Poverty Footprint

The famous Indian American Business Management Professor C. K. Prahlad has come up with the term poverty penalty in his bestselling book Fortune at the Bottom of the Pyramid. Through this term he tries to draw attention to the age old phenomenon of the poor people having to paradoxically pay higher for economic services than those who are rich. This is especially so in the crucial area of loaning capital for economic or non-economic activities. Earlier the concept of moral hazard was advanced by economists to explain the higher interest rates that the poor have to pay to moneylenders. The latter have to bear the greater risk of default by the poor and so they charge a higher interest rate to avoid the moral hazard of the poor behaving recklessly if given cheap loans. However, all these terms try to obfuscate the basic truth that earning profit by a few must necessarily lead to the poverty of the many in the long run and put the latter at the mercy of the former. This kind of economic and social imbalance is bound to lead to social and political unrest.
This truth was recognised by early human beings and so there have been strictures against usury or the use of money to increase money by getting something without doing any concrete productive work instead of its use only as a medium of exchange. All religions traditionally have sanctions against usury as being a highly anti-social activity. But with the coming of the colonial era all this changed as huge amounts of gold and silver and other merchandise began to crowd into Europe from the colonies and so financial sophistication began with various kinds of transactions being invented beginning initially with the discounting of bills of exchange. Over the six centuries roughly from the time that Columbus landed in the West Indies the financial system has become more and more complicated. More intricate forms of usury and discounting have manifested themselves and over the past few years this had taken the form of lending for home purchase in the U.S.A to so called sub-prime loanees who due to their poverty had a poor track record of repayment. Not only this, these loans were then securitised and bought and sold on the financial markets with little regard for the quality of the loans and based only on the collateral value of the properties that had been mortgaged. Banks from across the world jumped into getting a piece of this highly profitable usurious pie. So eventually what the early religious leaders had so sagely foreseen happened and there was a meltdown that has caused havoc across the world.
There is now a lot of advice flying all over as to what is to be done to salvage the situation. However none of this advice speaks of banning usury or profit making without which there can be no lasting solution to the problem of poverty.
In recent times two new concepts have been floated. That of Ecological Footprint, Carbon Footprint and Water Footprint. The first concept lays stress on the amount of natural resources that are being used up by an entity - individual, community, region or country in the conduct of their economic and social activities and tries to compare it with what is sustainably available. Similarly the second concept brings into focus the amount of greenhouse gases in equivalent weight of carbon dioxide that are being emitted by the various activities being undertaken by an entity. The third concept brings attention to bear on the amount of water that goes into the conduct of the economic and social activities of entities and compares that with the water that is sustainably available. However, both these concepts fail to lay stress on the social and political aspects of resource use which are linked with concentration of property and resources in the hands of a few. It is the more propertied classes that are using up more resources and also through usury and profit making of one kind or another impoverishing a large majority of human beings by denying them the basic necessities of food, shelter, clothing, education and health services.
Consequently a new concept of Poverty Footprint has been formulated by the international development support NGO Oxfam and is being researched by it in collaboration with Unilever Indonesia to focus on the impact on the lives of poor people due to the running of corporate businesses. Like in the case of the other footprints all entities should assess how much their economic activities and lifestyles are contributing to the concentration of resources away from the provision of proper food, shelter, clothing, education and health to the people at the bottom of the pyramid. If an honest assessment is made it will be found that people like Bill Gates and Warren Buffet have a huge poverty footprint because their continuing wealth accumulating activities far outweigh their philanthropic activities. One major poverty causing expenditure is that incurred by states in maintaining armies and fighting wars all in the final analysis in aid of property accumulation. Thus not through philanthropy but only through a radical redistribution of concentrated wealth and a reordering of the global economy to banish profit making and interest taking can the poverty footprint be reduced.
The great tragedy is that when poor people want to assert this truth and try to fight against the policies that impoverish them they are crushed with the use of state force in favour of the propertied classes. The picture below shows the house of a poor Bhil adivasi in Dewas district illegally demolished by the police as part of a campaign to crush the mass organisation Adivasi Morcha Sangathan as a member of which he was fighting for his rights.