Apparently, if you make up a measure, then you can make the number of that measure dance to your tune. Who knew, eh?
Hence why the Social Metrics Commission (SMC) tells us that poverty is rising:
The latest estimates, by the non-partisan Social Metrics Commission, show that the number of people in poverty has risen to 16 million, or nearly one in four of the UK population – its highest level since records began in 2000.
One in three children in the UK are now in poverty, we’re told. That ‘one in four of the population’ being claimed seems higher than the one in five claimed only a couple of years ago. Sure, it’s possible that this is true. But this past couple of years hasn’t, in fact, seen some devastation of the economy – the sort of thing that would be required to explain that change in the poverty numbers. We can – and possibly should – complain that things haven’t gone very well, certainly not as well as hoped, but we’ve not had a depression, not even a recession. So, what gives?
Handily, we have a cut out and keep guide to the basic issue. What is talked about, in general, these days is not, in fact, poverty. It’s most certainly not destitution either, despite some liking to use that word. As Barbara Castle pointed out back in 1959, even by that date, actual destitution had gone. That absence of actual stuff-a-waif-up-a-chimney destitution means that the desire to dispossess the bourgeoisie has faced a near unanswerable question: what’s the point? If we’ve found out that the way to kill poverty is to have economic growth, not redistribution, then why don’t we continue to have economic growth to beat not just poverty, but near poverty? In fact, why not continue to have growth until all are, by historic standards, rich as Croesus?
That being, you know, what we’ve done for the past 250 years since we started getting machines to do the hard work. Every year, it gets marginally better and after a couple of centuries, everyone has three squares, a crib and a change of clothes. Think what we could do if we carried on?
This, however, does not suit the sort of person who believes the necessity of dispossession is greater than the actual improvement in living standards over time. Therefore, given that actual poverty has been beaten, some other excuse for radical redistribution must be found. Enter the idea of ‘relative’ poverty.
This is a term which has won this past century. Poverty is now, officially, defined as living on less than 60% of median household income (adjusted for household size, before or after housing costs to taste). Absolute poverty is living below what that standard was in 2010. This is not a measure of poverty, but of scarcity relative to what the average bloke next door has. Put simply, it’s a measure of inequality.
Now, inequality could be important. I think not, but hey, that’s me. It’s absolutely not as important as ‘The Spirit Level’ made out, because inequality fell this past 15 years. And if they were right, then the country should be better now than then because inequality fell. That was their whole pitch, that inequality is bad, M’Kay? Their theory doesn’t even work by their own preferred measure, the Gini.
Still, we do have those who insist that the richer must be taxed more. This is supposedly because inequality in itself is bad and that alone is the reason. So, we have measures of poverty that are, in fact, measures of inequality. So that there’s a justification for that socially righteous taxation of everything off anyone who has more than the norm.
The SMC insists, no, really, Scout’s Honour, that this is not what it’s doing. Its researchers are measuring real poverty, not merely some inequality. From the report:
The Commission’s work remains solely focused on the question of how poverty is measured.
As outlined in its interim report, the Commission viewed poverty as the experience of having insufficient resources to meet needs. However, there are a number of different dimensions along which ‘needs’ and ‘resources’ could be characterised.
Indeed so. You can be brutal – like me or Barbara Castle – and insist that, absent significant mental or addiction problems, everyone can meet their needs in this country today. This does not gain a self-appointed commission space in the newspapers of course.
However, we get this claim:
The Commission’s focus is on measuring poverty, not social mobility, income inequality or wider measures of economic wellbeing.
One guide to this is that the official statistical response to the Commission’s work is called the ‘Below Average Resources measure’. If we’re talking about what these people, here, have as compared to those over there, or even what the average has, then we’re talking about relative, not absolute, poverty. Or, we’re back to inequality if we are to be precise in our language.
We can also see this elsewhere in the SMC report:
After considering a range of options, the Commission decided that the most appropriate data to use to proxy needs was a measure of what others in society have available to spend
The definition of poverty is relative to what everyone else has. It’s a measure of inequality, not poverty, by any absolute standard.
…the Commission had to develop a way of comparing the two to create a poverty line. Commissioners did this by determining a benchmark for social norms in society and then setting a threshold beneath this that reflected the situation of poverty.
If the laddie next door has two pairs of Air Jordans, then having to wear Primark tackies is poverty. Which, obviously, it isn’t – it’s inequality.
Further, the SMC is measuring inequality by its own measure; inventing a new one even. At which point, is it any surprise that its results are so wildly different from those of anyone else? After all, what’s the point of having a whole commission and everything to find out that things aren’t so bad?
The SMC claims not to be measuring inequality when, in fact, that is all it is measuring. Disconcertingly, the Commission is not populated by fringe left-wingers trying to justify class war. These are establishment thinkers who have a good chance at embedding this stuff in government policy. This is a testament to how widely accepted these ideas have become. Nonetheless, the differences between inequality and poverty are important – it really is necessary that we sort the two out from each other.
Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.
CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.
