Poverty is a fundamental aspect of the market economy. This assertion is frightening if true, and seems to be at the core of all radical critiques of capitalism. Are the problems of poverty systemic, a feature of the economic system in which we live, or, are they the result of bad decisions, easily corrected without real systemic change.
In order for markets to operate, prices must be set. The common understanding of how prices are set is via the law of supply and demand. The assumptions outlined in this system appear simple to us, in that we experience them every day. We even utilize them ourselves in a rudimentary way when we sell things at a garage sale, or post concert tickets on Craigslist. The need for an item as well as its relative scarcity work together to generate a price that seems fair to all parties involved.
Scarcity plays a large part in this. The relative levels of scarcity on a given day and in a given market are one of the factors that allow items to be sold above their cost of production. This is one of the ways profit is generated, as the relative advantage of a given capitalist can be used to sell objects at a price higher than its value. In short nobody buys sand at a beach.
In this way, a segment of the population must go without in order for the market mechanism to operate. Scarcity, and its human consequence poverty, are a requirement of functioning capitalist markets. How can wages be set if there is not a group of people looking for work. Who would pay for food if everyone had enough to eat.
In this sense, scarcity is manufactured to allow markets to operate. It does not exist in an absolute sense. If we can look beyond the economic system in which we live, poverty is not a question of scarcity, but rather a problem of the distribution of abundant resources.
The answers to these questions seem simple enough, yet solutions prove remarkably difficult. The slogan of the World Social Forum "Another World is Possible" comes to mind, however the world around us works to make imagining this world as difficult as possible.
Nice job again mon ami.
ReplyDeleteIt is remarkable how concise you manage to be in describing such a massive, fundamental problem with our current system. I tend to be much more... exhaustive when I write, which is not as effective as something like this.
When something like poverty is taken as a given, which, as you point out, it is in capitalism, people accept it. They either ignore it as something which is bound to happen, and brush off those who live in it as lazy, or deserving of their own situation. This is a dangerous mentality, especially as the inequality in this world is growing at a rapid pace, meaning more and more of us will soon be living in poverty also. If anything systematic is really going to change, people need to reject the idea that poverty is inevitable, and work to create a situation where we can all co-exist and be happy, healthy, and productive.
What a glorious day that will be. I just don’t want to have to wait another 2 years for it.