The Struggle for Development

Benjamin Selwyn

• Publisher: Polity
• Year: 2017
• Print ISBN: 9781509512799, 9781509512782
• eBook ISBN: 9781509512829
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

The world economy is expanding rapidly despite chronic economic crises. Yet the majority of the world's population live in poverty. Why are wealth and poverty two sides of the coin of capitalist development? What can be done to overcome this destructive dynamic?

In this hard-hitting analysis Benjamin Selwyn shows how capitalism generates widespread poverty, gender discrimination and environmental destruction. He debunks the World Bank's dollar-a-day methodology for calculating poverty, arguing that the proliferation of global supply chains is based on the labour of impoverished women workers and environmental ruin. Development theories – from neoliberal to statist and Marxist – are revealed as justifying and promoting labouring class exploitation despite their pro-poor rhetoric. Selwyn also offers an alternative in the form of labour-led development, which shows how collective actions by labouring classes – whether South African shack-dwellers and miners, East Asian and Indian Industrial workers, or Latin American landless labourers and unemployed workers – can and do generate new forms of human development. This labour-led struggle for development can empower even the poorest nations to overcome many of the obstacles that block their way to more prosperous and equitable lives.

1
The Big Lie

Introduction

In his dystopic novel 1984, George Orwell depicts a world of perpetual war, total government surveillance and infinite ideological manipulation of the population. The novel’s main character, Winston, describes how the state pursues ideological manipulation through the practice of doublethink, which he defines as follows:

To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, … to use logic against logic, to repudiate morality while laying claim to it …. To tell deliberate lies while genuinely believing in them, … to deny the existence of objective reality and all the while to take account of the reality which one denies. (Orwell 1977: ch. 3, ch. 9)

In this book I argue that contemporary reasoning about development, as propounded by institutions such as the United Nations, the International Labour Organization, the World Bank, many non-governmental organisations, state leaders and the mass media, represents a giant exercise in doublethink. It is based on an endlessly repeated set of interlinked claims:

1. 1 that continued economic growth represents the surest route towards poverty reduction and development;
2. that a rising number of people across the world are enjoying the fruits of this development;
3. that this improvement is due to their increasing participation in global markets; and
4. that it is possible to envision a world free of poverty within our lifetimes.

These arguments, and those actors and institutions that promote them, are here labelled the Anti-Poverty Consensus (APC).¹

Global capitalism and human impoverishment

Global capitalism is an immense wealth-generating system. Despite the chronic global economic crisis that emerged in 2007, total global wealth (the sum total of money and other assets) continues to multiply. In 2013 it reached an all-time high of US$241 trillion, an increase of 68 per cent since 2003. The Swiss-based financial organisation Credit Suisse estimates that total global wealth will reach US$345 trillion by mid-2020.² While some of this wealth is a product of new financial technologies and instruments, and might thus be labelled fictitious, its growth represents a general trend within capitalism – of systemic wealth accumulation. This growing pot of wealth is generated by the continual transformation of nature into products (and the services and information required to sell and use them) performed by an ever-expanding global labouring class.

If economic growth and expanding global wealth are the determinants of an improving world, then the APC is correct. But total wealth itself tells us nothing about either the conditions of the world’s population or the health of the planet. Capitalism’s core social relations – the exploitation of labour by capital and endless competition between firms – ensure that, rather than eliminating them, economic growth reproduces inequality, poverty and environmental destruction.

Ending global poverty through economic growth alone will take more than 200 years (based on the World Bank’s inhumanly low poverty line of $1.90 a day) and up to 500 years (at a more generous poverty line of $10 a day) (Hoy and Sumner 2016; and see chapter 2). The damage to the natural environment caused by several more hundreds of years of capitalist growth would wipe out any gains in poverty reduction (see Woodward 2015).

APC proponents seldom enquire into the conditions under which such wealth is produced and distributed. When they do, such enquiries are guided by the presumption that employment benefits workers. In this way, the APC seeks to disable any genuine investigation into ways in which capitalism, and in particular the capital–labour relation, is, itself, the cause of global poverty.

But let us consider the following data:

• in 2015, sixty-two individuals owned the same wealth as 3.6 billion people, the bottom half of humanity;
• the wealth of the richest sixty-two people increased by 44 per cent between 2010 and 2015 – an increase of over half a trillion dollars – to US$1.76 trillion;
• during the same period, the wealth of the bottom 50 per cent of humanity fell by over US$1 trillion – a drop of 38 per cent. (Hardoon et al. 2016) Global wealth continues to concentrate. By early 2017 the richest eight men in the world owned the same wealth as the bottom half of humanity (Oxfam 2017). Speaking as a member of the US’s capitalist class, billionaire Warren Buffett has commented that ‘there’s been class warfare going on for the last 20 years, and my class has won.’³ The data above show that this class warfare, from above, is a global phenomenon.

If the world was governed by just principles, these data would generate a genuine, open and public consideration of whether wealth concentration is predicated upon the proliferation of poverty. But it is not. Orwellian doublethink cloaks capitalism’s exploitative social relations and their destructive effects in emancipatory clothing. The APC proclaims loudly and ceaselessly that globalisation is good for the poor. Based on an international poverty line of $1.90-a-day purchasing power parity, the World Bank claims that, in 2015, the proportion of the world’s population living in extreme poverty fell to under 10 per cent.⁴ (The concept of purchasing power parity will be explained in chapter 2.)

This figure and the interpretations derived from it are weak, to say the least. It derives from the generation and application of an inhumanly low poverty line to calculate global poverty levels. The claim that global poverty is low and falling is entirely dependent upon where the poverty line is set. Slightly higher poverty lines (which are still, in reality, very low) show persistently high (and, depending on the poverty line, sometimes increasing) levels of global poverty over the last four decades.

Sanjay Reddy and Thomas Pogge (2010: 42–54) show, for example, that, when global poverty is measured according to the World Bank’s ‘official’ poverty line (which used to be $1.25 a day), it decreased by 27 per cent between 1981 and 2005. However, if a slightly higher poverty line of $2.00 a day is used, during this period poverty increased by 1 per cent. A poverty line of $2.50 a day reveals an increase of 13 per cent. Such considerations extend beyond academic discussion. For example, using the World Bank’s poverty line, the poverty rate in Mexico in the early 2000s was approximately 5 per cent. However, according to Mexican federal government poverty measures, approximately 50 per cent of the national population suffered from poverty (Boltvinik and Damián 2016: 176–7).

World Bank claims that global poverty is low and falling do not tally with data on global hunger trends. The Food and Agriculture Organization (FAO) generates data about daily calorie intake based on ‘normal’ (white-collar-type) activities and ‘intense’ activities (such as working in fields, plantations, factories and mines). In 2012, based upon calorie requirements to support normal activities, 1.5 billion people were hungry. For people undertaking intense activities, the numbers suffering from hunger increased from around 2.25 billion in the early 1990s to approximately 2.5 billion in 2012 (FAO 2012; Hickel 2016: 759–60). Many experts on poverty argue that the World Bank’s poverty line is much too low, and they recommend that it be raised significantly, so that it is between four and ten times higher (Edward 2006; Woodward 2010; Pritchett 2006; Sumner 2016; and chapter 2 below). At these levels, the majority of the world’s population lives in poverty.

The anti-poverty consensus

The anti-poverty consensus (APC) consists of numerous institutions across the political spectrum, ranging from the United Nations, the World Bank, the International Monetary Fund and the World Trade Organization to, perhaps more surprisingly, the International Labour Organization and many ‘progressive’ institutions, organisations and intellectuals. The Economist expresses succinctly the core of APC ideology: ‘Most of the credit [for global poverty reduction] … must go to capitalism and free trade, for they enable economies to grow – and it was growth, principally, that has eased destitution.’⁵ To be sure, some APC institutions such as the World Bank (and The Economist) are more liberal, while others such as the International Labour Organization are more ‘interventionist’. The former argues that states must support market expansion, while the latter argues for closer state involvement and intervention in markets to protect and promote labour standards. Both, however, maintain that poor country integration into global capitalist markets (under the correct conditions) and continued economic growth represent the surest path to poverty reduction.

The anti-poverty consensus portrays capitalist development in win–win terms, where the correct type of global integration benefits capital and labour. But this win–win scenario is a myth. It is a lie sold to the world’s poor in order to legitimate continued capital accumulation and economic growth. In reality, the APC justifies and contributes to global wealth concentration while hiding the continual impoverishment of the world’s majority. It rationalises the oppression and exploitation of the world’s poor in the name of helping them. It presents as solutions to poverty the causes of poverty. Its arguments are supported by sophisticated pseudo-scientific methods. The APC’s win–win portrayal of capitalist development contributes to the delegitimation and physical repression of forms of human development that do not correspond to its model of perpetual economic growth.

However, the APC’s core claim – that continuous economic growth represents the surest way to achieve generalised human development – is being rejected increasingly across the globe. For example, Pope Francis, speaking to (perhaps on behalf of) a broad constituency of the world’s poor, argues that capitalism imposes ‘the mentality of profit at any price, with no concern for social exclusion or the destruction of nature’. Further, ‘this system is by now intolerable: farm workers find it intolerable, labourers find it intolerable, communities find it intolerable, peoples find it intolerable. The earth itself … finds it intolerable.’⁶

The anti-poverty counter-consensus

It is not only this book that argues against the APC. There is powerful, vocal, and often popular opposition to the APC which highlights many of its limitations and suggests alternative, state-led or state-assisted, development strategies. It is advanced by writers such as Amartya Sen, Joseph Stiglitz, Thomas...

Table of contents

• Cover
• Title Page
• Copyright
• Preface and Acknowledgements
• 1 The Big Lie
• 2 Capitalism and Poverty
• 3 Poverty Chains and the World Economy
• 4 Deepening Exploitation: Capital-Centred Development
• 5 Resisting Exploitation: Labour-Led Development
• 6 Beyond Exploitation: Democratic Development
• References
• Index
• End User License Agreement