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Tuesday, December 8, 2009

HOW NOT TO COUNT THE POOR

Though written in 2005, this important paper has been ignored.You know those $1 a day income poverty demarcations that all global studies seem to take for granted-- they stand in the way of our measuring the extent of poverty and evaluating remediation efforts. All this, and some simple but better measures, are explained in great detail in this surprisingly brief paper.

http://www.columbia.edu/~sr793/count.pdf

While I have no reason to believe that the authors are Marxists, the following excerpt recalls a relevant point from Marx's Capital, v.1.

Our rejection of the Bank’s procedure does not support the skeptical conclusion that theattempt to provide a standard of income poverty comparable across time and space isdoomed to fail. There exists a much better procedure which can be easily implemented.This alternative procedure would construct poverty lines in each country that possess acommon achievement interpretation. [the authors go on to explain these common achievements as consisting of, e.g., gaining satisfaction of basic nutritional needs.]

That the authors have got even this far makes this article worth some study. Marx after all pointed way back to Aristotle, on much the same basis as that which might lead us to appreciate this criticism of neoliberal shell games, for recognizing that “Exchange cannot take place without equality, and equality not without commensurability." That neither they nor Aristotle recognized labor as the tertium comparationis in these value comparisons does not render their bit of work completely useless.

This paper calls out such institutions as the World Bank for using distorted money measures where, instead, a focus on "elementary human requirements" is needed. This leads the authors to focus on the common use value of the commodities that the poor need access to (a rationale that has some merit). The Banksters are, not surprisingly, focused only on the other end of the duality (exchange value).

So, to paraphrase Monty Python, if your stick has only one end, and if that end is not covered with shit, you must be a Bankster.

The authors' abstract may provide further inducement for you to read the article in full:

Abstract:
The World Bank’s approach to estimating the extent, distribution and trend of globalincome poverty is neither meaningful nor reliable. The Bank uses an arbitraryinternational poverty line that is not adequately anchored in any specification of the realrequirements of human beings. Moreover, it employs a concept of purchasing power"equivalence" that is neither well defined nor appropriate for poverty assessment. Thesedifficulties are inherent in the Bank’s “money-metric” approach and cannot be crediblyovercome without dispensing with this approach altogether. In addition, the Bankextrapolates incorrectly from limited data and thereby creates an appearance ofprecision that masks the high probable error of its estimates. It is difficult to judge thenature and extent of the errors in global poverty estimates that these three flaws produce.However, there is reason to believe that the Bank’s approach may have led it tounderstate the extent of global income poverty and to infer without adequate justificationthat global income poverty has steeply declined in the recent period. A new methodologyof global poverty assessment, focused directly on what is needed to achieve elementaryhuman requirements, is feasible and necessary. A practical approach to implementing analternative is described.

from The Cleveland Low Wage Capitalism study group