An Essay into the Nature and Causes of Poverty — Part 1

Economics

In the following, I explore a few fundamental ideas relating to the core subject matter of economics. One can precisely date the founding of the discipline with the publication in 1776 of Adam Smith’s seminal work titled An Inquiry into the Nature and Causes of the Wealth of Nations.

Note that the focus was on the wealth of nations, and not  the poverty of nations. Poverty is the default condition of all peoples in all times; it is the nature and causes of the wealth of nations that require explaining.

Economics is a branch of social science. Social science is devoted to the study of human societies and human interactions. Today economics is a vast field with dozens of specialized areas of inquiry. But the discipline was started by, would you believe, philosophers. What we call classical economists today — Adam Smith, David Hume, John Stuart Mill, et al — were philosophers. Smith’s first book Theory of Moral Sentiments (1759) laid the ethical and moral foundations for his later book on the wealth of nations.

Humans

Anatomically modern humans have been around for at least 200 thousand years, and perhaps as long as 300 thousand years. That’s fantastically large compared to our average human lifespan. Assuming that human lifespan was below 30 for most of that period, the number of generations of humans that lived and died during the past 300 thousand years could be as large as 10,000. A reasonable estimate of how many humans have ever existed is 100 billion. At present, the world population is close to 8 billion. Therefore we can confidently say that 92 percent of all humans that ever lived have died.

And what were the lives of the people who lived before us like? You can be certain about this: compared to our lives, their lives were what we would call grinding, desperate poverty. We borrow Thomas Hobbes’ description of the human condition from his book Leviathan published in 1651 which declared it to be “… no knowledge of the face of the earth, no account of time, no arts, no letters, no society, and which is worst of all, continual fear and danger of violent death, and the life of man, solitary, poor, nasty, brutish, and short.”

Hobbes Ruled

Remember that for most of human existence, according to anthropologists who study such matters, people lived in small hunter-gatherer groups of about 150 individuals. Unlike us, they did not live in physical or virtual contact with thousands of individuals. Prior to the agricultural revolution, people lived in small, roving bands.

How long ago was the agricultural revolution? Around 10,000 years at most. By our metric of generations, 10,000 years means around only 300 generations — which translates into a measly 3 percent of human existence. Therefore 97 percent of all humans lived in small groups. To a first approximation (a favorite phrase of us economists) all humans have lived in small groups. Compared to us, all our ancestors lived in what we would consider something akin to solitary confinement.

All our ancestors were desperately poor, compared to us. They of course did not know that. It was normal and that’s what they expected. They did not have anything to compare their lives to. They couldn’t imagine otherwise. Their lives were monotonous. Food, water, shelter and clothing were scarce and uncertain. The elements were hard on them. Disease and an early death was the only guarantee. Infant mortality was high. Women suffered and died at childbirth. Relentless drudgery without relief. Life was not pretty and death was the only escape, a relief from the near constant suffering.

What we consider normal today is fundamentally different from what was normal for, to a first approximation, all humans who ever lived.

The Modern World

But we live in the modern world. We will not define what we mean by the modern world because “we knows what it is because we lives in it.” We only note that the modern world is quite recent. If one dates the start of the modern world to around the year 1750, that’s only about 250 years ago. That translates into at most 10 human generations, or about one percent of the total number of generations of humans. Again, as a first approximation, you could say that all of human history occurred in the pre-modern past that stretches at least 200 thousand years.

Let’s ponder that for a bit. You, dear reader, like me have had 10,000 generations of anatomically-modern human ancestors. Your parents are the most recent of your ancestors. Your grandparents are one generation removed from you. Your 10th great-grandparent lived around the time the modern world began. All of the 9,990 generations of your human ancestors lived in the ancient world. We are the exceptions, not the normal.

I See Dead People

Here’s an interesting thought experiment. Think of all the people you know who are above 30 years old, including yourself if that’s the case. All of them would be dead if they had lived in the pre-modern world. Our lives are much richer than lives of people who lived in the past by this simple metric alone — we get to live with our kith and kin for much longer now. Our lives overlap with the lives of our parents for 40 years instead of four.

We have come a long way in the short time of 250 years (relative to the past 300 thousand years or even 10 thousand years). Life expectancy at birth used to be less than 30 years; now it is above 70 years for the vast majority of people across the world. Every measure of human flourishing — child mortality, morbidity, health, education, housing, entertainment, travel, comfort — have improved at an accelerating pace in just the recent past. Not just that, standards of civility and morality have improved beyond anything that anyone would have imagined just a few centuries ago.

To cut a very long story short, let’s just say that life for all (to a first approximation) of human existence has been inescapable horror.It’s never been a picnic in the park. Even in our most trying personal circumstances we should remember to be thankful that we were born in the modern world, and not the ancient world.

Recognizing that life is vastly and immeasurably better than it used to be even in the relatively recent past is not to say that life is heavenly now. For sure, things can be better. Indeed we have come to expect advances in the material condition of humans. But those advances are neither certain nor are they inevitable. Why is that so?

The Questions

There are important questions that we need to investigate. What exactly is the cause of material poverty? Who is a poor person actually? What is the way out of poverty? What are the necessary conditions for poverty? What are the sufficient conditions for poverty? Why was poverty so prevalent in the past and not so in the present? Will there come a time when there will be no material poverty in the world? Will there be a time when there will be no poor people in the world? Poverty and poor are related but not the same concept.

Those questions are important. They are, to some people like yours truly, the most important questions. Robert Lucas Jr, Nobel laureate pondered India’s lack of economic prosperity and asked,

“Is there some action a government of India could take that would lead the Indian economy to grow . . . ? If so, what exactly? If not, what is it about the “nature of India” that makes it so? The consequences for human welfare involved in questions like these are simply staggering: once one starts to think about them, it is hard to think about anything else.”

What is the role of the government in the matter of eradicating poverty? Is the government even necessary in this? Is the government — however conceived — even capable of that? Or is the government somehow implicated in causing poverty? If not the government, then who or what is the cause of poverty? Which came first — the government or poverty? What are the salient factors that differentiates a Somalia from Sweden, a Soweto from Oslo? Why did the Industrial Revolution happen in England and not in Bengal?

The necessary first step in addressing those and other related questions is defining what it means to be poor, and how one gets to be non-poor. That’s up next. What is poverty, and who is a poor person? This is not going to be easy but with a little bit of attention, it is not really hard.

As I say, it’s all karma, neh?

{Go to Part 2 of this series.}