Patterns of Wealth and Poverty

Throughout history there have always been those who have it, and those that
don’t. Yet how do we distinguish between the two groups? There has been a number of
ways thought up, such as if a families total earnings are sufficient to obtain the minimum
necessity’s to live without extra spending. Another theory is that instead of defining the
poor as those who income is too low, they are poor if their incomes are considered too far
removed from the rest of the society in which they live. But many believe that poverty
refers to a variety of conditions involving differences in home environment, material
possessions and educational and occupational resources as well as financial resources.
One can also compare the wealth of different nations. You can measure the Gross
National Product of a country and then class it as rich or poor, but this does not show the
distribution of their wealth. You can also show the human development index, which
takes into account such things as literacy rates, access to health care, and life expectancy.

The Way in which people view the world, among other things, is influenced by
your position in society and your wealth. Those who live in the rich industrialized
countries of the north have labeled the twentieth century as an era of economic miracles.
Since the beginning of the twentieth century the average value of goods and services has
risen by about 20 times, while the products of industry have grown 50 times. In 1989
there were 157 billionaires and 2 million millionaires. There are now 233 billionaires.
The poor see it a different way. There are 100million homeless, 400 million people
undernourished, and two billion people drink and bathe in contaminated water. The poor
also suffer from environmental damage done by the wealthy.

Economic Inequality:
In 1960 it was stated that the wealthiest 20 per cent of the population were
30 times better off than the bottom 1 billion. In 1995 they were 150 times better off
approximately. Karl Marx believed that the rich elite linked inequality in to unequal
property rights and exploitation of labour. The neo-classical-economists of the early
nineteenth century recommended that income should be related to productivity or who
gets what depends on who owns what. This new theory didn’t solve inequality.

Nowadays the developing countries get done over by the developed countries on
an international, national and local scale. Internationally they face adverse effects from
being unequal partners in the world market and trade agreements. They are also affected
by trade unions in industrialising countries as well as declining terms of trade. They get
affected on a national scale as few resources trickle down from the rich to poor, causing
inequality within these countries. This can be measured by the Lorenz curve at the end of
this report. On a local scale there are often inequalities in the tax system. Infrastructure
and regulations favour the rich few over the poor majority.
Causes of Economic Inequality:
Poor people are unable to satisfy their basic needs such as food, water and
shelter, while rich people are able to satisfy their basic needs as well as afford additional
comfort goods. This gap between the rich and poor is extremely important and must be
solved. The poor are a wasted, valuable human resource when they are unable to have
adequate education to contribute their skills and thoughts to society. If this gap continues
to expand then social unrest can occur which can result in strikes and riots. There are
many reasons why inequality exists, for example the normal functioning of a capitalist
economy means that there will be inequality as do government economic policies. There
are also always discriminatory policies regarding gender and races and changes in
housing markets and the effects of urban structure all contribute to inequality. There is
often people who have rich parents and so receive wealthy inheritances. These are just a
few of the reasons.

Absolute poverty:
Poverty is far more than economic. The horror of poverty extends to all
aspects of life including susceptibility to disease, limited access to most types of services
and information, lack of control over resources and subordination to higher social and
economic classes. Over 1.2 billion people or 23 per cent of the world’s population live in
absolute poverty. Absolute poverty is described as the lack of sufficient income received
in cash or alike to meet the most basic biological needs of food, clothing and shelter.
Absolute poverty is estimated as only receiving between $50 and $500 per year
depending on price changes and access to goods and services. Another more colloquial
response is that “absolute poverty is a condition of life so characterised by malnutrition,
illiteracy, disease, squalid surroundings, high infant mortality rates and low life
expectancy as to be beneath any reasonable definition of human decency.” The reason for
this is partly due to rapid population growth, falling commodity prices, rising
unemployment, growing international debt, environmental degradation and an increasing
share of income into the hands of rich landlords and T.N.C’s.

Poverty at a Variety of Different Scales

The causes of poverty begin at a local, national, and international scale.
Major policy changes are required from the global scale to the local village to eventually
reduce poverty.
Local Scale:
The absolute poor in developing countries include landless peasants,
agricultural labourers, tenant farmers, sharecroppers working on farms in marginal areas,
and the unskilled urban poor working in the informal sector. The number of absolute poor
in developed countries is ever increasing although currently it is lower than those in the
developing countries are. There are increasing numbers of unskilled, unemployed youth
that is creating many social problems. Food, clothing and shelter are being increasingly
provided for by charities. Because of this many governments have had to spend more
money on unemployment benefits. The poor have little access to property or capital and
they also own small, fragmented, unproductive farms at a local scale. They have higher
rates of unemployment and underemployment as over 40 million people enter the work
force yearly. They have little power against corrupt institutions and prevalence to
diseases, which results in physical weakness.
National Scale:
At a national scale, government tax policies and preparation of
infrastructure frequently favours the small rich minority. The president of Cote d’Ivoire
recently completed construction of a $200 million air-conditioned Catholic cathedral
decorated with French stained glass and Italian marble, the church is located in an
impoverished country whee only one-tenth of the population is Catholic. At a national
scale governments tend to favour development of urban areas over rural areas leading to
regional inequality. Subsidised urban hospitals get a much greater proportion of public
health funds. This leads to increasing expenditure on the rich few whom are the ones who
need it the least, and so ignores the rural majority and their health care needs. Between 70
per cent and 85 per cent of public health funding is spent on expensive curative care and
the smaller remainder is spent on preventative care. The incapacity of the rural sector to
provide adequate incomes or facilities has been one of the major reasons for rapid rural-
urban migration in most developing countries. The rate of population increase in many
urban areas is greater than the government can build schools, housing and clean water.
This leads to increasing unemployment and underemployment, squatter settlements,
growth of the informal sector and underpaid and exploited unskilled labour.
Global Scale:
As stated in a report released by the United Nations on the 9 September
the global economy is only helping to increase the gap between the rich and the poor.
Therefore the economy that needs adjustment is the global economy. Until that happens
any structural adjustment will be little better than “rearranging the furniture inside the
debtors prison.” On a global scale the developing world has 75 per cent of the population
but only 17 per cent of GDP. The large scale logging of forests and the mining of
minerals has resulted in a major movement of natural resources from developing to
developed countries. Commodity prices also moved against the poor during the 1980’s as
the prices of 33 commodities fell 40 per cent between 1980 and 1987. Increasing trade
barriers by rich countries caused a decrease in export prices from poor developing
countries. For example the E.U. levied a tariff four times higher for imports from poor
countries than from rich industrialised countries on cloth. The World Bank says that
tariffs cost developing countries between $50 and $100 billion in lost sales yearly.

How Poverty Affects the Environment:

Ozone depletion, acid rain, enhanced greenhouse gases and increasing
radioactivity are all products of increasing wealth. But poverty is also increasing
environmental degradation and overexploitation of mineral resources. Resources have
been overused due to the high rate of exploitation. A continuing downward spiral of
economic degradation exists. Poor people must sustain the place in which they live for
their “food comes from the soil, water from the streams, fuel from the woods, fodder
from the pastures and fruit from around the hut.”
 Geographic concentration of poverty in inhospitable areas is occurring. In
Washington 47 per cent of the absolute poor live on marginal lands. In the USA “the
poorer the neighbourhood and the darker the skin of it’s residents, the more likely it is to
be near a toxic waste dump. Hundreds of millions of people currently suffer from
desertification, deforestation, fuelwood scarcity, salinity, soil erosion, air and water
pollution. Green house gases will adversely affect many poor people. Many of the
world’s most productive agricultural areas could suffer higher temperature, decreased
rainfall or both, which will increase the rate of crop failure many times over.

Solutions to Inequality:
It has been said that the redistribution of income from the rich to the poor
could increase the quality of life of the poor, as the utility of the last dollar received by
the rich was less than the utility of the same dollar received by the poor person. From the
global to the local scale, public and private institutions have tried countless initiatives to
try and reduce poverty. True development does not simply provide for the needy but it
enables them to provide for themselves. This can occur by increasing self help groups.
Today their collective membership is hundreds of millions. Land reform, basic needs
infrastructure, welfare systems, employment programs, minimum wages, compulsory free
education all could help solve poverty. Ending poverty means the government must
implement many small schemes instead of large schemes such as highways and damns.
Kerala, a small village in India managed to successfully eliminate inequalities. Land
reform gave 1.5 million people land. The people there have access to health care and
schools. Increased literacy in women resulted in improved health of families and land
reform allowed the poor to increase their incomes and increased credit to the poor
allowed them to purchase essential livestock and tools. Family planning has improved the
birth rate and clean water and primary health care reduced diseases and death’s.

Chris Laurent

Bibliography:
Bliss. S. and Paine. J. 1997, Pathways to Geography; Development Geography.
Macmillan Press.

Jackson. B. 1994, Poverty and the Planet. Penguin Books.

Ternowetsky. G. W. 1980, Intergenerational poverty life styles and income

maintenance; An analysis of the cultural and situational views of poverty. Australian
Government Publishing Service, Canberra.

This report is 2050 words long.

 Geography

Individual Research Project

Year 10

Patterns of Wealth and Poverty

Chris Laurent
Contents:

Introduction 1

Economic Inequality 1
Causes of Economic Inequality 2
Absolute Poverty 2

Poverty at a Variety of different scales 2

Local scale 2
National Scale 3
Global Scale 3

How Poverty Affects the Environment 4

Solutions to Inequality 4

Bibliography 5

Abstract:

The report starts out defining the different types of poverty. It then explains how the
world and the past decade have been different depending on where you stand. It then goes
on to state numerous reasons for economic inequality. It then gives an example of a
different type of poverty other than economic. It states the differing levels where poor
people get the short end of the stick and shows how poverty can affect the environment
and how poor people usually live in the least hospitable places. It then concludes by
giving some solutions to solving inequality.