Making Poverty: a History

The title, clearly inspired by the Make Poverty History campaign (launched in February 2005 in the UK by several British charities and running until 2006), is not just a cunning marketing ploy, but has been used to draw attention to the inalienable fact that in order to make poverty history, the history of poverty making needs to be understood. Concerned with the plight of the rural poor in developing countries, Lines shows the negative impact that global policies have had on national economies and the way in which they have threatened food-security and seriously undermined the livelihoods of millions of small-scale farmers. The latter, he claims, risk ending up on the economic scrapheap, unless there is a comprehensive shift in attitudes and policy.

Lines examines the hierarchical power structures in agricultural markets, in which we find the poor firmly at the bottom. Through his critical analysis of commodity supply-chains we can clearly see the linkages between the poor rural farmer, supermarkets, giant food corporations and the global financial markets. Lines shows that during the 1980’s there was a fundamental shift in economic wisdom, and a return to free-market ideology. Neo-liberal policies were implemented, based on the belief that the market mechanism, left to its own devices, would ensure economic growth and therefore poverty reduction. Through the leverage that the debt crisis offered the World Bank and the IMF, many developing-country economies were forced to abandon national development strategies and to open up their markets to international competition. An important part of this was export-oriented production strategies required to raise foreign revenue, in part to service their debts. Developing countries were required to grow crops for export rather than food to suit their domestic needs. Ill-equipped to deal with the vagaries of the global market-place, small farmers, particularly vulnerable to the price fluctuations and shocks that are inherent in the global financial system, and subjected to the corporate power and competitive nature of the behaviour of large commercial farms, have simply been swallowed up (Introduction).

Overall the policies imposed on developing countries have had a devastating effect on rural people. The author shows that the blame for failure is often shifted back onto developing countries, and through a critical assessment of the economic rationale behind the implementation of export-oriented policies he shows exactly how and why these policies failed. He not only offers a clear analysis of the working of the markets but offers some solutions. In order to get out of the trap, he argues for a different approach. One where developing countries take back control and adjust their economies to their needs, not to the requirements of the global market-place. He argues that they can reduce their vulnerability by concentrating on their own national requirements for food security.

The author concludes by writing ‘this approach is the only humane one and it has to be pursued, in the face of the powerful vested interests that will inevitably oppose it’ (p.149). Herein lies the problem: the vested interests that will inevitably oppose it. Whilst Lines has got many things right the reader may be left wondering if he really understands the power of those who do have a vested interest in maintaining the status quo?

For example, he argues that the free-market economy model has prevailed because of intellectual fashion and ‘surely what matters is not intellectual fashion but what can be deduced from the evidence’(p28). Here, Lines has got the right end of the wrong stick. Liberal economic theory has prevailed precisely because of what has been deduced from the evidence: that unfettered markets work extremely well for some. The rich and powerful become richer and more powerful and so of course it has become the dominant model. If we lived in a world where improving the plight of the poor was the business of those with financial power, poverty would not exist in the form it does now.

In addition his policy proposals depend firstly on strong governments in developing countries and secondly on the goodwill of global institutions to make space for these countries to pursue national strategies. Although Lines does touch on the issue briefly of governance and corruption, he seems to view governance as another form of conditionality, and almost excuses corruption. Whilst corruption may well be a structural consequence of poverty it does nevertheless exist and it does seriously impede the ability of a country to pursue poverty reduction strategies.

For those governments that are committed and strong enough to pursue Lines’ policies, the successful outcome will be largely dependant on cooperation from global institutions, and given the intrinsic nature of power structures, this is unlikely to occur. Changing the power structures is, arguably, the central challenge to poverty reduction.

Despite shortcomings in addressing the enduring power those global institutions have over developing countries; this is a relevant and well-written book whose strength lies in its critique of the economic rationale behind global policies and in its lucid explanations of the technical workings of markets. These are often criticized but not always clearly understood. By demystifying economic concepts Lines’ book is accessible to anyone interested in poverty reduction, as well as to specialists. It is a must-read for agencies and individuals involved in development projects who have to understand the structural reasons for poverty in order to have a successful outcome for projects that aim to reduce poverty. Lines’ analysis should raise interesting questions on whether changing global trade structures is a more sustainable and long-term solution to making poverty history than other initiatives such as simply providing financial aid.

If global institutions did make space for developing countries, and if the policy recommendations that Lines suggests were to be implemented then there is no doubt that we would witness huge improvements in the lives of the one billion poor people to whom Lines has dedicated his book.