Tag Archives: poverty

Not bowling alone

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The UK economy is growing at a decent clip now, but the consequences of the long downturn linger on. The distinguishing feature of the post-2008 economic landscape in most western economies is how long growth has been so weak, how long it has taken for GDP to regain its previous peak. The final chapter of [amazon_link id=”0300203772″ target=”_blank” ]Hard Times: The Divisive Toll of the Economic Slump[/amazon_link] by Tom Clark with Anthony Heath describes the book’s suggestions for tackling the consequences of lengthy economic weakness as “wearyingly familiar.” That doesn’t make it any the less important to be reminded by this book of the social impact of the seven lean years since the Great Financial Crisis. Too often, discussions about the economic issues and the social issues proceed separately, but they are tightly linked.

[amazon_image id=”0300203772″ link=”true” target=”_blank” size=”medium” ]Hard Times: The Divisive Toll of the Economic Slump[/amazon_image]

The book is the product of a five-year research programme conducted by the University of Manchester (my new home as Professor of Economics from 1 September) and Harvard University, directed by Robert Putnam, famously author of [amazon_link id=”0743203046″ target=”_blank” ]Bowling Alone[/amazon_link] and its fascinating precursor [amazon_link id=”0691037388″ target=”_blank” ]Making Democracy Work: Civic Traditions in Modern Italy.[/amazon_link] The presentation of those depressingly familiar economic statistics is accompanied by interviews with a range of people affected by unemployment, or precarious employment, or benefit cuts since 2008. It humanizes the – well, “wearyingly familiar” –  statistics and charts.

The human stuff – the social capital – really matters. [amazon_link id=”0300203772″ target=”_blank” ]Hard Times[/amazon_link] begins by citing a classic (1933) sociological study of the effects of mass unemployment, [amazon_link id=”0765809443″ target=”_blank” ]Marienthal: the sociography of an unemployed community[/amazon_link]. In this small Austrian town whose mill closed, people were asked to keep diaries, which recorded the loss of energy and social activity. Unemployment brought lethargy and isolation. The alternative in other places during the 1930s was rage.

[amazon_image id=”0765809443″ link=”true” target=”_blank” size=”medium” ]Marienthal (Ppr): The Sociography of an Unemployed Community[/amazon_image]

Other sociologists have demonstrated the importance of social ties in other contexts. One of my all-time favourites is Eric Klinenberg’s [amazon_link id=”0226443221″ target=”_blank” ]Heatwave[/amazon_link], which documents the clear impact of different family structures on ‘excess’ death rates during a Chicago heatwave: Hispanic families and neighbourhoods, more cohesive than equally poor African-American neighbourhoods, saw fewer fatalities. Another recent book has pointed to the psychological debilitation caused by poverty, [amazon_link id=”1846143454″ target=”_blank” ]Scarcity[/amazon_link] by Sendhil Mullainaithan and Eldar Shafir.

[amazon_image id=”1846143454″ link=”true” target=”_blank” size=”medium” ]Scarcity: Why having too little means so much[/amazon_image]

It seems, though, that a reminder is needed that money (lack of) matters as much because of the social as well as the economic consequences. [amazon_link id=”0300203772″ target=”_blank” ]Hard Times[/amazon_link] argues that the roots of a lack of social resilience stretch back before the crisis. “For all the riches of the millennial years, we found swathes of society that were already sorely exposed by that time.” Rising poverty rates before 2008, declining volunteering, drops in marriage rates (in the US) among some disadvantaged groups and of course rising inequality, all “worked to leave more of the vulnerable braving the storm in effective isolation.”

What to do? Well, it is indeed “wearyingly familiar”. Although the book supports the argument made for example by David Clark and Richard Layard in [amazon_link id=”1846146054″ target=”_blank” ]Thrive[/amazon_link] for additional mental health support, its point is that fundamentally money matters – jobs, a duly enforced minimum wage and decent working conditions, and an adequate safety net. Without an adequate income, and beset by anxiety about financial insecurity, people become isolated. Isolation damages their health and well-being, and causes a vicious cycle of vulnerability and still more insecurity. People with not enough money are not bowling alone, they are just alone.

The economic dilemmas involved in any job market interventions or social security are familiar too, the incentive effects and the trade-offs. But it’s good to be reminded that social consequences should form part of the calculation.

Poverty and inheritance

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There’s an old Pelican on my shelves, [amazon_link id=”0804614679″ target=”_blank” ]The Economics of Inheritance[/amazon_link] by Josiah Wedgwood, nicely musty and yellowed. It was first published in 1929; I have the revised 1939 edition.

[amazon_image id=”0804614679″ link=”true” target=”_blank” size=”medium” ]The economics of inheritance,[/amazon_image]

It begins with a discussion of poverty and inequality, including this section.

“Material welfare has no significance except in its relations to men’s feelings and as one element in the psychological state called happiness. And the extent of a man’s happiness depends on the number and intensity of the desires which he is able to satisfy relative to he number and intensity of those which he is not able to satisfy. For this reason, certain religious teachers have striven to achieve happiness by eliminating all desires save those which they believed were capable of complete and permanent satisfaction. By contrast, in the search for material welfare, our modern civilisation under conditions of industrial progress is continually manufacturing new and previously unwanted sources of pleasure, so that old luxuries become new necessities, alike for those who can and cannot afford them. …

“`Though the amount of good and services enjoyed by the poor man in 1924 may be enormously greater than those enjoyed by his predecessor in 1824, the former’s poverty is probably little less tedious and unpleasant to him than an actually more grinding poverty was to the latter.”

There is a very thoughtful review of Julia Unwin’s book [amazon_link id=”1907994165″ target=”_blank” ]Why Fight Poverty?[/amazon_link] on 3am Magazine by the philosopher Richard Marshall (he reviews the whole Perspectives series). Lee Crawfurd also reviews Unwin’s book and takes issue with the idea of relative poverty, expressed above by Josiah Wedgwood.

[amazon_image id=”1907994165″ link=”true” target=”_blank” size=”medium” ]Why Fight Poverty? (Perspectives)[/amazon_image]

Incidentally, I’m pleased to see OUP is bringing out a collection of Richard Marshall’s essays, [amazon_link id=”0199969531″ target=”_blank” ]Philosophy at 3:am[/amazon_link] very soon.

[amazon_image id=”0199969531″ link=”true” target=”_blank” size=”medium” ]Philosophy at 3:AM: Questions and Answers with 25 Top Philosophers[/amazon_image]

As for Josiah Wedgwood, the second half of his book recommends inheritance tax (at 60% or so) and a gift tax, as well as progressive income tax. He wrote: “The ethical arguments in favour of claims to inherit… are extraordinarily weak.” Parents should support their children to give them a good start until they reach adulthood. He rejects the idea of any right to bequeath property. It’s a radical read in today’s climate – but that’s why we have a new gilded class. Like so many others, I’m keen to read Thomas Piketty’s [amazon_link id=”067443000X” target=”_blank” ]Capital in the 21st Century[/amazon_link].

[amazon_image id=”067443000X” link=”true” target=”_blank” size=”medium” ]Capital in the Twenty-First Century[/amazon_image]

Housing word association

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The week between Christmas and New Year is always a wonderful time for reading, both books and catching up on the wealth of articles bookmarked in the busy weeks before the holidays. So I’ve had time to read a new London Review of Books essay by James Meek about housing in the UK. Or rather, the housing crisis, as the title has it, in what has become the automatic word association.

As the chart in the article makes perfectly plain, there is a crisis of inadequate supply, on a scale that in the past was addressed by some substantial policy interventions. I am absolutely not a political expert, but it does seem to me that housing is one of the basics that voters will care about – something Margaret Thatcher as well as Aneurin Bevan understood perfectly well.

The Meek article ends with a quote from Julia Unwin of the Joseph Rowntree Foundation: ‘At the turn of the 20th century, the free market had provided squalid slums. We undoubtedly face the re-creation of slums, the enrichment of bad landlords, the risk of people being destitute. Beveridge had soup kitchens. We have food banks. We’ve got something that does take us back full circle, a deep divide in way of life between people who are reasonably well off and those who are poor. There’s always been a difference, but the distinction seems to be more stark now.’

Julia is one of my Perspectives authors, and I highly commend her new book [amazon_link id=”1907994165″ target=”_blank” ]Why Fight Poverty?[/amazon_link] It seems to me spot on in identifying the emotion of fear – fear of becoming poor, fear of poor people – as a barrier to doing anything about poverty.

As it happens, I’ve also commissioned Kate Barker to write a Perspective on the housing crisis, due out later this year. Kate was the author of two authoritative reports on planning and housing a few years ago, and her recommendations in the run up to a UK general election campaign will be essential reading.

[amazon_image id=”1907994165″ link=”true” target=”_blank” size=”medium” ]Why Fight Poverty? (Perspectives)[/amazon_image]

There are a few other books around about housing. I’ve read Neil Monnery’s Safe As Houses which gives a very useful historical and also cross-country overview. A bit old now, but excellent on the economic analysis, is David Miles’s [amazon_link id=”0471952109″ target=”_blank” ]Housing, Financial Markets and the Wider Economy[/amazon_link]. David is on the Monetary Policy Committee and no doubt paying close attention to the current house price surge and mortgage conditions.There are some excellent blogs too – Alex Marsh writes one, Jules Birch another.

[amazon_image id=”B00FOU4GLA” link=”true” target=”_blank” size=”medium” ]Safe as Houses: A Historical Analysis of Property Prices (Paperback) – Common[/amazon_image]

Poverty, fear and loathing

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Economics is famously, or notoriously, abstract. It is a discipline focused on the calculating parts of human behaviour, rather than the emotions. This would have made no sense to Adam Smith. As Emma Rothschild argues in her book [amazon_link id=”0674008375″ target=”_blank” ]Economic Sentiments[/amazon_link], “Economic life is a system of sentiments.” This is why for Smith, [amazon_link id=”1840226889″ target=”_blank” ]The Wealth of Nations[/amazon_link] followed [amazon_link id=”0143105922″ target=”_blank” ]The Theory of Moral Sentiments[/amazon_link]. Economic behaviour only makes sense in the context of understanding what drives human beings.

[amazon_image id=”0674008375″ link=”true” target=”_blank” size=”medium” ]Economic Sentiments: Adam Smith, Condorcet and the Enlightenment[/amazon_image]

Julia Unwin’s book Why Fight Poverty? in our Perspectives series lies in this tradition, and makes a really important contribution to the public policy debate. She argues passionately that poverty is not inevitable, it can be reduced, but nothing will change unless we face up to the emotions that seeing poverty arouse in most of us – the fear, the shame, the sense of disgust, giving rise to the creation and retelling of myths about poor people.

[amazon_image id=”1907994165″ link=”true” target=”_blank” size=”medium” ]Why Fight Poverty? (Perspectives)[/amazon_image]

The role of ‘moral sentiments’ in addressing poverty is a timely theme on the day the Joseph Rowntree Foundation and Prospect are launching a recent set of essays (free e-book) on poverty at an event in the House of Commons. One of the chapters in Julia’s book is titled ‘Is poverty inevitable?’ The answer is no.

Poverty, fear and loathing

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One of the books I read on holiday this past week was Alan Johnson’s memoir, [amazon_link id=”0593069641″ target=”_blank” ]This Boy.[/amazon_link] It’s a very moving testament of love to his mother, who was abandoned by her feckless husband and died young, and his older sister, who subsequently brought him up despite being just a teenager herself. Born in 1950, he grew up in extreme poverty in wast London. Few people who experience that kind of deprivation – cold, damp, cramped rented housing, hunger, constant debt, second hand clothes, lack of hot water, power being cut off – write about it or are paid any attention if they do so. It was Mr Johnson’s success, via his union, in politics that gave him a voice and an audience. His story is both a great family saga, both sad and uplifting, and an unusually authentic account of being brought up in material poverty. It is especially revealing to see how hard it is for anybody – even someone as hardworking and determined as his mother Lily – to safeguard children from their circumstances. It must be heartbreaking for parents not to be able to stop their children being hungry, not to be able to protect them from the everyday violence of the streets.

[amazon_image id=”0593069641″ link=”true” target=”_blank” size=”medium” ]This Boy[/amazon_image]

It would be a mistake to think that this kind of poverty is history. Conditions are somewhat better than in the 1950s and 60s, but it is still hard for most of us to appreciate the lives of people on low incomes. This column by food blogger Jack Monroe recounts how scarily easy it is, too, to become poor – as she points out forcefully here, she did not fall in to any of the usual tabloid blame categories. Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, has written a marvellous book, [amazon_link id=”1907994165″ target=”_blank” ]Why Fight Poverty[/amazon_link], out soon in a new series I’ve been editing, in which she highlights both the standard failure of imagination about poverty, and the fear that either makes us unwilling to think about the lives of people who do not have enough money, or turns into loathing and blame.

[amazon_image id=”1907994165″ link=”true” target=”_blank” size=”medium” ]Why Fight Poverty?: And Why it is So Hard (Perspectives)[/amazon_image]

I think she’s right to draw our attention to the emotional baggage we bring to the subject, and the barriers to tackling poverty created by our unacknowledged fear. I do recommend reading [amazon_link id=”0593069641″ target=”_blank” ]This Boy[/amazon_link].