One of the serious outcomes of the failure of the trickle down effect, essentially because of the 'vested' role of the State, is poverty.
THE EXTENT of poverty, as we know, is both severe and staggering all the world over. According to many research reports, (a) there exists an overlap between poverty and inequality, and that they are closely related, and (b) incidence of poverty correlates with low levels of health, education, and nutrition, inadequate shelter and other unsatisfactory social conditions. It is also an accepted fact that poverty in most of the developing countries, despite being urbanized, still remains overwhelmingly a rural phenomenon.
It is baffling to see that the poor are not only concentrated in countries with low rates of GNP and per capita GNP levels, but also in fast growing countries with relatively high rates of GNP. The impacts are:larger household size is associated with greater incidence of poverty as measured in terms of household consumption or income per person; child-adult ratios are larger in poor households; poor-households are larger and younger, and higher mortality, especially of children, among the poor households, stimulates excess replacement births; there is a strong association between high fertility and poverty; there is widespread feminization of poverty (especially in male-dominated societies) in the sense that young females are more exposed to poverty-induced nutritional and health risks; poor households depend heavily on unskilled labour income; poor households often over-exploit their immediate physical environment and the subsequent degradation intensifies poverty; poor households increasingly lose access in private and common resources; and poverty in urban areas is often associated with pollution due to the concentration of people, industry and traffic.
There is another dimension of Poverty that is emerging in certain countries which we term as 'concealed poverty'. It is hypothesized that in countries, where poverty-alleviation programmes consistently fail, poverty starts getting 'concealed' or 'disguised' through various legitimate and illegitimate means with the result that poor do not appear to be poor. In essence, there exists an intriguing and also paradoxical situation in certain countries where there are high poverty levels based on macro indices and survey data, but where poverty, somehow, is not visible to the casual observer.
The dynamics of this process works like this: poverty, amongst other things, leads to loss of self-esteem in the eyes of the richer class. Various manifestations of such marginalization (also called social apartheid) of the poor by the ricer class become increasingly extreme, especially in the urban areas, thereby challenging the fight against poverty, and even threatening democracy. This in turn motivates the poor to protect this loss through borrowing and crime-related activities.
Poverty, thus, gets concealed and the pattern of consumption distorted towards visible and conspicuous items to restore their self-esteem at least in an extremely short period and not in a sustained way. Beyond that the fallouts of this dramatized behaviour are highly damaging both for the poor and for the economy as a whole in terms of reduced gross domestic savings, which exercise their adverse impact on investment and growth. No matter how we define poverty it is seen as a curse, and a vice, and poor people are looked down upon with disgrace (which gets accentuated by a number of social factors like racial in South Africa and caste-based in India) by the rich, who have no real feelings, whatsoever, for the pain and suffering the poor undergo through every moment of their existence.
But then, one has to live with whatever it is, given the natural instinct to survive, and that too at a heavy cost of self-esteem, especially in the present-day materialistic and self-centered world. In this kind of a backdrop, any one who is poor naturally has a strong desire to conceal one's poverty, no matter how he does it, to meet his basic survival needs, and also to protect thereby his self-esteem. This desire, somehow, is also intensified by consumers' tendency to imitate, called the demonstration effect or neighbourhood effect, especially in countries where poverty is compounded by worsening distribution of income. This is highly immiserizing for the poor, and victimizes them in many ways. The initial impulse to shed off this mental and physical torture and stress, as caused by the loss of self-esteem, and demonstration effect, is to shift from the consumption of 'inferior' goods to that of 'normal' goods.
The idea of this shift to conspicuous consumption places the poor in a state of acute dilemma, where they have to make a difficult choice between two courses of action, both of which are equally undesirable in their own ways. It is unfortunately the society and its economic and social fabric and also its attitude, that encourages a majority of the poor to get motivated towards the second option of moving away from poverty artificially, and, thereby, publicly concealing it. There are two possibilities, not necessarily mutually exclusive, open for such a course of action, and each one is capable, in its own way, to add to the command or entitlement of the poor, not necessarily over basic consumption needs of ?inferior? goods, but also beyond them over 'normal' goods.
The first possibility is legitimate, but may be unethical and is concerned not only with spending a major part of one's income on 'normal' goods but also through self-borrowing in the sense of spending one's future income in the present, and this leads to a vicious debt-trap for the poor. The second possibility is both illegitimate and unethical, and beyond that it is also immoral and dishonourable, and is concerned with crimes, which bring in easy money. In fact, hunger linked with poverty begets crime, and crime begets 'unearned' income. But these two possibilities are not only exclusive to the poor and used by the rich to enhance their prosperity with highly disproportionate effort.
Every country, therefore, needs to ameliorate the lot of the proletariat keeping in view the wider connotation of poverty as enunciated by Amartya Sen. There is a need to have fresh programmes to encourage self esteem and community solidarity, to eliminate discrimination against poor, and to increase the empowerment of the underclass.