Reducing Inter-generational Ethnic Poverty

Economics, Psychology and Culture

Greg Clydesdale

• Publisher: Routledge
• Year: 2020
• Print ISBN:
  9780367616304
• eBook ISBN:
  9781000261288
• Topic: Social Sciences
• Subtopic: Business General
• Index: Social Sciences

This book looks at human capital development and provides an explanation for why cognitive development varies among ethnic groups. The book uses an interdisciplinary approach to examine inter-generational ethnic poverty. It puts forth an argument that the ethnic poverty gap can be reduced, and to do so we need a broader view of human capital which considers the match between the nature of the economy and the specific capabilities needed. The book focuses on the interrelationship between developmental psychology and socio-economic status and argues that the most important relationship in a knowledge economy is actually the one between a parent and a child.

The book begins by looking at cultures and assimilation and investigates the link between education, culture and socio-economic status. It also attempts to answer the question of what the link between culture, parents and children's ability is and why ethnic groups vary in their nurturing. It delves into how parenting and cognitive development are interrelated.

This thought-provoking book concludes with an emphasis on nurture and how it may alleviate ethnic poverty and shape social policies. The book provides a strong thesis to counter explanations based on racial and genetic superiority.

1Introduction

In 2007, Nobel Prize-winner James Watson issued his forecast for Africa saying he was ‘inherently gloomy’ about the prospects for the continent. However, it wasn’t his forecast that upset people but his explanation why he expected poor outcomes. He said ‘all our social policies are based on the fact that their intelligence is the same as ours—where all the testing says not really’.¹

Watson was not the first to make these claims. They have been made repeatedly ever since intelligence tests found differences between ethnic groups. In 1994, Herrnstein and Murray’s book The Bell Curve claimed that socio-economic outcomes were a consequence of intelligence differences between ethnic groups.² This prompted the American Psychological Association to issue a response in which they questioned many of the claims in the book.³ Nevertheless, they acknowledged a difference in IQ scores between ethnic groups. They also acknowledged there is not an adequate explanation for those differences.

A number of explanations have been offered for the differences. These include the fact that IQ tests measure styles of intelligence that favour white people. Another explanation questions the very notions of intelligence and races. However, the most common explanations focus on the environment. Ethnic groups vary in their achievement because they live in different environments and these generate different developmental outcomes. In particular, minority ethnic groups experience lower socio-economic status, health and nutrition. They also experience structural disadvantages including discrimination and cultural trauma.

However, there is disagreement whether these explanations account for all the gap in intelligence scores. A number of writers, such as Eric Turkheimer, argue that environmental forces are a factor, but they do not account for all the gap in intelligence.⁴ Nicholas Mackintosh wonders if it is indeed possible to know what extent the environment explains the gap.⁵

It is hard to definitively state whether enough evidence exists as, despite their skills in scientific method, academics are still prone to bias reflecting their training and socio-political views. For example, James Watson is a geneticist, so he favoured a genetic explanation. Nevertheless, the debate will remain until the gap is firmly closed. This book hopes to close that gap, or at least make it a little smaller, but what is needed to do that? James Watson made it clear what would close the gap for him. He stated that he would like to see new knowledge that shows

nurture is much more important than nature but I haven’t seen any knowledge and there’s a difference on the average between blacks and whites on IQ tests. I would say the difference is genetic.⁶

In other words, to close the gap we need to pay closer attention to the nurturing process in different cultures. The father of economics, Adam Smith, lived in an ethnically homogeneous society, but he made an explicit judgement that differences in outcomes were caused by nurture not nature. He claimed:

The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom and education.⁷

Adam Smith believed we are born as relative equals but about the age of 6–8,

they come to be employed in very different occupations. The difference in talents comes to be taken notice of, and widens by degrees, till at last the vanity of the philosopher is willing to acknowledge scarce any resemblance.⁸

But this leaves us with unanswered questions. What are the ‘habits and customs and educational differences’ that create these differences in outcomes, and why do ethnic groups vary in their nurturing? We also need to know why these differences affect cognitive/intellectual outcomes.

The problem to date is many social scientists have deliberately shut the door on some nurture explanations. In particular, they will not consider a link between culture and poverty. As Princeton Professor Douglas Massey notes:

For decades, it was not possible to use culture and poverty in the same sentence in polite sociological company.⁹

That means they have closed the door on a corridor that could lead to solutions. Fortunately, not all scientists have ignored this direction. Anthropologists, developmental, educational and cross-cultural psychologists have all produced research that can help us understand the problem. This book draws on their work.

However, it must be stressed that this book is not about intelligence but economic performance. The book hopes that by gaining a greater understanding of cultural and economic differences, we can reduce poverty among disadvantaged ethnic groups. The focus is on wealth and poverty to which the issue of intelligence contributes. To close the poverty gap, we must open the door on a direction that many social scientists have not wanted to take. We need to understand the link between human capabilities, culture and the economy. In particular, three questions need to be answered:

• What is the link between culture and economic systems?
• What is the link between culture, parenting and children’s ability?
• What are the implications for policy?

Wealth creation and wealth distribution

One of the most enduring socio-economic problems facing academics and policy-makers is the experience of ethnic groups with a high propensity for poverty. By definition, it means that members of society do not equally experience that society’s benefits. At its worst, it contributes to a social structure where class divisions are characterised by ethnicity.¹⁰

This book examines the tendency of some ethnic groups to experience inter-generational poverty. Each ethnic group has its own particular history and characteristics, so a policy repertoire is needed that can accommodate those differences. Hence, the aim of this book is to provide an alternative explanation for this phenomenon and contribute to the policy options available.

Many explanations for poverty concentrate on power relations and structural forces, and with good reason. There is no end of examples where those at the top have used their position to take a disproportionate share of their society’s resources. This can be seen in feudal society in which serfs laboured in the fields to produce output that was appropriated by land-owning gentry. More recently, we need only think of the slave labour that African Americans were forced to endure.

In theory, a market economy is less likely to create such disparities as wage rates are determined by a person’s skills and the demand for those skills. However, market distortions can occur if a group gain a position in the market with significant negotiating power. For example, many CEOs in modern corporations have acquired positions whereby their incomes far exceed their economic contribution.

Structural explanations of poverty are related to power-based explanations. These do not necessarily state that a group is exploiting its power, but the structure of society is one which benefits their group at the expense of others. Once again, the academic research to support this view is boundless. Hence, there is good reason to view poverty and income distribution in terms of power relations and structural deficiencies. However, these explanations have not led to successful policies, perhaps because discrimination still exists.

A problem comes when these views shut out other explanations that contribute to the problem, in particular if we do not consider how wealth and income is created, in which case poverty is reduced to income distribution. Poverty is seen as a zero-sum game where one ethnic group benefits at another’s expense.

It is easy to believe that the existing level of wealth in society is the natural level, and poverty can be solved by simply distributing it more equitably. However, this view provides a false view of poverty and prosperity. In particular, it ignores the process of wealth creation by which poverty is eradicated.

For most of humanity, the natural level of wealth has been one significantly lower than that which exists today. Modern humans appeared about 200,000 years ago and, for most of the time since then, lived in nomadic tribal groups, hunting and gathering whatever their environment provided. By today’s standards, the natural level of wealth was one of poverty. Leaps in welfare occurred between 10,000 and 20,000 years ago with the domestication of animals, and the advent of agriculture about 12,000 years ago. Another leap in wealth occurred in those societies that experienced ‘civilisation’ and the birth of early market economies which enabled people to trade. Finally, 200 years ago, an industrial revolution occurred which propelled human standards to even greater heights.

The prosperity we enjoy today is the result of these wealth creating advances; however, not all ethnic groups experienced these leaps. Some remained in subsistence agriculture, others were hunters and gathers. Consequently, ethnic groups varied in the level of wealth they produced. To exploit these changes, societies needed to adopt new skills, values and knowledge. It required a cultural shift. However, many ethnic groups have not adopted the cultural components that exist in today’s knowledge economies.

The idea that cultural characteristics can determine income is highly controversial, given its potential misuse by racial supremacists and, predictably, researchers have been hesitant to enter this arena. Policy-makers and researchers have tended towards the safe. However, if we are too cautious, we may miss opportunities to help improve the welfare of the people that we are trying to protect. If academics and policy-makers are to create effective solutions, we must keep our eye on the goal – that is, to improve the material welfare of these groups.

Material poverty is the absence of material wealth, and there are big variations in the wealth produced. Different ethnic groups may populate the same territory but achieve different levels of economic prosperity. For example, Europeans settled in North America and Australasia, and achieved a much higher level of material prosperity than those living there before them. The pre-existing poverty could not have been a result of discrimination nor colonisation as the Europeans had not yet arrived.

Of course, this assumes that these ethnic groups desired material wealth. They may have been happy in their relative material poverty given the welfare gains from other aspects of their lives. This raises a possible criticism of this book in that its focus is on material wealth. Hence, it is important to make an important clarification. That is, although this book aims to reduce material poverty (for those who desire it), this book does not assume that material prosperity is the only form of welfare.

Nevertheless, material poverty is generally seen as an undesirable state and history reveals that ethnic groups vary in their ability to produce wealth. In 2010, Putterman and Weil constructed a matrix that linked a country’s economic development to the history of the population’s ancestors including their experience with agriculture.¹¹ They found that the ancestors of the existing population had an important determinant on income levels. This research has been supported by Easterly and Levine (2012) who revealed that a large population of European ancestry provides advantages for economic development.¹²

These findings are supported by recent research on genetic distance; that is the length of time that has passed since two populations shared a common ancestor.¹³ The research strongly suggests that economic development is affected by ethnic traits that have been transmitted across generations over the very long run. However, a problem comes in determining which traits are important, in particular are they biological traits or cultural? If biological, it returns us to the genetic/racial arguments raised at the beginning of the book.

The alternative is culture; however, cultural traits such as values and norms are much harder to measure from a long-term macroeconomic perspective. With this in mind, it is important to differentiate between culture, ethnicity and race. There are many definitions of race which commonly refer to people of common ancestry. Some definitions include a cultural aspect, but most focus on physical characteristics, that is those characteristics determined by biology/genetic forces. Defining race in terms of biology allows us to differentiate it from ethnicity which ‘is viewed as representing shared practices, beliefs and values linked to ‘nationality, common ancestry, and/or immigration experiences’.¹⁴

Lastly, culture is a man-made phenomenon that ‘represents ways of living that have been developed by a group of people to meet their biological, psychological and emotional needs. Transmitted inter-generationally, culture encompasses social norms, roles, beliefs, values and practices and serves to provide guidelines for the socialization of children and successful adult functioning.’¹⁵

There are many definitions of culture, but one of in...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of illustrations
• 1 Introduction
• 2 Assimilation, cultural superiority and poverty
• 3 What is the link between culture and economic systems?
• 4 What is the link between culture, parenting and children’s ability?
• 5 Culture, socio-economic status and educational outcomes
• 6 Neuroplasticity and ethnotheories
• 7 Human capital, cognitive skills and cultural change
• 8 Blurred lines: socio-economic status and ethnicity
• 9 What are the implications for policy?
• 10 Two case studies
• 11 Poverty vs welfare
• 12 Do we really want to solve this?
• Index