Galbraith on Mass Poverty
John Kenneth Galbraith is well known for his analysis of affluent societies, especially of the United States (The Affluent Society, 1958). However, he made an inquiry into mass poverty in The Nature of Mass Poverty in 1979.
He meant by mass poverty a phenomenon mainly in rural societies. In his view, in the early stages of development of the developed countries of today and in the present developing countries, the majority of the population lived and are living in rural areas under a minimum standard of living (life of subsistence). They are accustomed to that state of life and have no pronounced wish to improve the conditions of their life, Galbraith calls that state of mind “accommodation to poverty”. If people are accommodated to the minimum standard of living, even if there is some economic surplus, they may consume it in drinking alcohol or in consumption of luxury goods, or they spend their time doing nothing useful, or consuming the economic surplus in increasing the population. Thus, people’s standard of living remains as it is without any improvement whatever. Such a state of things Galbraith called equilibrium of poverty.Economists often find causes of poverty in underdeveloped countries in a shortage of capital, a lack of technology and knowledge, but he thinks they are results of poverty, not causes. Mass poverty may arise from a low productivity of the economy. The most fundamental factor to preserve mass poverty is “accommodation to poverty”. Therefore, an economy with mass poverty needs to break the accommodation in order to start improving the living conditions of common people. According to Galbraith, education of people is certainly necessary to break the accommodation. However, it takes time to instil in people’s minds a wish to abandon their accustomed ways of life by general education. An efficient way to break accommodation is to find some leading persons with a positive mind and help them to get out of poverty.
Their example will influence other members in the community. Other people in the community will have a wish to emulate them. They will want to get better living conditions and catch up with them.After breaking the accommodation to poverty of people, Galbraith argues, effective ways to improve the standard of living of people are industrialization and emigration to foreign countries. Industrialization involves the process of movement of a part of the population from rural areas to towns. This transfer of population from agriculture to industry raises the productivity of the economy as a whole, because on the one hand it raises productivity in agriculture in which diminishing returns dominate and on the other hand it improves productivity in industry under increasing returns to scale. A rise in productivity increases the possibility of improving the standard of living of the labouring classes. Emigration of a part of the population from rural areas to foreign countries also has the effect of raising productivity in the agriculture of the country because in agriculture decreasing returns to scale operate.
Those who emigrate abroad will make up for the shortage of labour of the recipient countries where they settle down. The country that receives the emigrants can increase its product by adding a new labour force to the existing one. Galbraith says that the European countries benefited much from emigration in their past history. The representative examples are England, Scotland and Ireland. England developed its industries which absorbed many labourers from rural areas, but at the same time it sent out many emigrants to America, Australia, New Zealand, Canada, and so on. Ireland could not have survived if it had not reduced its population by sending out many of the nationals during the eighteenth and nineteenth centuries. England could realize a standard of living of its own people while it developed the industries in the country. The double benefits pointed out by Galbraith are apparent if we take into consideration that the European countries and the countries where the European emigrants settled are both the most developed and richest countries that are enjoying the highest standard of living in the world today.