Saturday, February 27, 2010

Inequality and Poverty: Haiti and the US.

Inequality and Poverty: Haiti and US.

As Haiti approaches the rainy season with its daily downpours, concern grows because the makeshift shelters in which many people are living today, will not withstand the rain. The government is planning to erect more solid tent cities but lacks sufficient open land on which to build them. Most of the real estate in the capital, Port-au-Prince, is owned by a small number of very rich people in Haiti. They are resisting having their property used to shelter the poor and the government is unlikely to prevail against them. Their wealth makes them politically very powerful; they can topple the government if they so choose. The government cannot force them to do anything, let alone to allow their land to be used for shelters for the poor.

It is a commonplace that poverty in Haiti, and elsewhere, is connected to inequality. In Haiti, there exists a very small group—perhaps 1% of the population—that is immensely rich. Everyone else is in pretty desperate straits. (Some people do a bit better: soldiers, police, and bureaucrats who supplement their meager income by taking bribes).

The misery of the masses of Haitians is directly connected with the prevailing differences in standard of living and wealth.The wide gap between the rich and the poor has direct economic effects. In countries where there is a middle class—people who do not consume whatever little income they have—they can save a little bit of money to send children to school, to lend out to a relative who wants to start a little business, to purchase a small piece of land for growing vegetables. Here some people have opportunities for improving their condition. Where the gap between rich and poor is as stark as in Haiti, practically all productive resources are in the hands of the very rich. The poor have no chance for raising their incomes and, with it, reducing poverty.

In Haiti the gap between rich and poor is extreme. But the distance between the wealthy and the rest of us is growing steadily in the US and the fate of Haiti holds some important lessons for us.

Unequal distribution of resources and wealth affects poverty in other ways. In Haiti many people are malnourished and/or ill. Not only do they lack land and tools in order to create a decent living for their families but their physical energy is sapped by hunger and disease. Their intelligence and inventiveness cannot be put to use because people are debilitated by hunger.

But the main problem of large differences in economic condition is demonstrated by the Haitian government's problem in building weather proof shelters for the earthquake victims. The government cannot move without the approval of the very rich because, through their wealth, they control the political system. If the government depends for its existence on the very rich, it will serve them and not the majority of the population. The incredible maldistribution of wealth in Haiti is reflected in comparable political inequality. The government does not attend to the people without political power and that is clearly one of the causes of the misery of most of the people.

If the wealth of a nation is in the hands of a small minority, the rest of the population is not well cared for. There are no schools for many Haitian children. Large numbers of adults have no education, and thus have very limited possibilities for making a living, let alone improve the condition of their families or their village.

That neglect of the masses of Haitians, of course, produces constant political unrest. The rich and powerful elite could deal with that by improving the lot of the poor, that is by redistributing wealth. But it is cheaper to do so by harsh political repression. The Haitian elite has chosen that route. The result is constant turmoil barely controlled, much of the time, by a repressive and brutal government.

When political power is in the hands of a small group of super rich families, political decisions favor them at the expense of people who are not rich. In the 1950s an international development project, financed and built by the US, dammed up a major river to create a lake for electricity generation and irrigation. The electricity went to light up the houses of the rich; the irrigation benefits large farms downstream from the dam that are owned by multinational agribusiness. The profit from the agribusinesses move abroad to the foreign owners of the agribusinesses; much of it ends up in the US. (Some Americans live a little bit better at the expense of the Haitian poor.) Only the pittance earned by farm workers remains in Haiti. The lake itself drove many Haitian farmers off their fertile farmland. Their children were forced to move into the city to stitch soccer balls and catchers' mitts for American firms for a few pennies an hour. The rich got richer, and the poor did what they always do. The project to “help Haiti” only helped to further impoverish its population. By building that dam, the US supported the rich elite. This is only one instance of the bankers, agribusinesses and the government of the US making common cause with the rich and the powerful in Haiti.

Haitian poverty carries important lessons for the US. Inequality in the US has been increasing steadily since the 1970s at least. Wages and salaries of significant portions of the middle class have stagnated. Many well paying jobs have been exported abroad to be replaced by jobs that pay much less. At the other end, the pay of big executives, stock speculators, top athletes, and others have risen sharply. The results, according a recent study by two British researchers, have been increased drug use, obesity, violence, mental illness, teen age pregnancy and illiteracy. (See The Spirit Level by Kate Pickett and Richard Wilkinson).
As enormous wealth has become concentrated in fewer hands, more and more people are feeling desperate about their lives because they have no control over them. The power to ameliorate their situation is in the hand of a power elite who, clearly, do not care about the millions of people who work hard every day just to barely get by. The government bails out the banks so that they can make money again while unemployment is stuck at more than 10% nationwide and is much higher in many places. As the working poor and the middle class see not only that their situation is difficult but that they have no hope of improving it, they lash out in their families, against strangers, or most often against themselves. Stark economic inequality brings with it political inequality, which breeds anger and despair manifest in the daily list of murders and self-destructive behaviors.

The disappointment over the Obama presidency illustrates our impotence. The promise of “hope” and “change” have turned out to be hollow. Any slight attempt to reduce inequality, for instance, by making health care available to more people is stymied by lobbying of the insurance companies, the medical associations, and the drug companies. The outlook for reducing inequality, here as in Haiti is very poor. No wonder there is so much anger out there.