is human.”  Clearly Orshansky (1965: 3) was aware of a growing interest in “moral” rights when she wrote: “A revolution of expectations has taken place in this country (U.S.) as well as abroad.  There is now a conviction that everyone has the right to share in the good things in life.”

Perhaps Orshansky was inspired to write those words after President Johnson’s declaration of war on poverty, when he referenced moral ideas in explaining the cause(s) of poverty by saying in his address “Very often a lack of jobs and money is not the cause of poverty, but the symptom. The cause may lie deeper in our failure to give our fellow citizens a fair chance to develop their own capacities, in a lack of education and training, in a lack of medical care and housing, in a lack of decent communities in which to live and bring up their children.”  There are no federal mandates in the Constitution on what characterizes these ideals, yet it is not unreasonable to think that most would believe President Johnson’s words mean what they would want for themselves or their families.

Or, perhaps Orshanksy was inspired by the United Nation’s “International Bill of Human Rights,” which is comprised of the “Universal Declaration of Human Rights (UDHR),” the “International Covenant on Civil and Political Rights (ICCPR),” and the “International Covenant on Economic, Social, and Cultural Rights (ICESCR),” the latter being introduced to the UN General Assembly for discussion in 1954 and adopted on December 16, 1966.  The ICESCR is a multilateral treaty which commits its parties to work toward the granting of economic, social, and cultural rights (ESCR) to individuals, including labor rights, and rights to health, education, and an adequate standard of living.  The treaty has been in force since January 3, 1976; as of 2013 it has 160 parties.  The United States is one of just seven nations that has signed (the U.S. on October 5, 1977), but not ratified, the covenant, indicating U.S. Executive Branch agreement with the moral principles contained in this UN Bill.

Certain rights granted by the ICESCR are of note in this discussion of poverty and its effects on humans and the society in which they operate; Johnson’s words echo these rights.  The rights granted by the ICESCR reflect the lessons taught a generation; they are moral in tenor.  Among these are the rights to 1) an adequate standard of living, including adequate food, clothing and housing, and the “continuous improvement of living conditions,” 2) the “highest attainable standard” of physical and mental health, and 3) free universal primary education, generally available secondary education, and equally accessible higher education, which should be directed to “the full development of the human personality and the sense of its dignity,” and enable all persons to participate effectively in society (United Nations, 2013).

Measuring the degree to which such rights are being enjoyed by citizens (insufficient enjoyment constituting the suffering of poverty) would be a complex task.  But, according to William Gorham, President of The Urban Institute, “Poverty is a normative measure that must be adjusted to changing social norms and expectations.  This makes the task of devising a balanced means of measuring poverty all the more difficult and, at the same time, all the more important.” (1990: xiii)

If we are to “win” the war on poverty, the poor must become un-poor.  Any result other than the elimination of poverty is immoral, as it reflects a lack of these moral rights being delivered to citizens identified as living in poverty.  As Brockett notes, “some would deny the existence of such universal rights of individuals.”  Positivists, Brockett suggests, would argue that the only rights are those actually protected by positive, or existing, law.  Brockett however, argues along the lines of Orshansky’s point, that “such a position is contrary to contemporary sensitivities and needs.  We need universal principles by which we can establish international codes of behavior, including the treatment of people by their own government.”

Needs

Brockett acknowledges the human rights that the United Nations has declared we all have as human beings, but asserts that neither the simple act of declaration, nor even worldly need, “create the object of our desire” (human rights).  Indeed, Dr. Martin Luther King, Jr. once said “Laws only declare rights. They do not deliver them.”

Brockett’s contention is that there is a standard from which a “valid and useful understanding of human rights can be derived,” that “there are basic needs intrinsic to all people and that these needs are hierarchically ordered,” that these needs are the source of human rights, that they can be logically ordered in a meaningful hierarchy, and that which allows the determination of human rights, what they are, and the establishment of priorities among those rights.  Further, Brockett contends that a “basic needs approach” provides both a useful understanding of human rights, and possesses greater validity.

If the reader accepts that each individual is of equal moral worth, then, Brockett asserts, this attitude is similar to Maslow’s description of “Taoistic science;” that is, to love one in such a way as to allow the individual to mature into his/her unique potential (and to expect the same of others for you).  Again, this attitude can be found in President Johnson’s 1964 State of the Union address when he said “The cause (of poverty) may lie deeper in our failure to give our fellow citizens a fair chance to develop their own capacities.”  And, if everyone has equal moral worth, then they have equal claim to the opportunity to meet one’s basic (or innate) needs in pursuit of the realization of one’s potential.  Or, as the U.S.’s Declaration of Independence puts it, “the pursuit of happiness.”

The healthy development of humans requires that innate needs be gratified, lest their deprivation result in inhibited development or sickness.  Maslow is said to have asserted that all clinical evidence shows that these basic needs cannot be frustrated without sickness eventually resulting from the deprivation.  Maslow also found that if presented with a choice, the human organism would chose to satisfy its need(s) rather than suffer deprivation.  People simply will not choose deprivation when they understand that they have a real choice, unless their decision-making faculties have been compromised.

Maslow’s findings have been confirmed by past research on the effects of deprivation, including a University of Minnesota study conducted during WWII on the effects of starvation and the best methods for feeding nearly starved people.  In this study, as the subjects continued to be deprived of food, their focus became concentrated nearly solely on food.  In effect, the human mind becomes hijacked by deprivation, in this case, through a focus on food.  For example, the subjects in this study would continually hoard cookbooks, compare prices of food between ads, notice only food related scenes in movies, and dream of opening restaurants once the study was complete.  More recent studies have shown that the mind’s preoccupation with a certain condition can occur at much less extreme levels of deprivation than originally understood from the University of Minnesota study, and for scarcity of all kinds – sleep, security, time, money, etc (Mullainathan and Shafir, 2013).

As bad as it is to be stuck in poverty-induced deprivation for long periods of time, the effects are worse on the children of the long-term poor.  Many of these children are found to suffer pervasive negative physical and psychological health aftereffects in adulthood (Kim, et al, 2013).  These aftereffect conditions include reduced prefrontal cortex activity and a failure to suppress amygdala activation during attempts to regulate negative emotions.  The amygdala and prefrontal cortex play critical roles in regulating stress and emotion.

Simply put, the experience of poverty reduces the ability of adults to manage their lives well (i.e. in accordance with societal expectations), including the rearing of children.  The children of these adults are likely to face developmental challenges that negatively influence their adulthood (Badger, Oct. 2013).  This includes their ability to routinely express socially expected and acceptable behavior, including the ability to manage their own lives in a manner that will enable them to lift themselves out of poverty (Badger, Aug. 2013).  These studies seem to support Stauffer’s conclusion that malnutrition beyond a certain point leads to apathy and hostility, which combine to lessen the likelihood that the individual will have the desire or energy required to create living conditions that provide for further physiological need(s) gratification.  In children, a serious lack of protein in their early years cripples their brain development, which diminishes their potential for need gratification.  In short, poverty (or the ‘scarcity’ caused by it) causes a lack of the desire and energy necessary to compel its sufferers to successfully gratify their most basic of human needs.  And yet, their not doing so is seen not as a result of suffering poverty, but as a result of their poor decision-making, which in turn is socially unacceptable, resulting in the blame for their poverty being placed at their feet.

Needs as Rights

What’s clear is that during the time the poverty thresholds were being developed in the U.S., the leaders of many western societies and the international organizations they participate in, had, by and large, arrived at a new understanding of the human condition.

As has been true throughout history, additions to the body of knowledge accumulated and articulated by humanity have brought change to society.  In the mid-1960’s, this resulted in a growing sense among the capitalistic countries that promotion of the public good meant that all citizens had a right to well-being, not just survival.  In the U.S., this was clearly evidenced by President Johnson’s charge to eradicate poverty as proof of the superiority of the U.S.’ capitalistic system.  Beyond U.S. borders, it was seen in the development of the United Nation’s International Bill of Human Rights.

Brockett uses Maslow’s hierarchy of human needs as a foundation for his conceptualization of human rights.  As he notes of Maslow’s hierarchy, the individual’s motivation is driven by the lowest unsatisfied need.  Maslow is said to have determined that in situations of sufficient continual deprivation, the unsatisfied need becomes an almost exclusive organizer of behavior, recruiting all the capacities of the organism to its service.  As noted previously, Mullainathan and Shafir find that the cost of the unmet need is an “undue focus on the necessity at hand (the unmet need), which leads to a lack of curiosity about wider issues (the higher-order human needs), and an inability to imagine longer-term consequences.” (Adams, 2013)

Continual gratification of a need, Maslow continues, can release the individual from the motivational force of that need.  As a need is regularly and securely satisfied, the next need emerges, and so on.   Mullainathan and Shafir find this same force to be true in all instances of satisfaction of lack, and label this “excess” need satisfaction as “slack or abundance.”  That is, there is reduction in or elimination of the tension previously experienced due to a lack, thus making room to turn one’s attention to other things, or as Maslow would call them, higher-order needs.  Similar reactions to having an unmet need fulfilled were noted in a study of poor farmers before and after harvest by Mani, Mullainathan, Shafir, and Zhao (Mani et al, 2013).  This study found that living continuously in poverty imposed a mental burden, or “bandwidth tax,” similar to losing 13 IQ points, or the equivalent of functioning perpetually without a nights’ sleep (Thompson, 2013).

As noted by Badger (2013), these studies conclude that poverty “imposes such a massive cognitive load on the poor that they have little bandwidth (Mullainathan and Shafir) left over to do many of the things that might lift them out of poverty – like go to night school, or search for a new job, or even remember to pay bills on time.”

It turns out money management skills are particularly affected by the “loss of bandwidth” created by the lack of, and concentration on, money (poverty).  Poor people are, unsurprisingly, continually focused on money.  They become quite good at understanding immediate value and cost, but in so doing they lose the ability to exercise good long-range judgment, are often unable to make rational decisions, and experience less resistance to self-destructive temptation.

Above the physiological need in Maslow’s hierarchy is security.  Security ultimately requires that the body be protected from harm, and the mind protected from too much disorientation; there must be a sense of security that the need can continue to be met before the individual will begin to work on fulfilling the next need in the hierarchy.

It is important to note that higher-order needs are not felt only after complete satisfaction of the lower-order needs.  Rather, as Brockett explains, once a need is “fairly well gratified,” the individual will gradually begin to become aware of, and be motivated to satisfy, the next need in the hierarchy.  In the U.S., since security of future gratification is necessary for adequate fulfillment of each of the basic needs, sufficient economic security becomes a need that must be met for further growth.

Once the physiological and safety needs are fairly well satisfied, the individual will begin to feel needs to belong, to be loved, to have self esteem; to be equal.  In a society based on consumerism, such as the U.S., this will entail the need to equally participate in that consumerism; in fact, feelings of self-esteem and belonging will be dependant upon that equal participation.  Deprivation of these higher needs, as Maslow notes, “is the most commonly found cause in cases of maladjustment and more sever pathology (in developed countries).”

That the human need for equality includes the desire for equal opportunity to develop one’s talents and to receive social recognition of one’s inherent equal worth is thus no surprise.  It is generally agreed in developed nations that the individual has a right to be free from significant prejudice and discrimination, especially in those activities deemed ‘important’ by society.  These activities include employment, education, political participation, and the freedoms of speech, assembly, and religion.  In the U.S., laws promising citizens protection from prejudice and discrimination are universally known and celebrated; enjoyment of these protections of equality is an essential part of being an American.  As a highly consumptive economy, it is reasonable to conclude that economic activity should be deemed important enough by U.S. society to be free from prejudice and discrimination.  Doing so would suggest that the capability of equal participation in economic activity should be a right, the denial of which would result in causing citizens to experience a lack (poverty) of equality.  The government must take steps to ensure this right is equally exercisable by its citizens.

Political Philosophy and Civic Guarantees of Human Rights

The framers of the Declaration of Independence and U.S. Constitution established the societal custom and moral obligation (in other words, human rights) to which the U.S. government would be bound to guarantee to its citizens.

The Constitution of the United States cites as a foundational reason for its adoption the promotion of the general welfare, and grants to its citizens the right to vote, the right to peaceably assemble (protest), the right to keep and bear arms (self and national defense), the right to life (those things necessary to promote, protect, and sustain life such as food, water, air, clothing, shelter, and healthcare), liberty (freedom from oppression and prevention of one’s securing their needs), and the pursuit of happiness (a state of being unique to each individual that is above and beyond that necessary to sustain life, and can be expected to change as levels of need are satisfied; to strive for self-actualization), and the right to petition the Government for a redress of grievances (to fight government destruction of citizens’ human and legal rights as proclaimed in the Declaration of Independence and incorporated in the Constitution).

According to Locke (Stanford University), government exists by way of social contract executed through the consent of the people by transfer of some of their rights to the government.  In exchange, the government is expected to better ensure the stable, comfortable enjoyment of the people’s lives through the protection of their rights and the promotion of the public good.  Governments that fail to provide these things are, according to Locke, rightfully subject to resistance or replacement.  We see Locke’s influence on U.S. governance in the opening paragraphs of the Declaration of Independence, which recite mankind’s rights to resistance and replacement of the government.

Patricia Ruggles (1990: xv) notes that “…Adam Smith put it more than 200 years ago, poverty is a lack of those necessities that ‘the custom of the country renders it indecent for creditable people, even the lowest order, to be without.’”

It is my assertion that the rights called out in the Declaration of Independence are human needs, up to and including the need to be self-actualized, as defined by Maslow.  No better support of this assertion exists than the very words of which I speak; the second paragraph of the Declaration of Independence.  The beliefs captured in these powerful words are promulgation of human needs as moral rights, and of the risks incurred by a society that does not ensure those rights are delivered to its citizens.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security. –Such has been the patient sufferance of these colonies; and such is now the necessity which constrains them to alter their former systems of government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over these states. To prove this, let facts be submitted to a candid world.

The second paragraph forcefully declares that the rights and actions it enumerates are truths.  It describes these truths as being openly and notoriously known to all individuals, everywhere.  It conveys equality upon those individuals.  And, it calls out specifically the right to the pursuit of happiness, as defined by each individual, as being among the irrevocable moral rights possessed by every person.  It also states unequivocally that it is government that is to justly secure these universally true, irrevocable moral rights for the equal citizens, with whose consent the government is formed to conduct said actions.

The paragraph continues by indicating that if the government is destructing the securitization of the rights it guaranteed to its citizens, those citizens have the right to change the government to one that seems most likely to provide for their security and wellbeing.

The framers continue in the second paragraph by noting that while governments should not be changed for insignificant reasons, history shows that humanity will tend to allow grievances against them to continue while they are bearable rather than alleviating their suffering soon after it has begun.  But, that, when those grievances become insufferable, it is not only the right but the duty of the citizens to change or remove the oppressive government and replace it with one that provides for their future wellbeing.  So important is the securing and providing of these rights by government that morality obligates citizens to amend or overthrow a government that fails to succeed in this regard.

The notion of equality among citizens was significant.  President Lincoln, in 1854 wrote: “Most governments have been based, practically, on the denial of the equal rights of men, as I have, in part, stated them; ours (The U.S.) began by affirming those (equal) rights. They (other governments) said, some men are too ignorant and vicious to share in government. Possibly so, said we; and, by your system, you would always keep them ignorant and vicious. We proposed to give all a chance; and we expected the weak to grow stronger, the ignorant wiser, and all better and happier together.” (Civil War Trust)

The idea that government was obligated to provide for and protect the wellbeing of its citizens continued to be accepted seventy-eight years after the Declaration of Independence was signed, as evidenced by President Abraham Lincoln, who wrote that, “the object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities.”  Congressman John Yarmuth (D, KY) in 2014, 238 years after the signing of the Declaration of Independence, writes that these words mean that government is how society organizes our responsibilities to one another, and that government has a vital role to play in reducing poverty – that is, to do for the people what they cannot so well do for themselves. (Yarmuth, 2014)

If a government’s effectiveness in promoting and protecting the general welfare of society diminishes to the point it is rejected by the people who’ve previously submitted themselves to it, the symptoms of that ineffectiveness are likely to determine what type of government, if any, it is replaced with.  If conditions are right, anarchy (as used here, lawless society) is risked.

The growing state of income and wealth inequality in the U.S. is garnering increasing attention from the media and the citizenry.  Concern is growing about the influence that its wealthiest citizens have upon the U.S. government and its policies.

Also of concern to some are the actions of governmental bodies.  The recent reduction of unemployment benefits and food stamps (Britt) and the recent Supreme Court ruling in Citizens United v. Federal Elections Commission (Kennedy) are seen by many as just the latest examples of destructive acts against the rights of U.S. citizens and the U.S. economy by their government.  These particular actions negatively affect the ability of some citizens to exercise their rights to life and pursuit of happiness – directly, by reducing access to funds to pay for sustenance, and indirectly, by providing a method by which the few can, and do, influence the future course of government to the benefit of those few, often at the expense of the many.  Through these and other actions, those most in need are prevented from meeting society’s economic expectations of them, and influence upon government becomes concentrated further in the hands of a few.  By allowing, or causing, these actions, the government (society) is not meeting its moral obligations to all of its citizens equally.

Over the past five years, the ever-increasingly hostile political environment has produced record-breaking levels of inaction by the legislative branch of the federal government (Pew Research).  The government is barely acting, and when it is acting, it is acting against the best interests (not delivering the guaranteed rights) to many of the very citizens who’ve granted it power.

Differences of perspective exist on whether this political hostility is a result of, or the cause of, the growing hostility in society.  Large differences exist among segments of society on a host of social topics, from women’s reproductive rights, definitions of marriage and who may (and may not) enjoy marriage rights, the role that religion ought (or ought not) to play in civic life, etc.  These are precisely the kinds of conditions and conflicts that are to be expected, according to Hobbes, when there is no (properly working) government.

Without benefit of government (anarchy), Hobbes theorizes that “a state of nature potentially fraught with divisive struggle will ensue. The (just) right of each (equal people) to all things invites serious conflict (without government), especially if there is competition for resources, as there will surely be over at least scarce goods such as the most desirable lands, spouses, etc.  In anarchy, people will quite naturally fear that others may (citing the right of nature) invade them, and may rationally plan to strike first as an anticipatory defense.  Moreover, that minority of prideful or “vain-glorious” persons who take pleasure in exercising power over others will naturally elicit preemptive defensive responses from others.  Conflict will be further fueled by disagreement in religious views, in moral judgments, and over matters as mundane as what goods one actually needs, and what respect one properly merits. Hobbes imagines a state of nature in which each person is free to decide for herself what she needs, what she’s owed, what’s respectful, right, pious, prudent, and also free to decide all of these questions for the behavior of everyone else as well, and to act on her judgments as she thinks best, enforcing her views where she can. In this situation where there is no common authority to resolve these many and serious disputes, we can easily imagine with Hobbes that the state of nature (without government) would become a ‘state of war’, even worse, a war of ‘all against all.’”  (Stanford)

The lessons of history understood by the founders of the U.S. government, and the political ideas that influenced their thinking are captured in the founding civic documents of the U.S.  These lessons also indicate that expanding inequality in wealth and income, and the worsening living conditions for increasing numbers of people, will pose growing risks to the security of the government, and to the wellbeing of the people.

“Here in the Congress you can demonstrate effective legislative leadership by discharging the public business with clarity and dispatch, voting each important proposal up, or voting it down, but at least bringing it to a fair and a final vote.”

President Lyndon Johnson

Society’s Economic Expectations and Moral Obligations

The U.S. is considered the most liberal (generally, the least government ‘control’ over economic activities – especially the actions of business and financial organizations) of the capitalistic societies on Earth (Streeck, 2010).  As such, the health of the economy is paramount to U.S. strength and stability.  A consumption-based ‘growth’ economy such as the one operated in the U.S. has historically required the full and robust participation by all its citizens.  Economists heretofore have generally adhered to models that suggest continuous growth is both possible and desirable (Schor, 2014).  Thus, when many of a nations’ citizens are unable to participate at the levels required to drive the continual growth necessary in a healthy consumptive capitalistic economy, the internal stability and international strength of the nation is threatened.

Citizen participation in the economy is considered so critical to the country’s wellbeing that President George Bush encouraged citizens to maintain their confidence and continue their participation in the economy after the terrorist attacks of September 11, 2001.  Full and robust participation in the economy is such an ubiquitous expectation that the vast majority of people do not stop to consider how pervasive the call to participate has become.  Advertisements offering products and services inundate our senses at every turn.  These ads are found on television, websites, in trains and busses, on the radio, on billboards, in magazines, on bus stops, etc.  Even the content of television shows and movies, with their elegant sets and portraits of comfortable, luxurious lifestyles, have the potential to promote consumption and desire for material wealth more than to entertain.

None of the delivery methods for this continual promotion of the consumptive lifestyle are prevented from being seen by those who lack the means to fully participate in it.  The encouragement to more robustly participate in society (the economy) is offered equally to all.  As such, the ability to more robustly participate in society (the economy) should be more equally available as well.

This position is based upon the principle that the civic rights granted U.S. citizens (who are equals) are founded upon universal law, and thusly, it is the moral obligation of U.S. society (government) to ensure these rights are delivered to, and enjoyed by, the citizenry in its entirety.  These rights include the right to the pursuit of happiness, which in the U.S. requires participation (at a level to be determined by each individual, and with society’s encouragement to do so robustly) in a consumption-based economy.  It is worthwhile to consider whether this societal encouragement to fully and robustly participate in the consumptive economy constitutes society’s obligation to ensure said participation.

There is disagreement about whether rights are just those that require that no one interfere with their exercise (negative rights), or whether they include those that require action by others to secure (positive rights).  Positive rights are also viewed as being substantive rights, which gives rise to the question of capability.  Brock notes that Clause points out that “economic development is a necessary…condition for a comprehensive system of positive rights.”  Brockett identifies Cranston and Nardin as critics of economic development being a right.  Cranston argues that “if it is impossible for a thing to be done, it is abused to claim it as a right.”  Nardin is more succinct; “ideals are not rights.”

Brockett questions this assertion, reasoning that civil and political (negative) rights often require positive government action beyond the passage of laws to be protected.  He goes on to assert that the flawed distinction between negative and positive rights is even more apparent when economic development is conceptualized as being the individual’s right to fulfill rather than society’s obligation to provide.  He suggests that it is easy to see that in the United States the presence of hungry people is not the result of insufficient economic development but, rather, a consequence of it’s social organization.  This is the case, he asserts, because the only other possible interpretation would be individual choice, which, of course, is a contradiction of the motivational theory of behavior underlying his conceptualization of human rights.  People are motivated to feed themselves.  The U.S. recognizes the inherent right to life, and specifically grants its citizens this right.  Thus it can be reasoned that U.S. citizens would not choose to be hungry, or, by extension, poor, if alternatives to that existence were legitimately available to them.

As hungry and poor citizens exist among us, it suggests that alternatives to hunger and/or poverty are not available due to the structure of our society.  This was certainly the case in the 1960’s when Orshansky developed her poverty thresholds, the need for which would not have existed had there been no poor.

Continuing with his work to describe the development of human rights, Brockett says:

This is not to say that economic capability (of the individual) is irrelevant.  Obviously it is not.  The point needs to be made very clearly, however, that human rights refer to the rights of individuals and not to what society can or wants to deliver to the individual.  When it is said that the society has insufficient economic capability, what is really being said is that the society is not presently organized and/or performing in a way to allow fulfillment of rights.  This is not, however, a statement about the capacity to do so under other forms of organization or performance.  It most certainly is not a statement about the existence of human rights.  The existence of human rights is independent from the form of social organization. The fulfillment of rights, on the other hand, is obviously conditioned by the social context.

Another facet of the argument against positive rights is one made, again, by Cranston, who asserts that all rights entail duties.  Cranston takes the position that the universal right to life imposes a duty upon everyone in society to respect and refrain from endangering life.  His position against economic and social (positive) rights is predicated upon his view that these end up being rights for people to be given things.  He ponders “who is to do the giving?”

Brockett asserts that Cranston’s view is in error, and that the issue largely disappears when human rights are viewed as the right to fulfillment of innate needs.  Specifically, Brockett argues that individuals, not society, should be able to fulfill their needs. Much like with food, the basic right is not to be given food, but the right to satisfy physiological need.  Everyone is responsible for ensuring basic rights can be exercised.  Conversely, if individuals cannot satisfy the need, then it must be concluded that society itself is frustrating the exercise of the right.  If that is so, Brockett continues, then it is society’s duty to provide for its satisfaction, in one way or another.

This line of thinking maintains the individual mandate to provide for oneself that is held so dear in the U.S.  Furthering the case, Brocket argues:

In the same fashion, the safety needs create the right of the individual to safety and not directly a right to protection.  The corresponding duty again belongs to everyone.  If everyone properly discharged ones’ duties, there would be no need for protection.  Since this is not the case, institutions are created, such as police departments, and given the duty to provide protection of the safety rights.

Thus, what to some is a negative right, by necessity, becomes a positive right.  Brock continues:

Even in a country as wealthy as the United States, though, the protection is incomplete.  Clearly economic capability is a relevant factor.  It is relevant to the ability to perform the duty, however, and not the existence of the right.  The inability for economic reasons to provide protection means a duty has not been sufficiently discharged, either because of a lack of sufficient funds, or insufficient funds being allocated to the provision of the protection of the right.  It does not diminish or negate the existence of a right to safety.  Similar principles hold with the higher rights.

One of the measures of how well our economy is serving the needs of our society is the number of people living in poverty.  In capitalistic societies, especially the United States, the success with which people obtain access to food, clothing, shelter, and other goods and services required to fully participate in society is predicated upon how they interact with the labor market.   In these societies, there is an underlying belief that the economic and political policies and systems allow for universal self-sufficiency, dependent primarily on the effort and initiative exhibited by the individual.  However, this belief has been shown to be inaccurate.  The American Dream (the consumptive lifestyle which provides for fulfillment of one’s needs) is promoted to all citizens equally.  Individuals have the right to pursue the fulfillment of their needs as they see fit, and society (government) has the obligation to ensure all citizens, equally, are not prevented from the exercise of these rights.

So as needs beget rights, unmet needs reflect rights not provided.  Human physiological needs dictate that individuals would meet their needs and behave as equals in society if they had that choice.  If all citizens are not behaving as equals in society (education, consumption, etc.) it is evidence, based on Maslow’s hierarchy of needs, of their prevention from doing so, not from their intention to avoid doing so.

Poverty in Different Capitalistic Models

With evidence that suggests the U.S. is mishandling the issue of poverty and depriving certain of its citizens guaranteed fundamental rights in the process, it is instructional to examine other capitalistic nations to determine whether any of them more effectively mitigate poverty than the U.S.

The comparative study of capitalism increased after the breakdown of Soviet Communism in 1989.  By the early 1990s this led to frequent comparisons between competing national models of capitalism.  Among these were distinctions made between the market-liberal capitalisms of the Anglo-American world and the more relationally-based capitalisms of Europe.  Examples of these distinctions are the claim of the equal “competitiveness” of non-standard capitalisms, the opportunity of nations’ to chose more humane alternatives to Anglo-American capitalism, and a more or less normative bias towards “embedding” some sort of social-democratic or welfare-state in the capitalist economies common in European countries (Streeck, 2010).

Martin Schroder examined different capitalist regimes with an eye towards identifying why the same countries end up grouped in similar ways in research on varieties of capitalism, which analyzes why, in “liberal market economies, firms rely more heavily on market relations,” and research on welfare states, which analyzes to what degree “a person can maintain a livelihood without reliance on the market.”  He finds that these typologies are opposite sides of the same coin – either societies’ allow the market to govern production and distribution, or neither. (Schroder 2013).

Schroder notes that critics of his combined typology argue that coordinated market economies (Scandinavia and continental Europe) have liberalized to the point that they are now similar to liberal market economies.  Opponents go on to note that solidarity, historically high in coordinated economies, has declined in most countries, and that, looked at in this way it makes little sense to differentiate between liberal and coordinated market economies (Streeck 2009).  Proponents, however, argue that distinctions between capitalisms still make sense because employers in coordinated markets still coordinate (Hall and Thelen 2009).

In the early 1990s, French author Michel Albert is said to have “forcefully articulated” European fear that the “less-deserving, socially destructive capitalism” of the Anglo-American world was about to prevail over its “better” alternative.  Albert’s 1991 Capitalism against Capitalism divided the [capitalistic] world into two camps; the Rhineland (led by Germany and Japan), and Anglo-America (with France sitting on the fence).  According to Streeck (2010), Albert arrives at the “melancholy conclusion that the greater dynamism and cultural attraction of American-style neoliberal adventure capitalism was about to crowd out the more solidaristic, and ultimately more efficient capitalism of the combined Rhinelands.”

Where Albert saw two camps of capitalism, Schroder sees three.  Schroder cites Svallfors’ (2010) claim that it is well established that ‘support for equality, redistribution, and state intervention is strongest in the social democratic regime (Scandinavian countries), weaker in the conservative regime (continental European countries and Japan), and weakest in the liberal regime’ (Anglo-American countries).”   Schroder continues: “concretely, there is reason to believe that different religions led to different policy styles, which in turn influenced how the welfare and production system[s] of countries developed.   Just as Max Weber (1965 [1905]) argued that capitalism itself resulted – filtered through a number of factors – from the Protestant ethic, scholars mention that (with the exception of Japan) three variants of Christianity led to three varieties of capitalism and welfare states.  Scattered over the literature, one can find claims that:

1. A Calvinist ethic, prevalent in Anglo-American countries, promotes a culture of individualist striving on markets.  It thereby not only supports a liberal welfare state (i.e. minimal, ‘pull-yourself-up’), but also a liberal production system.
2. Catholicism, prevalent in continental Europe, separates society into different groups.  This not only promotes a conservative welfare state (keeping everyone within his social group); it also promotes a production system in which coordination stops at group-cleavages, leading to sector-based, or industry-based, coordination.  Historically protected industries retain many of these social protections but newer industries suffer with similar types of social protections as found in liberal states.
3. Lutheranism, prevalent in the Scandinavian countries, promotes nationwide solidarity, which not only promotes a social democratic welfare state, but also a nationally coordinated economy.”  Social protections have changed, but ultimately everyone is still protected.

In the lead-up to the Great Recession, from the early 1990s to the mid 2000s, Streeck writes that there were suspicions that the U.S. was using its growing international power (after the fall of its historical opposition – Soviet Communism) to bend the rules of global capitalist competition in favor of its own “low-road” regime, so as to spare itself the effort to reform in the direction of a capitalism with a more human face.  Often cited as evidence of this is the “so-called Structural Impediments Initiative launched in 1989” by the George H. W. Bush administration aimed at forcing Japan’s government to free up markets – including capital markets – based on the American model.

The Clinton administration, after retreating from its original pretense at social reform as a strategy of economic revitalization, continued this initiative.  What followed was the “astonishing success” of this less demanding policy of “deregulation that was chosen instead” of social reform, resulting in more than a decade of unprecedented, and, as we know now, artificial, prosperity.  Now, the Great Recession “…has also brought back the memory, still vivid until only a few decades ago, of the self-destructive potential of capitalism – a topic that was at the center of traditional theories, from Marx to Schumpeter…” (Streeck, 2010).

As Albert feared, Anglo-American capitalism did (as Schroder finds), to some extent, “prevail” over its “better” alternative as liberalization did take place in almost all capitalistic countries since 1980.  But he suggests that if solidarity and coordination are kept analytically separate, three varieties of liberalization can be identified in which solidarity and coordination play different roles (Schroder 2013).  This leads Schroder to conclude that the three varieties of capitalism remain intact, albeit in more liberalized forms.  This results in three different methods of ‘combating’ poverty.

First, in Anglo-American countries, liberalization meant direct frontal attacks on institutions supporting collective regulation of labor relations (unions), resulting in full-blown deregulation and the replacement of non-market institutions with market institutions.  Especially in the U.S., the combination of Calvinist cultural influences and market liberalization has resulted in continued use of antiquated poverty measurement methodologies, reduced poverty subsidies such as unemployment compensation and food assistance, and direct attacks on the character of citizens experiencing poverty.

Second, liberalization in conservatively coordinated countries (continental Europe) was not through attacks on collective regulations but through neglect of them.  As the protected industries shrank as a percentage of jobs/employees protected, unprotected jobs/employees increased in number in the growing sector of service jobs typical of all capitalistic economies, resulting in less influence of coordination efforts on the overall economy.  Here, essentially, the employees in industries benefitting from strong collective regulations have retained those protections, but the percentage of the workforce comprised of these workers has declined as employment in unprotected service sector jobs has risen.

Third, liberalization in social democratically coordinated countries changed from providing complete protection of citizens from market forces to facilitating their successful reintegration into it when necessary.  This was done through the provision of a sufficiently high minimum wage and training of individuals to allow them to take jobs that came available when they’d been displaced from fields with declining employment availability.  These countries relaxed coordination but retained egalitarianism (Schroder 2013).  The Scandinavian countries liberalized, but only to the extent that unemployed persons were provided training to obtain jobs that were available rather than be paid to be unemployed because their jobs had been eliminated.  The use of a high minimum wage helps make this tactic possible, because income is less variable depending on job-type, allowing people to take available jobs without suffering significant losses of income.

Says Schroder: “systematic similarities and differences between countries influence welfare (poverty mitigation) and production systems.  While the stable historical roots of these welfare/production combinations lead us to suppose that liberalism will endure in Anglo-American countries, social solidarity in Scandinavia, and conservative social stability in continental Europe, these historical roots are no guarantee that the association of liberal capitalism with liberal welfare states, as well as conservative and social democratic welfare states with economic coordination [of various types] will persist.”

We can see, then, that the Scandinavian capitalistic model, despite its liberalization since 1980, continues to provide more effective poverty mitigation than either the conservative continental European or the liberal American capitalistic models.  The American model, particularly, with its strong “individual responsibility for self-sufficiency,” does not prevent the suffering of poverty by certain of its citizens, in direct opposition to the societal expectations, moral obligations, and civic guarantees as explored in this thesis.  In short, it is possible to better mitigate the occurrence of poverty than is currently experienced in the U.S.

A review of how the current poverty threshold came to be, how it is (still) calculated, and previously proposed alternative measures will inform the analysis for and evaluation of a better poverty threshold, as this thesis proposes to provide.