8 the flat earth hypothesis 2015

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THE FLAT EARTH HYPOTHESIS Poverty, capitalism and you


The cycle of capital Commodities Money

Money II

Commodities


Remembering capitalism 

Capitalism is the system in which ‘capital’ is invested to produce profits and increase the accumulation of capital

Global capitalism has produced unprecedented wealth

Yet the influence of global corporations and the profit motive has produced a number of difficulties


To what extent… ….has globalisation, or global capitalism, been beneficial for the global poor? ….do we live in an increasingly ‘flat’ earth? And, what does this have to do with us?



Today 

Understanding global poverty

Poverty and the global conscience

Capitalism and the development ladder

Poverty and you



What would it mean to be in poverty?




Absolute Poverty 

Absolute, or extreme, poverty is an income measure that calculates the minimum income required to meet basic needs (e.g. not die)



The difficulty comes in measuring income and deciding what are basic needs (and how much they cost) in each location


Measuring poverty 

World Bank measurements of absolute poverty are based on ‘Purchasing Power Parity’ (PPP)

PPP measures the amount of money needed to purchase the same amount of goods in each country, expressed in US dollars

The World Bank defines extreme/absolute poverty as living on less than $1.25 a day (it had previously been US$1.08)

Measurements are carried out through ‘household’ surveys and the methodology has been strongly challenged



What would be the minimum basic needs be in London?


How would you live? 

If your income was reduced to £.82 per day, or £5.64 per week, how would you live?  Would

you have shelter?

 Where

would you get your food and water?

 If

you had no land, or no opportunity to find formal employment, how would you try to find income?


What other factors would you include in a definition of poverty?


Poverty: World Bank World Bank: Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life


Poverty: United Nations United Nations: Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.


Is anyone in London living in poverty?


Poverty before modernity 

For large periods of human history poverty was seen as both natural and inevitable  Inevitable

because there were not enough resources for everyone

 Natural

because those who experienced poverty were born into that condition and had no means to rise above it

With the ideals of modernity and the economic progress of the industrial revolution came the possibility that poverty could, and should, be overcome


Millennium Development Goals (MDGs) 

The MDGs were set by the United Nations in 2000 to be achieved by 2015, with a baseline of 1990

Along with the ‘Make Poverty History’ campaign, the MDGs symbolised a new participative, interactive and individual approach to poverty

One of the eight goals was to ‘eradicate extreme poverty and hunger’, which has three measures: 1. 2. 3.

Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day Achieve full and productive employment and decent work for all, including women and young people Halve, between 1990 and 2015, the proportion of people who suffer from hunger



Progress! 

The Live8/Make Poverty History campaigns did make significant contributions to reducing absolute global poverty, although some promises were not kept

Huge amounts of 3rd world debt was cancelled, allowing for much higher public spending in these countries 

In the ten African countries that have had debts cancelled, there have been increases of around 40% on education spending and 70% in healthcare

Aid increased significantly: Africa received around US$11 billion more aid in 2010 than in 2004




Keeping up the good work? 

Whilst the majority of the world still suffer from material deprivation, there has been significant progress  

Approximately 50% of the world live on less than US$2.50 a day Approximately 80% live on US$10 per day

Development aid is valuable, but it has been economic growth that is the main driver of progress



Poverty and you Whilst considerable progress has been made, substantial poverty remains. What is behind these trends? Progress had been achieved through the global expansion of capitalism

A.

1.

Progress has masked the continued exploitation by the West of the rest

B.

1.



Your consumption produces demand which creates jobs that reduce poverty

Your consumption exploits vulnerable people and maintains their misery

Both these perspectives acknowledge the benefits of scientific advances in public health and agriculture, along with the value of aid and charitable contributions


The Flat Earth 

Economic interconnectedness is one of the distinguishing features of globalisation and global capitalism

From the 1970s capitalism began to expand rapidly through trade and the ‘out-sourcing’ of employment

Intensified connections between distant localities vastly reduces differences in economic opportunity Political changes in trade and technological changes in transportation have globalised manufacturing  Communication technology has allowed for the trading of services 

These factors have brought a huge supply of labour into the global market, leading to a ‘convergence effect’ and the idea of a global development ladder


Globalising employment


The Convergence Effect


The Development Ladder 

The idea of a development ladder was popularised by Jeffery Sachs (one of the authors of the MDGs)

It suggests that climbing out of poverty is possible, but is incrementally achieved through structural economic and political changes

These structural changes, often demanded by loan providers, require the country to open up to the global economy

Here ‘intensive manufacturing’ is just one step up the economic ladder



The Debate 

Supporters of ‘free-market’ capitalism acknowledge that capitalist societies do have ‘winners’ and ‘losers’

The winners have achieved their success by being entrepreneurial and working hard 

Eliminating global poverty is about creating conditions that allow for entrepreneurship and hard work to be rewarded

Marxist’s and other critics of capitalism suggest that wealth is accumulated through privilege and exploitation 

Those who start with resources are able to employ workers who are paid less than the value they create


The capitalist dream 

A nation increases its investment in education, law and order and infrastructure (often through aid and restructuring loans from global economic institutions)

It is able to attract Western companies to build factories based upon the abundance of cheap labour – the country’s natural advantage

The newly employed now have money to spend in other businesses, which also attract outside investment

As the economy expands, more tax is able to be spent on services, particularly on education

The cost of labour rises and manufacturing jobs go to other countries


China’s Climb 

By utilising its massive supply of labour, China was able to attract manufacturing investment which transformed the country from a rural, agricultural, economy to an industrial power

As more work came to China, the country grew richer and more money was spent internally

This raised living standards and increased the possibilities for more investment and development

Eventually, labour costs rise and lost-cost work goes elsewhere




The Marxist nightmare 

Economic restructuring propels large populations to migrate into urban slums

There are a number of small garment factories in their slum but, with so many people wanting jobs, the owners pay only what they have to keep their workers alive

Unable to get a job at the factories, the majority of people enter an informal economy of begging, temporary stalls and prostitution

A ‘poverty trap’ of survival mechanisms is continued





If you had a manufacturing company, would you employ workers from Bangladesh or Britain?



Is your phone good for the world, or just for you?


Below the Sahara Desert


Sub-Saharan Poverty 

The climate in parts of this region is particularly harsh, making it difficult to grow crops without technological intervention 

Many areas lack access to ports for trade and fresh water for irrigation and health

Much of the area exists in a ‘poverty trap’ whereby public heath issues, a historical lack of infrastructure and education prevent them from climbing onto the ‘development ladder’

People spend too much of their money on survival rather than ‘investment’

Foreign investment is often low and the educated elite often migrate 

Approximately 40% of African born scientists live in the OECD

That investment that does exist is often highly exploitative




What has this got to do with you? 

With the advent of globalisation and the idea of an interconnectedness world, there was an increased focus on global poverty

We experience this interconnectedness through the media as well as through economic associations

This comes to imply that we are responsible for that poverty, often through charitable discourse

These discourses appeal to us as consumers who have the capacity to respond



Congratulations !

You have just won £1million… … but it all has to be given to charity Where will it go?


Charitable difficulties 

Charity implies a choice rather than a moral obligation

It also takes away responsibility from Western citizens/nations – there is no sense that the winners of capitalism might be responsible

Charitable giving, and aid, can be a short term band-aid rather than being a long-term solution


Do the rich have a moral responsibility to help the poor?


Band-Aid 

Development aid is not an automatic solution to poverty

Whilst it can certainly help, the main issue is the organisation of economies in a local and global sense

Is the economy established so that people can work hard and succeed? 

Human rights, education, health care, infrastructure

Is the nation economy positioned in an exploitative way within the global economy? 

Development occurs only for the benefit of wealthier consumers and producers


Next Week WEEK 9 IT’S GETTING HOT IN HERE: CLIMATE CHANGE AND THE LIMITS TO EXPANSION READING:

Urry, J. (2010) Sociology and Climate Change. Sociological Review. 57 (s2), pp.84-100 Sachs, J. (2008) The Anthropocene in Commonwealth Wealth. Penguin: London, pp.57-82


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