Cooking the Books 1: The Poverty Line

Back in the days when the Tories were openly and deliberately the nasty party John Moore, Thatcher’s Secretary of State for Social Security (so-called), declared that poverty no longer existed in Britain. That was in a speech in May 1988 (the same month that Thatcher declared that there was no such thing as society), published the following year as a pamphlet, The End of the Line for Poverty.

What he meant was that destitution (people without enough to buy food, shelter and other necessities to survive) had disappeared thanks to handouts from the state. He rejected any definition of poverty as relative as an invention of those who wanted to “call Western capitalism a failure”.

Now the Tory Party has abandoned this approach and has embraced the view that poverty is a relative concept, measured in relation “to prevailing social norms which change over time” (www.socialjustice challenge.com/uploads/tx_ev3evnews/SJPG_Clark_brief_final.pdf).

Poverty in the EU, and so in Britain, is officially measured in relation, not to changing views as to what are “necessities”, but to the living standards of the general population. The median take-home income including state benefits for each type of household (single, couples, couples with children, etc) is calculated on the basis that this is the income level at which there are just as many below as above it (about £330 a week, according to Daniel Finkelstein in the Times of 22 November, or about £17,000 a year for the average household). The poverty line is defined as 60 percent of this.

This is just one definition, and a rather arbitrary one (it used to be defined as 50 percent), and other countries such as the US have a different one, but it’s an attempt to measure how many have significantly less income than the other members of society.

It does lay itself open to Moore’s criticism that it means that poverty will never be abolished or, to be absolutely precise, would only be in the highly unlikely event that there would be no households with an income of more than 40 percent above the (moving) median, i.e.,today, no more than about £24,000 a year for the average household.

To prepare their U-turn, the Tories got one of their MPs, Greg Clark, to analyse the statistics on poverty in Britain. He made an interesting discovery: that a large number of those classified as poor fell just below the 60 percent level; which meant that “poverty” could be reduced by increasing their income just enough to move them from 59 percent to 61 percent. He claimed that this was all the Labour government had done since 1997.

Socialists are not committed to an EU-type definition of poverty. We don’t need this to show capitalism’s failure to meet human needs adequately. While accepting that what are “necessities” is historically and socially determined and so varies over time and between (and even within) different countries, we define poverty, not in relation to people’s consumption (how much food, clothing, shelter and the like they can buy) but in relation to the means of production (whether or not they own any means for producing wealth).

The vast majority of people in the developed capitalist parts of the world are propertyless in the sense of not owning any means of production. The only productive resource they possess is their own ability to work, their working skills, their labour-power. They are thus poor in terms of ownership of the means of production, irrespective of how much they are paid and of how many personal possessions they may have. The line that divides the capitalist class from the working class, that’s the real poverty line.