Posts Tagged ‘development’

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We’ve long known there is a strong correlation between growing up in poverty and low academic achievement. Thus, for example, children living in poverty tend to have lower scores on standardized tests, lower grades, and are less likely to graduate from high school or go on to college.

Now we’re learning that that there is a correlation between poverty and children’s actual brain development.

According to Mike Mariani, the results of studying the “neurocognitive profile” of socioeconomic status and the developing brain are startling. For example, according to one study, kids from poorer, less-educated families tended to have thinner subregions of the prefrontal cortex—a part of the brain strongly associated with executive functioning—than better-off kids. Moreover, according to the data from another study:

small increases in family income had a much larger impact on the brains of the poorest children than similar increases among wealthier children. And [Kimberly] Noble’s data also suggested that when a family falls below a certain basic level of income, brain growth drops off precipitously. Children from families making less than $25,000 suffered the most, with 6 percent less brain surface area than peers in families making $150,000 or more.

Noble is one of the pioneers in this area and, in order to go beyond correlation to causality, she’s now proposing a randomized controlled trial of giving some mothers a $333 monthly income supplement or others a $20 monthly income supplement.

I am all in favor of giving cash to members of poor households—as against, for example, taking over poor people’s lives by using brain science to promote more effective “executive function skills” such as “impulse control” and “mental flexibility” of the sort proposed by the Crittenton Women’s Union (pdf).

However, as I see it, there are two problems inherent in the way these new poverty-brain trials are proceeding.

First, the trial that Noble proposes is another instance of the kind of work we’re now seeing in development economics (associated especially with Abhijit Banerjee and Esther Duflo), which conducts experiments on poor people. One “treatment” group is assigned randomly to receive an intervention, and the other is randomized to receive the “control” experience, enabling the investigators to assess the impact of one intervention or another—in this case, on brain development. In other words, poor people are being used as human guinea pigs to conduct scientific experiments.

What’s the alternative? Set up programs, with the participation of poor people, to analyze the causes and consequences of poverty and identify changes that need to be made in the system in order to end existing poverty and prevent its recurrence in the future.

Second, the focus is on the brains of poor children, which in Noble’s language are “at much greater risk of not going through the paces of normal development to eventually become the three-pound wonder able to perform intellectual feats, whether composing symphonies or solving differential equations.”

What about the brains of rich children—why are they presumed to go through “the paces of normal development”? I’m thinking, for example, of the new psychological research on the “pathologies of the rich,” which involves studies of “social class as culture” and “sharing the marbles.” And, of course, there’s the infamous 2013 manslaughter trial of Ethan Couch, whose defense included a witness saying the teen was a product of “profoundly dysfunctional” parents who gave him too much and never taught him the consequences of his actions.

The issue here is not just the continued existence of obscene poverty, but also grotesque levels of inequality—which affect both poor and rich children, albeit in different ways. In my view, we need to be worried about an economic and social system that generates extreme levels of both poverty and inequality and that alters the brains of all children.

There’s nothing normal not just about the minds of children who are born into such a system, but the system itself.

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The Department of Political Economy at the University of Sydney has posted the text of the talk I delivered at Gleebooks, 19 October 2016, as part of a “Class Acts in Political Economy” roundtable with Katherine Gibson and Adam David Morton.

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To read National Public Radio’s [ht: ja] article on the latest World Bank report on Poverty and Shared Prosperity: Taking on Inequality, you’d think the problem of global poverty was well on the way to being solved.

Is that just wishful thinking?

In terms of the headline numbers, the author of the article is correct:

In 2013, fewer than 800 million people lived on less than $1.90 a day. That’s less than 11 percent of the global population. As recently as 1990, about 35 percent of all people lived in such extreme poverty.

That means about 1.1 billion people rose out of extreme poverty.

But, before we get too excited, there are 3 key issues to keep in mind.

First, the World Bank itself follows the presentation of the numbers with a note of caution:

Although this represented a noticeable decline, the poverty rate remains unacceptably high given the low standard of living implied by the $1.90-a-day threshold.

That’s right. The threshold is a miserly $1.90 a day, an update taking into account inflation of the previous limit of $1 a day. If they used anything more reasonable—say, an absolute level of $5 a day or, even better, a relative level of 50 percent of mean income—the level of global poverty would be much higher.*

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Second, while it’s never mentioned in the article, the actual focus on the World Bank report is inequality. And there the results are, at first glance, bewildering: global inequality has fallen while average within-country inequality is greater now than 25 years ago. But it can be easily explained: Rising incomes in China and India alone, given the size of their populations, have led to a reduction in between-country inequality. However, in many countries, the income share of the top income groups has been expanding—in the United States, of course, but also in Argentina, India, the Republic of Korea, Taiwan, and China. And in South Africa, the top income share roughly doubled over 20 years, to levels comparable to those observed in the United States!

Finally, we need to understand what is actually causing the reported declines in global poverty and inequality. The World Bank singles out five countries—Brazil, Cambodia, Mali, Peru, and Tanzania—as the best performers. And here the NPR article is just plain wrong. The policies the World Bank itself cites are the following “building blocks of success”:

prudent macroeconomic policies, strong growth, functioning labor markets, and coherent domestic policies focusing on safety nets, human capital, and infrastructure.

This is exactly what one would expect from the World Bank: more growth—in other words, business as usual—will solve the problems of poverty and inequality.

The Peruvian example (based on reading the World Bank report and the background research papers) is particularly instructive. The “remarkable” improvement in living conditions among the poor and bottom 40 percent mostly occurred through the labor market (which explains about three-quarters of the reduction in extreme poverty).

What does that mean? Extreme poverty in Peru declined because more people, men and women, joined the labor market. Some left rural areas and migrated to cities; others exited the informal sector and went to work for larger enterprises. In both cases, more Peruvians were forced to have the freedom to sell their ability to work to someone else and, as a result, received more cash income in the form of wages—and then, of course, could use those wages to purchase more commodities.

So, as far as the World Bank is concerned, more Adam Smith development—a faster growing wealth of the nation—was both a condition and consequence of expanding the labor market and reducing poverty. The World Bank’s much-vaunted “shared prosperity” is just another name for more markets and more people working to make profits for a tiny group of employers at the top.

That’s the key point the article missed and the reason the World Bank, in the report, is so keen on celebrating the progress toward achieving the goal of eliminating extreme poverty by 2030.

 

*In fact, in a World Bank research paper, Shaohua Chen and Martin Ravallion (pdf), compared absolute and relative measures and found “a simultaneous rise in the numbers of relatively poor, alongside the fall in absolute poverty.”

 

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Here’s the link to Adam Morton’s generous—and, in my view, perceptive—review of my book, Development and Globalization: A Marxian Class Analysis.

The main point I want to articulate is that the book is indispensable reading for class in the twofold sense that this phrase can be read. First, as indispensable reading for class in that key chapters in the book shape my classrooms on political economy across the span of undergraduate and postgraduate teaching and research. Second, as indispensable reading for class in delivering a Marxist social class analysis of planning, development and globalisation at a time when many in and beyond the academy are consciously engaged in expunging class as an aspect of radical political economy.

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More than 400 thousand Philadelphians live in poverty. The United States, even after the latest decline, still has more than 43 million men, women, and children below the poverty line. And nearly one half of the world’s population—more than 3 billion people—are poor (more than 1.3 billion of them in extreme poverty).

And yet the policy debate remains the same: how do we get poor people to get themselves out of the “culture of poverty”?

Not how do eliminate poverty? Or, alternatively, how do we create the economic and social institutions that don’t, on a regular and sustained basis, drive millions of people into and keep many of them in poverty?

Instead, what we get from Steve Volk [ht: ja] on Philadelphia, just like from Abhijit Banerjee and Esther Duflo (in their book Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty) for the Third World, is a focus on the pathologies of the poor and the strategies that can be tested and implemented so that poor people can find their way out of poverty.

Now, I’ll admit, Volk writes (of Mattie McQueen and other poor Philadelphians) with more heart than Banerjee and Duflo seem to be able to muster. But it’s the same basic idea—that there’s something enduring about poverty, which pertains to poor people and “their” culture and which needs to be disrupted with the right sort of economic interventions.

In Volk’s case, the problem is “generational poverty”—such that poverty is passed down through two or more generations. And the solution is the “two-gen” strategy, such as the HIPPY (Home Instruction for Parents of Preschool Youngsters) program Bill Clinton celebrated at the Democratic National Convention.

In practical terms, the strategy means providing educational support to kids while offering the full range of housing, social, mental-health and economic services to their parents. “In hindsight, this way of approaching generational poverty looks kind of obvious,” says Susan Landry, director and founder of the Children’s Learning Institute in Houston, Texas. “Everyone wants to help children. What the two-gen strategy recognizes is that children exist in families.”

Educating children without stabilizing the home, says Landry, puts kids in an impossible position — requiring them to lead their parents. Making a child’s home safer and less stressful yields huge benefits in the child’s ability to learn. And two-gen strategies are gaining support among conservatives and progressives alike. Republican governors like Bill Haslam of Tennessee and Gary Herbert of Utah champion the two-gen approach for imparting a sense of responsibility to parents and streamlining government — parking disparate social agencies under one roof. Paul Ryan, Republican Speaker of the House, recently told NPR that helping children requires helping their families — a truism of two-gen thinking.

What is true of all such programs—the ones Volk writes about as well as those that are tested through randomized control trials by Banerjee and Duflo—is they focus on improving individual decisions and household environments, not on the history and dynamics of larger economic and social structures that create and perpetuate mass poverty. In other words, it’s all about individual, not social, responsibility and outcomes. The goal, it seems, is to change individual decisions and promote the mobility of a select few up and out of poverty—and, by the same token, to avoid an analysis of the kinds of changes that need to be made in the economy in order to end existing poverty and prevent its recurrence in the future.*

The problem, as I see it, is not a culture of poverty. It’s a culture of poor economics.

 

*I am reminded of an early World Development Report (unfortunately, I don’t remember the exact year) in which it was shown that a redistribution of productive assets (such as land reform) was much more likely to end poverty than other reforms (such as universal schooling). However, the authors of the report argued, land reform often faces social and political opposition, especially from landlords, and therefore needs to be set aside since it is an unrealistic strategy.

Consider the irony: Bernie Sanders was seated alongside Bolivian President Evo Morales as he participated in a conference on social, economic, and environmental issues hosted by the Pontifical Academy of Social Sciences. Meanwhile, in news reports concerning Sanders’s visit to the Vatican, I learned that Jeffrey Sachs is one of the democratic socialists’s foreign policy advisers.

Why the irony? Because Sachs, aka Dr. Shock, was responsible not only for the economic and social disasters his version of shock therapy created in Poland and Russia, but also—at least indirectly—for the rise to prominence and ultimately the election of Morales.

As Benjamin Kohl and Linda Farthing explain, in challenging Sachs’s 2012 campaign for World Bank president,

What Sachs fails to mention, however, is the clear link between the SAP [structural adjustment program] in Bolivia and the 1980s coca and cocaine boom. Thousands of miners, peasants, and factory workers who lost their livelihoods because of ‘stabilization’ fled to the agricultural frontier to sow coca, the one crop that had a guaranteed market. The government implicitly allowed the laundering of drug money through offering certificates of deposit in US dollars at the central bank, no questions asked. The influx of money from the drug trade, perhaps the best expression of what capitalism can do in an unregulated market, was responsible for a substantial part of the economic growth for which Sachs wishes to claim credit.

We show in Impasse in Bolivia that the neoliberal ‘stabilization’ plan that Sachs is so proud of set the stage for 15 years of slow economic growth and increasing opposition to neoliberalism. Bolivia, promoted by the World Bank and IMF as a neoliberal success story in the 1980s and 1990s, morphed into the poster child of the anti-globalization movement when the people of Cochabamba rose up in the ‘Water War’ of 2000. This set in motion a period of unrest that led to the resignation of two presidents before a leader committed to the interests of the poor majority was elected in 2005.

More recently, Sachs has been criticized for the exaggerated claims he has made concerning his use of a handful of African villages as test cases for his Millennium Villages Project.

There’s no doubt that, during the past couple of months, Sachs has been on the mark—in his defense of Sanders and his attack on the Clinton war machine.

But we shouldn’t forget Sachs’s checkered history as an imperious, globe-trotting development economist or, for that matter, his enormous ego,

which exposes almost anything he does to the suspicion that he’s in it mostly for the attention. But while his work in Russia, though it drew attention, was mostly destructive – something he still can’t admit to – his concerns today are a lot more admirable. His criticisms of American warmongering and Western indifference to the poverty of a billion or two of our fellow humans are mostly on the side of the angels. Maybe the best summing up of the latest incarnation of Jeffrey Sachs comes from David Ellerman: “I hope he gets what he wants, but that he doesn’t get any credit for it.”

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Today’s announcement that Angus Deaton was awarded the Nobel Prize in Economic Sciences was greeted in the usual fashion: plenty of versions of “a brilliant selection” (Tyler Cowen) and a few of the usual criticisms that economics is not really a science (Joris Luyendijk).

What I find interesting is that, like last year, the prize is given to a thoroughly mainstream economist—but Deaton’s work can be read as cutting against the grain of much of what has passed for mainstream economics over the years. Let me give a few examples:

First, Deaton spent a great deal of time trying to figure out how, at the microeconomic level, consumers distribute their spending among different goods. Basically, Deaton was telling his mainstream colleagues, “you just can’t assume demand curves are downward-sloping, for individuals and markets, and that actual consumer behavior is or is not consistent with the postulates of neoclassical utility-maximization, without actually measuring how consumers respond to changes in prices.”

Deaton’s work, at the macroeconomic level, was similar: he cast doubt on the existing mainstream theories concerning the relationship between consumption and income (based on representative-agent models) and suggested, once again, that it’s necessary to study how different consumers—some with falling incomes, others with rising incomes—actually respond to changes in incomes.

Third, Deaton used his work on demand and consumption to challenge facile models based on income per capita and exchange-rate-calculated comparisons of poverty across nations. He pioneered a consumption-based approach, based on cross-sectional surveys to determine actual consumption expenditures and levels of well-being, especially in Third World countries.

There’s no doubt that, in the end, Deaton’s work in challenging many of the existing theoretical and empirical models within mainstream economics—in the areas of microeconomics, macroeconomics, and development economics—were themselves firmly ensconced within and contributed to the further development of mainstream economics.

But the mainstream nature of that work has also permitted him to intervene in other debates, for example, concerning the effectivity of foreign aid (which, he argues, mostly helps keep nonpopular governments in power and does little to actually eliminate poverty), the role of poor health (which, as he sees it, is a result, not a cause, of poverty), and the current fascination with randomized trials (which fail to account for the causes of positive outcomes and, as a result, can’t be generalized to other problems and situations).

And, in the one previous mention of him on this blog, to sound a warning about growing inequality in the United States and other advanced countries:

The distribution of wealth is more unequal than the distribution of income, and very high incomes will eventually pupate into very large fortunes, ultimately leading to a hereditary dystopia of idle rich.