Poverty Changes

£14,000 is quite a large amount of money. Enough for 70,000 Freddos, a decade’s worth of holidays, two new Nissan Pixo’s, several thousand potatoes or a gold standard racing pigeon. However, if you’re trying to live off just that amount in modern Britain, it quickly seems quite a lot smaller. Half of that could easily disappear on rent, whilst the average British family will spend a further £4,000 on food (significantly greater than the European average, for one reason or another). Then we must factor in tax, work-related expenses, various repair bills, a TV license, utility & heating bills, petrol money and other transport expenses, and it quickly becomes apparent that trying to live on this amount will require some careful budgeting. Still, not to worry too much though; it’s certainly possible to keep the body and soul of a medium sized family together on £14k a year, if not absolutely comfortably, and in any case 70% of British families have an annual income in excess of this amount. It might not be a vast amount to live on, but it should be about enough.

However, there’s a reason I quoted £14,000 specifically in the figure above, because I recently saw another statistic saying that if one’s income is above 14 grand a year, you are one of the top 4% richest people on planet Earth. Or, to put it another way, if you were on that income, and were then to select somebody totally at random from our species, then 24 times out of 25 you would be richer than them.

Now, this slightly shocking fact, as well as being a timely reminder as to the prevalence of poverty amongst fellow members of our species, to me raises an interesting question; if £14,000 is only just about enough to let one’s life operate properly in modern Britain, how on earth does the vast majority of the world manage to survive at all on significantly less than this? More than 70% of the Chinese population (in 2008, admittedly; the rate of Chinese poverty is decreasing at a staggering rate thanks to its booming economy) live on less than $5 a day, and 35 years ago more than 80% were considered to be in absolute poverty. How does this work? How does most of the rest of the world physically survive?

The obvious starting point is the one stating that much of it barely does. Despite the last few decades of massive improvement in the living standards and poverty levels in the world in general,  the World Bank estimates that some 20% of the world’s populace is living below the absolute poverty line of surviving on less than $1.50 per person per day, or £365 a year (down from around 45% in the early 1980s- Bob Geldof’s message has packed a powerful punch). This is the generally accepted marker for being less than what a person can physically keep body and soul together on, and having such a huge proportion of people living below this marker tends to drag down the global average. Poverty is something that the last quarter of the century has seen a definitive effort on the part of humanity to reduce, but it’s still a truly vast issue across the globe.

However, the main contributing factor to me behind how a seemingly meagre amount of money in the first world would be considered bountiful wealth in the third is simply down to how economics works. We in the west are currently enjoying the fruits of two centuries of free-market capitalism, which has fundamentally changed the way our civilisation functions. When we as a race first came up with the concept of civilisation, of pooling and exchanging skills and resources for the betterment of the collective, this was largely confined to the local community, or at least to the small-scale. Farmers provided for those living in the surrounding twenty miles or so, as did brewers, hunters, and all other such ‘small businessmen’, as they would be called today. The concept of a country provided security from invasion and legal support on a larger scale, but that was about it; any international trade was generally conducted between kings and noblemen, and was very much small scale.

However, since the days of the British Empire and the Industrial Revolution, business has got steadily bigger and bigger. It started out with international trade between the colonies, and the rich untapped resources the European imperial powers found there, moved on to the industrial scale manufacture of goods, and then the high-intensity sale of consumer products to the general population. Now we have vast multinational companies organising long, exhaustive chains of supply, manufacture and retail, and our society has become firmly rooted in this intense selling international economy. Without constantly selling vast quantities of stuff to one another, the western world as we know it simply would not exist.

This process causes many side effects, but one is of particular interest; everything becomes more expensive. To summarise very simply, the basic principle of capitalism involves workers putting in work and skill to increase the value of something; that something then gets sold, and the worker then gets some of the difference between cost of materials and cost of sale as a reward for their effort. For this to work, then one’s reward for putting in your effort must be enough to purchase the stuff needed to keep you alive; capitalism rests on the principle of our bodies being X% efficient at turning the food we eat into the energy we can use to work. If business is successful, then the workers of a company (here the term ‘workers’ covers everyone from factory floor to management) will gain money in the long term, enabling them to spend more money. This means that the market increases in size, and people can either sell more goods or start selling them for a higher price, so goods become worth more, so the people making those goods start getting more money, and so on.

The net result of this is that in an ‘expensive’ economy, everyone has a relatively high income and high expenditure, because all goods, taxes, land, utilities etc. cost quite a lot; but, for all practical purposes, this results in a remarkably similar situation to a ‘cheap’ economy, where the full force of western capitalism hasn’t quite taken hold yet- for, whilst the people residing there have less money, the stuff that is there costs less having not been through the corporation wringer. So, why would we find it tricky to live on less money than the top 4% of the world’s population? Blame the Industrial Revolution.

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Living for… when, exactly?

When we are young, we get a lot of advice and rules shoved down our throats in a seemingly endless stream of dos and don’ts. “Do eat your greens”, “Don’t spend too much time watching TV”, “Get your fingers away from your nose” and, an old personal favourite, “Keep your elbows off the table”. There are some schools of psychology who claim it is this militant enforcement of rules with no leeway or grey area may be responsible for some of our more rebellious behaviour in older life and, particularly, the teenage years, but I won’t delve into that now.

But there is one piece of advice, very broadly applied in a variety of contexts, in fact more of a general message than a rule, that is of particular interest to me. Throughout our lives, from cradle to right into adulthood, we are encouraged to take time over our decisions, to make only sensible choices, to plan ahead and think of the consequences, living for long-term satisfaction than short-term thrills. This takes the form of a myriad of bits of advice like ‘save not spend’ or ‘don’t eat all that chocolate at once’ (perhaps the most readily disobeyed of all parental instructions), but the general message remains the same: make the sensible, analytical decision.

The reason that this advice is so interesting is because when we hit adult life, many of us will encounter another, entirely contradictory school of thought that runs totally counter to the idea of sensible analysis- the idea of ‘living for the moment’. The basic viewpoint goes along the lines of ‘We only have one short life that could end tomorrow, so enjoy it as much as you can whilst you can. Take risks, make the mad decisions, go for the off-chances, try out as much as you can, and try to live your life in the moment, thinking of yourself and the here & now rather than worrying about what’s going to happen 20 years down the line’.

This is a very compelling viewpoint, particularly to the fun-centric outlook of the early-to-mid-twenties age bracket who most commonly get given and promote this way of life, for a host of reasons. Firstly, it offers a way of living in which very little can ever be considered to be a mistake, only an attempt at something new that didn’t come off. Secondly, its practice generates immediate and tangible results, rather than slower, more boring, long-term gains that a ‘sensible life’ may gain you, giving it an immediate association with living the good life. But, most importantly, following this life path is great fun, and leads you to the moments that make life truly special. Someone I know has often quoted their greatest ever regret as, when seriously strapped for cash, taking the sensible fiscal decision and not forking out to go to a Queen concert. Freddie Mercury died shortly afterwards, and this hardcore Queen fan never got to see them live. There is a similar and oft-quoted argument for the huge expense of the space program: ‘Across the galaxy there may be hundreds of dead civilizations, all of whom made the sensible economic choice to not pursue space exploration- who will only be discovered by whichever race made the irrational decision’. In short, sensible decisions may make your life seem good to an accountant, but might not make it seem that special or worthwhile.

On the other hand, this does not make ‘living for the moment’ an especially good life choice either- there’s a very good reason why your parents wanted you to be sensible. A ‘live for the future’ lifestyle is far more likely to reap long-term rewards in terms of salary and societal rank,  plans laid with the right degree of patience and care invariably more successful, whilst a constant, ceaseless focus on satisfying the urges of the moment is only ever going to end in disaster. This was perhaps best demonstrated in that episode of Family Guy entitled “Brian Sings and Swings”, in which, following a near-death experience, Brian is inspired by the ‘live for today’ lifestyle of Frank Sinatra Jr. For him, this takes the form of singing with Sinatra (and Stewie) every night, and drinking heavily both before & during performances, quickly resulting in drunken shows, throwing up into the toilet, losing a baby and, eventually, the gutter. Clearly, simply living for the now with no consideration for future happiness will very quickly leave you broke, out of a job, possibly homeless and with a monumental hangover. Not only that, but such a heavy focus on the short term has been blamed for a whole host of unsavoury side effects ranging from the ‘plastic’ consumer culture of the modern world and a lack of patience between people to the global economic meltdown, the latter of which could almost certainly have been prevented (and cleared up a bit quicker) had the world’s banks been a little more concerned with their long-term future and a little less with the size of their profit margin.

Clearly then, this is not a clear-cut balance between a right and wrong way of doing things- for one thing everybody’s priorities will be different, but for another neither way of life makes perfect sense without some degree of compromise. Perhaps this is in and of itself a life lesson- that nothing is ever quite fixed, that there are always shades of grey, and that compromise is sure to permeate every facet of our existence. Living for the moment is costly in all regards and potentially catastrophic, whilst living for the distant future is boring and makes life devoid of real value, neither of which is an ideal way to be. Perhaps the best solution is to aim for somewhere in the middle; don’t live for now, don’t live for the indeterminate future, but perhaps live for… this time next week?

I am away on holiday for the next week, so posts should resume on the Monday after next. To tide you over until then, I leave you with a recommendation: YouTube ‘Crapshots’. Find a spare hour or two. Watch all of. Giggle.