Poverty is a socioeconomic condition in which an individual or even an entire community lacks enough resources to meet their basic needs. This can mean not having enough to eat, proper clothing, or safe shelter to live. There are severe cases in which an individual lacks the absolute essentials for survival. These are called absolute or extreme poverty. It is important to note that there are different context-dependent definitions and measures of poverty.
Nonetheless, aside from the varied definitions and measures, the different theories of poverty provide different perspectives and frameworks not only for understanding the causes of poverty but also for developing and implementing poverty alleviation strategies. Each theory explicates particular causal factors and provides nuanced explanations behind the inability of individuals or communities to attain and sustain a minimum standard of living.
The Two Major Schools of Thought of Poverty
There are two major theories or schools of thought explaining the causes of poverty. These are the individualistic theories and structural theories. The individualistic perspective attributes poverty to the personal failings or limitations of impoverished individuals while the structural perspective posits that systemic factors, such as socioeconomic inequalities and institutional barriers, are the root causes of poverty.
1. Individualistic Theories of Poverty
Nineteenth-century sociologist and biologist Herbert Spencer, in his 1851 book “Social Statics: Or The Conditions Essential to Human Happiness,” argued that poverty is a consequence of individual moral failings. Spencer further contended that impoverished individuals are unworthy of assistance because they are unwilling to seek employment. This view became one of the first examples of individualistic theories of poverty.
The individualistic theories of poverty generally and collectively consider and frame poverty as a negative consequence of specific deficiencies or shortcomings of individuals. Take note that there are more specific theories of the causes of poverty under the greater individualistic school of thought. These include the biogenic theory of poverty and inequality, the human capital theory, and the cultural theory of poverty.
2. Structural Theories of Poverty
Structural functionalism is a sociological framework that conceptualizes society as a complex system of interconnected parts. This perspective posits that these parts function together to maintain social order and stability. Hence, by examining the relationships between various social institutions, structural functionalism seeks to explain why a society or a particular element or situation in a society functions the way it does
This sociological framework is also the basis of the structural theories of poverty and the concept of structural poverty. They collectively argue that macro-level factors and conditions like demographic vulnerabilities, labor market opportunities, and resource distribution efficiency can determine the susceptibility of individuals and communities to poverty. There are more specific theories under the structural perspective of poverty.
Individualistic Perspective vs Structural Perspective
The Individualistic Theories of Poverty
1. Biogenic Theory
The book “The Bell Curve: Intelligence and Class Structure in American Life” by psychologist Richard J. Herrnstein and political scientist Charles Murray provides the foundational contentions related to the biogenic theory of poverty and inequality. It argued that intelligence can better predict the financial income and career performance of an individual.
Furthermore, as explained by Herrnstein and Murray, the primary force that creates and divides modern social classes is not family background but inherited cognitive ability. Both believe that the upper class and the lower class represent a distinction between the class of highly intelligent people and the class of people who have lower intelligence levels.
The biogenetic theory of poverty and inequality essentially argues that nature determines the socioeconomic status of an individual because intelligence is innate and inherited. People with higher levels of intelligence are destined to become affluent while those with inferior levels of intelligence are said to be fated to live impoverished lives.
2. Cultural Theory
The cultural theory of poverty is similar to the biogenic theory. Both blame the prevalence of socioeconomic inequality on the deficiencies of impoverished individuals. However, if biogenic theory argues that poor people lack intelligence, the cultural theory claims that lack the drive or motivation to achieve because of their negative values.
American anthropologist Oscar Lewis expounded the theory from the contention of Spencer. It is also similar to the flawed character theory of poverty by economist Bradley R. Schiller. The theory essentially explains that the values and mindsets of an impoverished individual have a central role in perpetuating his or her impoverished condition.
The aforementioned also tries to explain why people in impoverished communities remain poor despite the existence and persistence of government-ran poverty alleviation programs. An interesting aspect of the cultural theory of poverty is that it affects not only a particular individual but also the generations preceding and succeeding him or her.
Lewis noted in his 1969 book “Culture of Poverty” that the subculture of poor people has mechanisms that perpetuate poverty. He noted that children who are growing up in impoverished households and communities will internalize feelings of desperation or dependence. This will make them unable to see and grab opportunities later in life.
Cultural theory contends that poverty is a result of negative and counterproductive cultural values passed down through generations. The reason why it endures is that it creates a cycle. The theory also argues that affluent individuals or well-off communities have cultures with sets of values and mindsets that are different from their impoverished counterparts.
2. Human Capital Theory
Human capital refers to the economic value of the collection of different competencies or skills, knowledge, experience, and abilities individuals bring to the workplace. It specifically includes intangible assets like education, training, health, soft skills, and even values and principles that people use to perform labor and produce economic value.
Nevertheless, as one of the individualistic theories of the causes of poverty, the human capital theory provides a model for drawing the relationship between the decision of an individual to invest in education or training and the pattern of his or her lifetime earnings. The different levels of investment in human capital can also determine different levels of earnings.
The concept can also draw the relationship between age and earnings. Youngsters are more likely to become poor because they have not yet accumulated enough human capital. Much older ones are also likely to become poor either because they are too late to acquire human capital or are not equipped with time-relevant set of competencies.
The Structural Theories of Poverty
1. General Structural Theories
Political science professor David Brady argues that poverty is not simply a result of individual deficiencies or shortcomings. This socioeconomic condition tends to be prevalent in vulnerable environments and troubled labor market circumstances. Hence, the greater the number of people living under these circumstances, the higher the prevalence of poverty.
Brady specifically explains that poverty is largely influenced by systemic and structural factors within society. He highlights the welfare state as a crucial mechanism for addressing economic insecurity and promoting equity. Brady also underscores that effective poverty alleviation requires a societal commitment to collective action.
Sociology professor Edward Royce also argues that in the United States, despite having one of the largest and most advanced economies in the world, poverty remains rampant not because of the individual deficiencies or shortcomings of the poor but because of the failings of the American social system and the specific American political economy.
3. Restricted Opportunity Theory
The restricted opportunity theory explains that poverty results from circumstances that are beyond the control of an impoverished individual. These circumstances generally center on the absence of opportunities or the lack of access to such opportunities.
Economist Bradley Schiller first introduced the restricted opportunity theory as one of the three theories of the causes of poverty—along with the flawed character theory and the Big Brother theory—in the book “The Economics of Poverty and Discrimination” first published in 1972.
Central to the theory is an argument that poor people lack suitable and relatively abundant access to economic opportunities. They cannot avoid poverty or would not be able to get out of their impoverished conditions unless their economic opportunities improve.
The restricted opportunity theory explains that poverty is the lack of opportunity. Opportunities like access to education, health care, housing, safe communities, and public services are factors that can determine the socioeconomic status of an individual.
3. Marxism or Marxian Theory
The works of German economist and sociologist Karl Marx provided the fundamental basis for the body of ideas called Marxism. These ideas generally represent a criticism of capitalism and the free market. Several Marxists have argued that poverty and socioeconomic inequality are inseparable components of a capitalistic economic system.
It is worth noting that the separate works of Brady and Royce also underscored and discussed the role of inequality in perpetuating poverty. Both explained that modern social structures promote an imbalance of power and unequal distribution of resources. Marxism presents itself as another theory under the general structural theories of poverty.
Marxian theory asserts that the cause of poverty is intentional due to the class struggle between the capitalists or owners of the means of production and the laborers. It contends that capitalists intentionally exploit their laborers and try to prevent them from gaining socioeconomic advancements as much as possible to maintain control.
FURTHER READINGS AND REFERENCES
- Becker, G. S. 1993 Human Capital: A Theoretical and Empirical Analysis, With Special Reference to Education. 3rd ed. Chicago: University of Chicago Press. ISBN: 978-0-226-04120-9
- Brady, D. 2009. “Structural Theory and Poverty.” Rich Democracies, Poor People: How Politics Explain Poverty. Oxford: Oxford University Press. ISBN: 978-0-19-538587-8
- Herrnstein, R. J. and Murray, C. 1994. The Bell Curve: Intelligence and Class Structure in American Life. New York: Free Press. ISBN: 0-02-914673-9
- Lewis, O. 1969. “Culture of Poverty.” In D. P. Moynihan, On Understanding Poverty: Perspectives from the Social Sciences, New York: Basic Books
- Royce, E. 2015. Poverty and Power: The Problem of Structural Inequality. 2nd ed. Lanham: Rowman & Littlefield. ISBN: 978-1-4422-3808-4
- Schiller, B. 1972. The Economics of Poverty and Discrimination. 1st ed. New Jersey: Prentice-Halle
- Schultz, T. W. 1961. “Investment in Human Capital.” The American Economic Review. 51(1): 1-17. JSTOR: 1818907
- Spencer, H. 1851. Social Statics: Or The Conditions Essential to Human Happiness, and the First of them Developed. London: John Chapman