Monday 11 March 2013

The problem is incomes, not prices

Fuel poverty is a term with which we’ve all become increasingly familiar, but I’ve always had a nagging doubt about whether “poverty” is really the right word.  For those on low incomes, it’s accurate enough; but any definition based solely on the relationship between cost and income is always likely to include some for whom the term “poverty” is a misnomer.  After all, draughty old mansions can be expensive to heat as well.

A couple of weeks ago, I heard the term “transport poverty” being used to describe a situation where people spend a large proportion of the disposable income on running their car.  Again, it may be accurate for some – but I’m sure that Rolls-Royces can cost a lot to run as well.
Last week, Peter Hain referred to “food poverty”.  Again, I don’t doubt that some people, particularly the poorest, spend a disproportionate amount of their disposable income on basic foodstuffs.  It would be stretching a point to suggest that better-off people with expensive tastes might also spend a high proportion of their income on food, but it’s at least theoretically possible.
There’s a common thread in all of these types of poverty, though; or rather there is a common thread in the way they are described.  They are invariably portrayed as being price problems – the price of fuel, the price of running a car, the price of food – with the politicians demanding action on prices in response.  But the problem isn’t really about prices at all; it’s about incomes.
Fuel prices in particular are on an inexorable upward trend.  There’ll be variations in both directions en route; but the overall direction over time is going only one way.  And as recent events have demonstrated, demands that food should be both cheap and wholesome are probably incompatible.
I want to lift people out of poverty – all types of poverty – as much as anyone else; I just don’t believe that attempting to control prices in a market economy is ever going to be an effective way of doing that.  The distribution of income between the richest and the poorest is excessive and the gap is becoming larger.  Accumulation of resources in fewer hands; redistribution from the have-nots to the haves - that’s the inevitable outcome of free market capitalism.
Correcting that, and giving people fair access to resources, involves redistributing income, not controlling prices.  I don’t hear many politicians even suggesting that; it’s far too easy to criticise others over prices.  But if we really want to tackle poverty, it has to involve redistribution of income and resources.  Anything else is just empty rhetoric.


Britnot said...

As usual John you have hit the nail right on the head. The UK is one of the most unequal countries in the industrialised world in terms of income and wealth distribution. We still have a rigid class structure which precludes most from the benefits of being part of the 6th (or thereabouts) richest economy in the world.

Until people in Wales see through the propaganda and realise they are being exploited by the parasitic class at the top of British society, I fear nothing will change and indeed the situation will worsen. Let us hope the majority see the light soon!

Anonymous said...

Child poverty is a familiar phrase used, but is the child in poverty or is it the family in poverty! At one time people used to say "if you can't afford it, don't buy it" same could be said about children. Once upon a time the first child did not allow the family to have child benefit pause for thought!

Glyndo said...

"xxxx"poverty, is where the "xxxx" is the drum that someone particularly bangs. There's just poverty.
We've had this discussion before John. (And Britnot) no matter how much you redistribute the wealth, there will always be poor people, because poverty is a relative thing. If I've got a BMW but everyone else has a Roller, then I'm poor.

John Dixon said...

"Poverty is a relative thing"

Completely agree, although government agencies use two measures; one relative, the other 'absolute'. However, even the 'absolute' can only ever be such within the UK; taken on a global scale, what passes for 'poverty' in the UK looks like affluance elsewhere.

It's part of why I think the word 'poverty' is a bad work to use to describe much of what passes for 'poverty' in the UK. What most of those using the word are really referring to is 'inequality', but they're afraid to use the word, not least because 'inequality' is something that they really have no intention of tackling in any serious way.