The risks of conflating poverty alleviation with economic equality

One of them is an urgent and important problem while the other is a moral question

Takshashila GCPP alumnus Prakhar Misra brought to attention these lines from Pratap Bhanu’s book The Burden of Democracy:

The call for a redistributive politics was often confused between two aims, poverty alleviation and economic equality. In principal, the two are distinct.

It is rewarding to discuss these lines further and understand the differences between poverty alleviation and economic equality. It is rewarding because conflating the two concepts can lead to policies that achieve neither and in fact, worsen the status quo.

The word poverty itself can mean different things to different nation-states. In the current Indian context, some of the biggest challenges are malnutrition, lack of sanitation, homelessness, poor public health facilities and unaffordable education. These deficiencies in the living conditions are broadly classified into what is sometimes referred to as absolute poverty. Hence, poverty alleviation in India would mean enabling people to eradicate these problems from their own lives.

Economic inequality on the other hand can be broadly understood to be the same as relative poverty. When OECD countries worry about their poor, they are concerned with the differences in the incomes between the richest and the poorest. This is because they have largely solved the problems of absolute poverty that continue to plague countries like India. Targeting problems of relative poverty would mean that the rich should take the burden of reducing this inequality in the society as it might lead to the alienation of the poor.

The discourse in India about poverty has conflated between the aims of absolute poverty eradication and relative poverty eradication. This confusion is best expressed in common sensical paradoxes like “How can Indians accept that while some of the richest in India are amongst the richest in the world, some X% of people continue to die of malnutrition everyday?” This is a powerful and emotive argument that tends to veer the discussion towards economic equality. Invariably, this leads to redistributive policies which aim at transferring wealth from the rich to the poor.

In this approach to economic equality lies our problem. Aiming for equality when we have more pressing concerns of absolute poverty is detrimental to the society as a whole. A State that is optimising for poverty alleviation would focus on providing for public goods and rely on private enterprise to generate wealth. Economic growth would be its mantra so that no one is poor on an absolute scale. On the other hand, a State optimising for economic equality would be concerned about the best ways of redistribution alone. Such an approach without economic growth will disincentivise private enterprise, even stalling the process of absolute poverty eradication.

Then there is a larger philosophical question of whether a socialist society where everyone is economically equal, a right way to go? Will it not demotivate those who work harder? Will it not motivate free riders? These are moral questions best left for the society to answer. And even if we assume that a society where economic equality is a reality is the best one, why should we let the best be the enemy of the good?

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