Absolute vs relative poverty

There's an interesting study that illustrates the importance of relative social positioning. A person is asked to choose between two possible scenarios. In one scenario, the person will earn a salary of $100,000 a year while everyone else earns $90,000. In the other scenario, the person will earn $110,000 a year, while everyone else earns $200,000. Now, if humans were simply interested in accumulating material possessions for the joy of having them and were indifferent to relative positioning, they would want to earn the larger salary, since it would enable them to buy more goods. But in fact, when asked to choose, a substantial portion of people select the lower salary. While they will be able to buy fewer goods, they will end up with more than those around them, making them feel more important—a feeling that apparently matters more to them than the pleasure of additional consumption. Or, as Karl Marx put it, "A house may be large or small; as long as the surrounding houses are equally small, it satisfies all social demands for a dwelling. But ifa palace rises beside the little house, the little house shrinks into a hut."…….[I]f one's income were to increase while everyone else's stayed the same, that would generally lead to a higher level of satisfaction or sense of well-being. Again, what matters is relative position. This would seem to offer something of a rebuke to the notion that making material acquisitiveness the central organizing principle of society—as capitalism, and particularly the new capitalism, does—is serving our interests well. "Will raising the incomes of all increase the happiness of all?" asks Easterlin. "The answer to this question can now be given with somewhat greater assurance than twenty years ago. … It is no." Easterlin argues that the increased happiness we feel from higher incomes "is offset by a decrease in happiness due to the rise in the average, yielding, on balance, no net growth in well-being." All this suggests that the feast of material consumption going on in North America today, the endless all-you-can-eat buffet at which we are gorging ourselves, may not actually be delivering us to the state of nirvana we expected.

- Linda McQuaig, All You Can Eat, citing Frank, Luxury Fever, pp. 128—129

Misc, to-do

  • 'In primitive societies, people can accumulate only as much stuff as they can physically gather and hold on to. It's only in "advanced" societies that the state provides the means to socioeconomic domination by a tiny minority. "The poverty of our century is unlike that of any other," the writer John Berger said about the 20th century, though he might equally have said it of this one: "It is not, as poverty was before, the result of natural scarcity, but of a set of priorities imposed upon the rest of the world by the rich."'
    • Amia Srinivasan, "Dependents of the State"
  • what is the "cause" of poverty? it's always a policy decision, except when there's really not enough to go around. any other "cause" is only true when assuming some policy or other.
    • seem my comment thread here: https://www.quora.com/Is-poverty-genetic/answer/Ernie-Bornheimer
    • We have this debate about poverty's "causes" as if economic institutions do not exist, as if we are pondering over poverty's causes in some kind of abstract ether denuded of any of the economic particularities of our time and place. Needless to say, this pretension is as useless as it is deluded.
      • Pundits never actually debate about what "causes" poverty in some universalist sense. They debate about what conditions are associated with high poverty in some specific economic system, without every clarifying that they are doing so and indeed probably not even realizing they are doing so themselves.
      • What "Causes" Poverty? | Demos - http://www.demos.org/blog/3/13/15/what-causes-poverty



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