Poverty and power: some half-time analysis

Poverty as disempowerment exposes the myth of economic growth as its solution. Economic growth may increase a nation’s income without addressing the question of power. In the absence of specific action to redress inequality and power distribution, economic growth will tend to benefit those who already have the power.

The US, for example, has nearly doubled its real GDP per capita in the 30 years to 2005 while the proportion of people below 50 per cent of the poverty level (as defined by the US Census Bureau) has increased. Yet even if growth does increase income and reduce some aspects of material poverty of the poor, it may still fail to address the underlying powerlessness that constitutes the real poverty.

John Kenneth Galbraith said, “Power is the great black hole in economic theory”. To seriously tackle global poverty that black hole needs to be addressed. The elephant in the room, however, is that to empower some means disempowering others. That is, it involves a redistribution of power.

The problem of poverty will not be solved by the rich continuing to donate their excess while failing to give up their privilege. We in the wealthy world must accept that our position of power is unsustainable and seek to re-democratise the world. That would mean redressing the power imbalances in the WTO, IMF and World Bank. It would mean limiting the power of corporations and returning power to national governments. It would mean an end to corporations buying influence over politicians.

It would not just be about the big end of town though. It may also mean higher prices for our goods and services. It may mean lower returns on our superannuation as corporate profits are checked. It may mean a lower standard of living for those of us accustomed to being at the top of the world’s pyramid.

Such changes will not come easily. Power is usually not given away without a fight. It is much easier to continue to provide charity and wring our hands when the problem doesn’t go away.

However, in the words of the UN Millennium Declaration, signed by the Australian Government, “we have a collective responsibility to uphold the principles of human dignity, equality and equity at the global level … We will spare no effort to free our fellow men, women and children from the abject and dehumanising conditions of extreme poverty, to which more than a billion of them are currently subjected. We are committed to making the right to development a reality for everyone and to freeing the entire human race from want.”

The second half is about to begin. It may prove much more costly.