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| == '''[[History of economic thought]]''' ==
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| ''by [[User:Nick Gardner|Nick Gardner]], [[User:João Prado Ribeiro Campos|João Prado Ribeiro Campos]] and [[User:Richard Jensen|Richard Jensen]]
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| | ==Footnotes== |
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| Modern economic thought is generally considered to have originated in the late eighteenth century with the work of [[David Hume]] and [[Adam Smith]], and the foundation of classical economics. (Earlier approaches are described in the article on the [[History of pre-classical economic thought]].) The nineteenth and twentieth centuries saw major developments in the methodology and scope of economic theory.
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| Nineteenth- and early twentieth-century economists applied deductive reasoning to axioms considered to be self-evident and to simplifying assumptions which were thought to capture the essential features of economic activity. That methodology yielded concepts such as [[elasticity]] and [[utility]], tools such as marginal analysis, and theorems such as the law of [[comparative advantage]]. An extension of the relationships governing transactions between consumers and producers was considered to provide all that was necessary to understand the behaviour of the national economy.
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| The development, in the later 20th century, of systems of [[economic statistics]] enabled economists to use inductive reasoning to test theoretical findings against observed economic behaviour and to develop new theories. By that time, the concept had emerged of the national economy as an open interactive system, and analysis of that concept provided explanations of [[recession|recessions]], [[unemployment]] and [[inflation]] that were not previously available. The application of empirical data and inductive reasoning enabled those theories to be refined and led to the development of forecasting models that could be used as tools of economic management.
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| The late 20th and early 21st centuries have seen further theoretical and empirical refinements and significant advances in the techniques of economic management.
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| ===Overview: categories of economic thought=== | |
| Historians categorise economic thought into “periods” and “schools” and tend to attribute each innovation to one individual. This categorization is helpful for the purpose of exposition, although the reality has been a story of interwoven intellectual threads in which advances attributed to particular individuals or schools have often prompted the work of others. For example, the quantity theory of money, which achieved prominence in the twentieth century and is associated with Milton Friedman, was first formulated at least three centuries earlier. Many of those threads that have permeated the categories referred to as "Classical economics" and "Neoclassical economics"—such as the concept of value and the nature of economic growth—had an earlier origin in "Pre-classical economics" (see [[History of pre-classical economic thought]]). "Classical" in economics denotes the adoption in the late eighteenth century of an approach that was inspired by the enlightenment and the methodology of the physical sciences, and had abandoned previous examinations of economics in terms of ethics, religion and politics. Preoccupation with those threads was overshadowed in the twentieth century by the responses of [[Keynesianism]] and [[monetarism]] to the problems of unemployment and [[inflation]], but the development of neoclassical economics started before that time and has continued thereafter. (The boundary between the "classical" and "neoclassical" categories is marked mainly by the rejuvenation of the value thread by the concept of [[utility]] and the associated explanation of price in terms of "[[supply and demand]]".) The introduction of new tools of exploration has since led to the vigorous development of that and other threads, and an expansion in the scope of economics into many new directions.
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| ''[[History of economic thought|.... (read more)]]''
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| ! style="text-align: center;" | [[History of economic thought#References|notes]]
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| {{reflist|2}} | | {{reflist|2}} |
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Latest revision as of 09:19, 11 September 2020
The Mathare Valley slum near Nairobi, Kenya, in 2009.
Poverty is deprivation based on lack of material resources. The concept is value-based and political. Hence its definition, causes and remedies (and the possibility of remedies) are highly contentious.[1] The word poverty may also be used figuratively to indicate a lack, instead of material goods or money, of any kind of quality, as in a poverty of imagination.
Definitions
Primary and secondary poverty
The use of the terms primary and secondary poverty dates back to Seebohm Rowntree, who conducted the second British survey to calculate the extent of poverty. This was carried out in York and was published in 1899. He defined primary poverty as having insufficient income to “obtain the minimum necessaries for the maintenance of merely physical efficiency”. In secondary poverty, the income “would be sufficient for the maintenance of merely physical efficiency were it not that some portion of it is absorbed by some other expenditure.” Even with these rigorous criteria he found that 9.9% of the population was in primary poverty and a further 17.9% in secondary.[2]
Absolute and comparative poverty
More recent definitions tend to use the terms absolute and comparative poverty. Absolute is in line with Rowntree's primary poverty, but comparative poverty is usually expressed in terms of ability to play a part in the society in which a person lives. Comparative poverty will thus vary from one country to another.[3] The difficulty of definition is illustrated by the fact that a recession can actually reduce "poverty".
Causes of poverty
The causes of poverty most often considered are:
- Character defects
- An established “culture of poverty”, with low expectations handed down from one generation to another
- Unemployment
- Irregular employment, and/or low pay
- Position in the life cycle (see below) and household size
- Disability
- Structural inequality, both within countries and between countries. (R H Tawney: “What thoughtful rich people call the problem of poverty, thoughtful poor people call with equal justice a problem of riches”)[4]
As noted above, most of these, or the extent to which they can be, or should be changed, are matters of heated controversy.
- ↑ Alcock, P. Understanding poverty. Macmillan. 1997. ch 1.
- ↑ Harris, B. The origins of the British welfare state. Palgrave Macmillan. 2004. Also, Oxford Dictionary of National Biography.
- ↑ Alcock, Pt II
- ↑ Alcock, Preface to 1st edition and pt III.
