It’s a common misconception in public discourse that the global poor are trapped in poverty because of globalization. We frequently hear things from our public leaders about how markets are crushing the poor. “The reality is that the poor aren’t dominated by markets. They are excluded from them.” says Michael Matheson Miller in an article for The Stream.
Miller hits on four different problems and misconceptions of how international economic development is currently addressed. He starts out by explaining how the current system benefits the wealthy and well-connected.
Many of the powerful and wealthy don’t have an economic incentive to build institutions of justice like clear title to land or broad access to the formal economy. They are doing well under the status quo and many of them are actually benefiting from the current situation through connections, access to special privileges, bribes and sweetheart deals on things like mineral rights.
Miller then discusses the problem of becoming fixated on the bugbear of “unfettered capitalism” and later gives examples of how populist policies and rhetoric distract us from building a stable and flourishing economy
India, for example, provides up to 100 days of paid labor for the poorest, which makes the state look benevolent. But if instead the government built institutions of justice, if they didn’t suffocate the poor under corruption and cronyism, then the government wouldn’t need to offer the subsidy. The poor would be able to find work that paid better, and they would have the dignity of knowing they were taking care of their families, not dependent on the benevolence of the state.
The last misconception of the current way of thinking about economic development is the idea that charity, and not business, is the solution to poverty.
Charity and concern for the poor is essential. There will always be poverty and human need, and, as Benedict XVI wrote in Deus Caritas Est, this requires a response of love. The state cannot solve all our problems. Neither can economic development alone. There will always be the need for human love and care for the widow and the orphan. But at the same time, for the majority of the world’s poor, the long-term problem is they are excluded from the institutions of justice that would enable them to create prosperity in their own families and communities.
You can read Miller’s full article on The Stream here.