Theology and Economics: Two Kinds of Poverty

Yesterday I wrote:

Prosperity is about the amount of wealth and resources that can be generated and sustained over a lengthy period of time. Prosperity comes from the dynamic interplay between a set of human resources, values and social institutions.

Coming from a biblical understanding that God wants all of his people to participate in creation stewardship and that there are to be no poor among us, how do we bring people who are not living in prosperously into prosperity? That is my overarching question in these closing posts.

It is important to distinguish between two different ways of understanding poverty: Absolute poverty and relative poverty. Absolute poverty is the absolute minimum that people need to survive from day to day. Theoretically, the poverty threshold would not change from nation to nation or place in time. If everyone in a population lived at the absolute poverty level and we doubled their wealth we would have eliminated poverty.

Relative poverty is based on a statistical distribution. Theoretically, we could place the amount of wealth each person or family has on a continuum. Then we decide that people who are below some percentage cutoff line on the continuum (5%? 10%? 20%?) are in poverty. The only way poverty is eliminated here is when everybody makes exactly the same amount of wealth; otherwise there will always be someone who is relatively poorer than others.

Most entities that measure poverty use neither of these measures when they talk about poverty. Since human beings are more than animals, subsistence is not considered adequate. Some level of wealth is deemed necessary for a person to have not only adequate food, clothing and shelter, but education, healthcare and other quality of life enhancements. An amount of wealth is agreed upon that is believed to provide for this minimum standard of existence. Therefore the percentage of people who live below this threshold could expand or contract. Conceivably poverty could be eliminated under such a standard. However, the reality is that this perception of a minimal standard of existence tends to rise as the overall wealth of a culture rises. There is also the idea by some that there should not be a great divergence between the top tier and bottom tier of wealth but just what the balance should be often proves illusive.

Last December the Economist had an article that is a wonderful case study in relative poverty called The Mountain Man and the Surgeon. It compares the lives of Enos Banks from Eastern Kentucky and Mbwebwe Kabamba from the Democratic Republic of Congo.

When Americans hear the words “poor” and “white”, they think of someone like Mr Banks. He has half a dozen cars in varying states of disrepair parked outside his trailer, car-parts everywhere and a pile of crushed Pepsi cans below his porch.

He [Enos Banks] “draws” $521 a month in supplemental security income (a form of cash assistance for the elderly, poor and disabled). He laments that the authorities deduct $67 a month because he won $3,600 on the slot machines. Why, he asks, won't they take account of all the money he has lost gambling? It is a fair question. If middle-class America had this problem, accountants would surely find a way round it. Mr Banks also complains that he cannot draw food stamps. In order to qualify, he would have to sell his truck, which he cannot bear to part with. Mr Banks would probably be surprised to hear that, thousands of miles away in central Africa, there lives a prominent surgeon whose monthly income is roughly the same as his. Mbwebwe Kabamba is the head of the emergency department at the main public hospital in Kinshasa, the capital of the Democratic Republic of Congo. After 28 years as a doctor, his salary is only $250 a month, but by operating on private patients after hours, he ekes it out to $600 or $700.

Given the lower cost of living in Congo, one might guess that Dr Kabamba is better off than Mr Banks. But the doctor has to support an extended family of 12, whereas Mr Banks's ex-wife and three sons claim public assistance. Indeed, the reason Mr Banks split up from his wife, he says, is because they can draw more benefits separately. She still lives in the trailer next door.

Why juxtapose the lives of a poor man in a rich country and a relatively well-off man in a poor one? The exercise is useful for two reasons. First, it puts the rich world's wealth into context. A Congolese doctor, a man most other Congolese would consider wealthy, is worse off materially than most poor people in America. That, in itself, is striking.

The second purpose of the exercise is to shed light on some ticklish questions. What is the relationship between wealth and happiness? And what is the significance of relative poverty? Mr Banks makes $521 a month in a country where median male earnings are $3,400 a month. Dr Kabamba earns $600 a month in a country where most people grow their own food and hardly ever see a bank note. The two men's experiences could hardly be less similar. But which of the two would one expect to be happier?

The reality is that poverty is a very slippery concept; especially when we begin to talk about relative poverty. If we take the poorest one percent of Americans (about 3 million people) and compare them with the top one percent of Americans, the enormous disparity would is obvious. However, if we offered the one billion people who live on less than one dollar a day a chance to swap places with our 3 million poorest Americans I have little doubt they would jump at the chance. Furthermore, take a look at this crude chart showing what a typical poor nation’s distribution of income looks like compared to a wealthy nation’s distribution. (I am using income assuming that wealth and income generally vary together.)

The poor nation has the great majority of people living within a very narrow range of income and a very few exorbitantly wealthy people. Because so much of the population lives in such a narrow range of income the relative differences mean little. However, in the wealthy nation, all but a few people are financially better off then the overwhelming majority of people the poor nation. But the distance between the wealthy and the poor is far greater and if you are in the bottom 10-20% of the population there are a great many people who are significantly wealthier than you. Thus, even though the people at bottom of the distribution in a wealthy nation are better off than most people in a wealthy nation they may have a much higher sense of deprivation.

Here I would interject that the income distribution  in the Roman Empire almost certainly looked like the poor nation distribution on this chart. James Jeffers ranks the social classes of Jesus day in this order. (1)

Senatorial – Approximately 300 families. Had to have an estate of at least 250,000 denarii (About one day’s wages; say $50 in USAmerica today.) Two senators are known to have had estates of 100 million denarii, which was equal to about one year’s income for the entire empire.

Equestrian – About .1% of the population. Had to have an estate of at least 100,000 denarii

Decurion – Less than 5% of the population. Had to have an estate of at least 5,000 to 25,000 denarii, depending upon locale.

Respectable populace – A small percentage of the population. Most had less than was needed to become a Decurion but were not living hand-to-mouth. They were usually small landowners, craftsman or shopkeepers. [Jesus (Carpenter), Peter, James, John, Andrew (Fishermen), Matthew (Tax Collector), and likely Judas Iscariot were of this class. We don’t know enough about the other disciples to hazard a guess. Rodney Stark writes that “…a consensus had developed among New Testament historians that Christianity was based in the middle and upper middle classes.” (2)]

The poor and most slaves – The great majority. Well more then half of the population and possibly higher than 80%. The poor were tenant farmers, urban day laborers, and dependents of patrons. Orphans, widows and disabled. There were slaves of differing status but most were in this social stratum. Many of them struggled to survive day-to-day.

For all practical purposes, the absolute poor and the relative poor were one in the same group. From what I know of ancient cultures (and I am no expert) this kind of distribution was similar to the cultures of Abraham’s day as well. Therefore, when the Bible speaks of the poor it is referring to a context that is very dissimilar to the context we live in today. It is important not read our context back into the scripture.

The issue of relative poverty in a developed nation where the poorest folks are better off than most people throughout history, and the great majority of people in some contemporary countries, is a recent ethical debate. Only in the past two hundred years have we had to confront this issue. I will turn to that issue shortly but first I want to turn to the issue of the billion or more people living at or near absolute poverty.

(1) Jame Jeffers, "The Greco-Roman World of the New Testament: Exlporing the Background of Early Christianity." Downers Grove, IL: Intervarsity Press, 1999. Chapter 6.

(2) Rondney Stark "The Rise of Christianity: How the Obsure , Marginal Jesus Movement Became the Dominant Religious Force in the Western World in a Few Centuries." San Francisco: HarperSanFranciso, 1997. 31.

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Comments

[Benjamin P. Glaser]

Wow. This would be very useful in a discussion I am having with a fellow seminarian about the Christian life and property. With your permission I would like to link this article in our discussion.

[Benjamin P. Glaser]

Here is the discussion if you would like to take a gander.

http://backwoodspresbyterian.blogspot.com/2006/
07/discussion-on-wealth-and-christianity.html

[Michael Kruse]

Link away Benjamin and thanks for the link.

[L. VanDan]

How transparent you are to use white 'hillbilly' America as an example of 'poverty.' However, you overlook the obvious. There are all kinds of poverty in the world. Physical poverty (on Maslow's hierarchy of needs) takes care of only one kind. But there are others as well-- poverty of the mind, the spirit, social poverty, etc. Jesus was well aware that some poverty is a transient state of bad fortune and is not, as in your example, a state of laziness or what I call self-perpetuating poverty. I grew up near and around poverty all of life. There were clearly some social malcontents who were greedy, not needy. And there were also people that just happened to be in the wrong place at the wrong time and just needed a little 'boost' to be ok again. Jesus wisely counseled his disciples to put poverty into perspective and worship God first and help those in need second. As long as there are human character flaws, evil, and ignorance in the world, we will ALWAYS have poverty, and it is wise to realize that. Poverty is a form of disorder, and as such, is a kind of disease. We can prevent some, but not all disease until we live in a righteous state. And who knows when that will be!