The Economics Book

140

THE POOR

ARE UNLUCKY,

NOT BAD

THE POVERTY PROBLEM

I

n high-income countries

governments often account for

30–50 percent of spending in

the economy. About half of this

consists of “social transfers,” or

welfare spending. In historical

terms such high social spending is

a comparatively new development,

dating from the 1930s and 40s.

Welfare spending has a long

history. In the 16th century

England’s Poor Law assumed there

were three types of poor people: the

deserving poor (the old, the young,

and the sick), the deserving

unemployed (those willing to work

but unable to find employment), and

the undeserving poor (beggars). The

first two groups were given food

and money donated by local people,

but the third group were treated as

criminals. With industrialization

the view of the poor changed, and

by the 18th century many people

thought that the poor had only

themselves to blame. British

IN CONTEXT

FOCUS

Society and the economy

KEY THINKERS

John Stuart Mill (1806–73)

Amartya Sen (1933– )

BEFORE

1879 US economist Henry

George publishes Progress

and Poverty, a huge bestseller

that called for a land tax to

alleviate poverty.

1890s Charles Booth and

Seebohm Rowntree conduct

poverty surveys in the UK.

AFTER

1958 US economist John

Kenneth Galbraith draws

attention to poverty in his

book The Affluent Society.

1973 Indian economist

Amartya Sen proposes a

new poverty index.

2012 The World Bank

defines extreme poverty

as an income of less than

$1 a day.

Most sources of poverty are outside a person’s control.

The poor are unlucky, not bad.

In many countries

education must

be paid for, and

the poor cannot

afford it.

This leads to

poor job

prospects

and bad health.

The poor

have no

private

property.