Capitalism and Poverty

Margaret Bourke-White

I will summarize at least 5 ways that capitalism creates/contributes to poverty:

1) The preconditions needed for capitalist modes of production create poverty

The process whereby wage labourers are appropriated for use in industrial environments necessarily means the destruction of non-wage modes of production, i.e. the guilds and craft associations, which in turn leads to a severing of the connection between land and labour. This has happened and is continuing to happen in Africa and Asia in large numbers where poverty is additionally created by the fundamental necessity for labour to move, i.e. rural to urban, leading to the breakdown of traditional social configurations and often causing living conditions to considerably deteriorate.

2) Commodification increases poverty

As commodification becomes ever more pervasive, cultural norms are modified to reflect “general standards of private consumption.” Wages are the basic precondition of realizing these modified norms. As others have pointed out, the inability to realize these basic norms means relative poverty.

3) Capitalistic production of waste produces poverty

This may be seen clearly in the case of the production of weapons, tobacco and other socially harmful substances for mass consumption. In addition the by-products of pesticides and nuclear power in the form of nuclear waste often contaminate the water table and thus crops and human health. Rather than allocate funds for health victims of capitalistic modes of production and commodities, researchers have argued that governments in the 20th century used surpluses for military purposes, further endangering and pauperizing global citizens.

4) Capitalistic environmental destruction has caused and will cause further poverty

This is related to the previous point but at a much greater level. While some believe capital will be able to appropriate clean technologies for production, the reality is this process is moving much too slowly to prevent global environmental catastrophe. This is partly because capitalistic modes of production are always pushing towards more and more productivity which require more energy and produce more waste. Researchers believe that due to increasing global warming and climate change, there have already been large migrations of victims, in excess of those migrations caused by global conflict. These mass migrations (sometimes numbering in the hundreds of millions) have the inevitable consequence of causing extreme poverty, even as aid organizations and governments strain to meet the need. Unfortunately these migrations are only likely to increase, especially from coastal regions.

5) Capitalism creates poverty through the mechanism of accelerated technological change

Capitalism seeks to increase profit and productivity through the use of technological innovation. As the pace of productivity increases, the ability of labour to adapt to these changes decreases, as is evidenced by developments in India and elsewhere. Technology which allows greater productivity leads particularly to the reduction of the requirement of unskilled labour, which also allows for the fragmentation of the production process itself, leading to greater outsourcing. This process is also evident here in the West.