Can We End World Poverty?
The facts of world poverty are well known. One half of humanity (three billion
people) lives on less than $2 a day. Of these 790 million, the majority in Asia and the
Pacific, are chronically undernourished. Nearly one and a half billion people have no
access to clean water, three billion no access to sanitation and two billion no access
In the wake of the Asian tsunami disaster an unparalleled level of donations raised
hundreds of millions of dollars from ordinary people. At the same time numerous
warnings were sounded that this charitable effort should not divert aid to Africa, and
Many people must have wondered whether, if such giving were sustained, something
fundamental could be done to end world poverty. The answer, says Phil Hearse, is
'no'. World poverty exists because of the fundamental structures of economic, social
and economic power. Huge donations to the less economically developed countries
eventually hit the barriers of exploitation, corruption and debt.
Already people are asking what will happen to the money donated after the tsunami -
whether it will end up in the pockets of local rich elites, or eventually help to service
the poor countries' debt to governments and banks in the rich countries.
Creating a world without poverty means radically changing what is produced, who
produces it, where it is produced and who consumes it. That is absolutely impossible
with massive political change on a world scale.
In his famous 1901 book The Ragged Trousered Philanthropists, Robert Tressell's
Marxist house painter entertains his fellow workers with the Great Money Trick.
Using bits of bread, knives and forks and a few pennies, he shows how the capitalists
end up with all the bread, all the money and all the knives and forks. Today's great
money trick is the exploitation of worldwide sweatshop labour by global corporations
and finance capital. Here's how it works.
Someone buys an expensive pair of trainers in their local shopping centre from a chain
store for £100. £17.50 goes in tax to the government, but they pass on £8 of that to in
debt repayment to big banks in Britain or abroad. The worker who made the shoes in
Indonesia gets 50p (a generous estimate). The shop bought the shoes for £60, thus
making a gross profit after tax of £22.50p. Of that sum, £12 goes to the insurance
company that owns the shopping centre as payment for the huge rent and service
charges. The shop assistant got 50p (again a generous estimate). Up to this point the
total profit for the shop is £10 and payment to finance capital is £20.
Of the £60 that the shoe company got from the retail chain, 50p went to the
Indonesian worker, transport cost £7, and £3 went on factory and advertising charges.
Total profit for the multinational sportswear company is therefore is staggering
Look at it another way, out of the whole deal the multinational sportswear company
and finance capitalists between them got £59.50p, the retail chain got £10 and the two
workers involved got £1 between them (although it's possible that this picture could
be modified by the transport workers getting a few pence more).
This modern great money trick is the Global Cheap Labour Economy. There is cheap
labour at both ends of the chain, but if the shop assistant is exploited, it is easy to see
that the Indonesian factory worker is super-exploited, and is usually much poorer and
has much worse living conditions that her shop assistant sister in the West.
The global cheap labour economy has a dramatic effect on what is produced, because
it's easy to see that high profit rates are especially concentrated in luxury and high
value production (including tourism) aimed at the rich countries, whereas profit levels
in subsistence goods for the poor countries yield much lower rates.
Pro-capitalist ideologues claim that we get 'cheap' goods because of low wages in the
third world. Not true. Workers in the poor countries could be paid much higher wages
without raising prices of imported manufactures in the West by a single penny -
provided the extortion-racket money paid to finance capital and the monopoly superprofits
The Great Money Trick part 2 is the global operation of the supermarket-agribusiness
nexus. At the heart of this operation too is the global theft of the labour of the poor.
The most direct one is the vertically integrated farming-retailing operation. A
supermarket chain owns a vegetable farm in Kenya. It sells dwarf green beans in
200gm packets for £1.20p. The seasonal, temporarily-employed agricultural workers
who picked them get a few pennies. Other farm and transport costs cost 10p - gross
overall profit around £1.05p. After rent payments to finance capitalists and wages in
the supermarket itself, total profit was probably around 70p. Profits in this type of
operation are typically hundreds or even thousands of times what was paid for wages
at either end of the chain.
Another variant is where the goods are produced by small independent farmers, who
sell their goods to local merchants, who in turn sell them to supermarkets or food
manufacturers. In this more complex system the profit has to be shared between
merchant, retailer and often a food manufacturing company.
But the vast operations of agribusiness are putting independent peasant farmers out of
business throughout the third world and buying up their land. A classic case is the
destruction of the peasant-collective system in Mexico, and the subsequent dominance
of US agribusiness. Former independent peasant farmers are forced to become
itinerant seasonal agricultural labourers, or alternatively gravitate to the slums in the
third world mega-cities, like Karachi, Mexico City and Jakarta.
Thirty years ago it was a commonplace that the majority of the world's population
were peasants living in the countryside. Now the number of urban dwellers is greater
than the peasantry, but something 60% of these city dwellers live in the giant urban
slums, the barrios and the favellas which form the outer ring of the great third world
Millions of these slum inhabitants have moved from the countryside as agribusiness
seizes control of land and agricultural production. Thousands arrive from the
countryside every day. How do they survive? Million are fully integrated into the
industrial proletariat, producing everything from cars to clothes. Others become
personal servants to the rich, at home or in the rich countries.
But many more than both these categories work in the informal sector,
as street traders or in unregulated local sweatshops. The informal sector
is often fully integrated into capitalist production circuits, and is the
ultimate in 'outsourcing', providing components for goods produced
by major companies, or acting as cheap retail outlets for the products
of those companies worldwide. Millions more however endure a precarious
existence, involved in petty crime, prostitution and other activities
The problem with charity and Western government 'aid' today is precisely that it fails
to address the structures of exploitation which are the causes of poverty - indeed it
often contributes to perpetuating the global cheap labour economy, by being tied to
'conditionalities' which demand the destruction of local public services, the
privatisation of everything, and priority to cheap exports to Western countries. Aid
from NGOs and charities sometimes does create sustainable projects, for example
poor farmers' co-operatives, but they are a drop in the ocean of world production, and
frequently subject to ups and down of world commodity prices.
Much more fundamental solutions are needed to permanently overcome world
poverty. These require striking at the roots of exploitation and the power of the big
corporations, on a world scale. Massive economic aid is required from the more
advanced countries, but this has to empower and enrich poor countries and
communities, not perpetuate their subordination.
It is easy to see from the examples below the kind of structural reforms that would
begin to address poverty in a long-term way.
A first step would be the cancel the debt to rich countries and banks, and replace debt
payments with reparation payments - systematic transfers of capital and technology
from the rich countries and the poor, to enable them to develop the basic social
services, infrastructure and industries. But of course, to be effective this depends on
disempowering and removing the local elites who often expropriate international aid.
Second, the third world water crisis has to be solved.
The escape from poverty is impossible without clean, regularly available water
for both rural and urban communities. Can it be achieved? The example of Africa
African water poverty would be eliminated by putting wells (about $6000 each) into
the 40,000 or so major African villages. The headline cost of such provision is a
trifling $240m, the cost of two US Stealth bombers.
Given the thousands of personnel needed to carry out such an operation and the costs
of transport, equipment, salaries etc., the overall cost might be $1bn. Compare that
with the $300bn US defence budget or the $150bn already spent on the occupation of
Making major inroads into water poverty on a world scale would cost a few billion
dollars. Peanuts. What is missing is the political will on behalf of the rich and
powerful to make it happen.
Third, it is easily possible to make inroads into the international health crisis. A first
obvious step would be to make cheap generic drugs to poor countries, and enable
those countries to freely make their own drugs, for example retrovirals for the untold
millions affected by the HIV virus. That means abolishing so-called 'intellectual
property rights' in drugs, which are merely a source of rents and superprofits for the
Drug and vaccination technology of course is just one aspect of tackling the world
health crisis. For example, the rise in malaria in Sri Lanka is a result of the demands
of the World Bank that publicly-funded malaria clinics be shut down and antimosquito
spraying of crops and wetlands be ended.
Cuba has been a model of health aid to countries in Latin America and Africa, sending
thousands of its doctors to Nicaragua, Venezuela, Mozambique and Angola, to help
establish local primary health care facilities such as village clinics, but also to train
local health workers. And usually this aid has been totally free. Imagine if the major
Western countries, with infinitely more resources, were to carry out a similar world
health campaign. But in today's conditions such a operation, apart from the funding,
would come up against two obstacles.
Sending hundreds of doctors and other health workers abroad would undermine health
services in the advanced countries, because they are almost always under-funded and
understaffed. This is just a tiny example of how it impossible to revolutionise life in
the poor countries without changing priorities in the rich countries.
All these measures to end the world health crisis, while making big improvements,
would ultimately come up against two major barriers. First, all the health facilities in
the world, including clean water, will not protect the health of communities that are
undernourished. Second, poor communities need basic facilities like electricity,
sanitation and decent housing, without which things disease, the weather and
inadequate cooking and cleaning facilities will continue to take their toll.
In other words, health depends not only on health care, but an all-round improvement
in the quality of life, which cannot be achieved without overcoming the global lowwage
economy. And there is the problem. Because the power and the wealth of the
owners and controllers of capital in the West - and their local allies in the poor
countries, 'comprador' elites who play the same role as the 'gang masters' in Britain,
corralling and controlling cheap labour - depend precisely on maintaining the world
Overcoming world poverty ultimately revolves round the question of power - power
in the rich countries, power in the poor countries. Structural reforms which address
poverty include massive transfers of capital and technology from the North to the
South; the abolition of the debt; and paying the direct producers -not the local
capitalist elites - much more for their commodities; and sending tens of thousands of
doctors, engineers, teachers and other experts to assist reconstruction in the poor
countries. All this hits at the profits and power of the richest few percent of the
The question then is how to empower the powerless and overcome the entrenched
power of the rich. Many have argued that education is the key to empowerment. The
example of the literacy campaigns in Cuba and Nicaragua shows how education can
enable people much better to understand their situation, challenge locals hierarchies
(including especially male dominance), get better jobs (sometimes) and improve their
economic situation (depending on the availability of such jobs).
But it would be terminally naïve to believe that on its own the 'pedagogy of the
oppressed' can transform world poverty. The literacy campaigns in Cuba and
Nicaragua occurred after revolutions, not before them. The fundamental question is
how to revolutionise social relations on a world scale.
The traditional Marxist term for the global cheap labour is 'imperialism'. In the poor
countries, fighting imperialism means conquering real national independence. That is
about controlling their own economic resources, giving land to the peasants and
meaningful employment to the urban poor. All that means defeating the local
proimperialist elites, who frequently entrench their power not just by economic privilege,
but the massive use of state and para-state violence.
In the North, a huge global justice movement has grown up. Its immediate demands -
an end to sweatshop labour, abolish the debt - are absolutely justified. This movement
acts as a permanent pressure on Western governments and the big corporations, which
in turn are forced to regularly announce new aid and debt-relief 'initiatives'.
But the global justice movement cannot achieve its long-term objectives without
developing a more coherent anti-capitalist and anti-imperialist perspective, which
understands that an end to global poverty means an end to imperialism, which in turn
means revolutionising power and wealth in the advanced countries too.
In Michael Moore's film Fahrenheit 9/11, George Bush is shown speaking at a dinner
of the ultra-rich. He jovially describes them as an audience of
the "haves and the havemores".
"Some people call you the elite" he says "I call you my base". Not just witty
but true. Without taking power away from them, world poverty is unconquerable.