THEORIES OF POVERTY

Theories on the causes of poverty are the foundation upon which poverty reduction
strategies are based. While in developed nations, poverty is often seen as either a personal or a
structural defect, in developing nations the issue of poverty is more profound due to the lack of
governmental funds.

The Social Darwinist Theory

It is an application of the theory of natural selection to social, political and economic

issues. This theory asserts that economic survival is for the best fitted. The intelligent and the
white color are characteristics of qualities best fitted to survive. The poor people are most likely
to be stupid and are more likely than not to have inferior intellectual capacity.

The Theory of Capitalist

Capitalism is the root cause of poverty. It perpetuates the exploitation of the majority of
the people. The capitalistic class structure, the private and corporate power, and the self-
distinctive tendency of the rich people perpetuate poverty. The poor are always sacrifices for the
benefit of the technological progress.

For instance,

Producing and distributing goods (the land, factories, technology, transport system) are
owned by a small minority of people- we refer to this group of people as the Capitalist class.
The majority of people must sell their ability to work in return for a wage or salary- we refer to
them as the Working class.

The working class are paid to produce goods and services which are then sold for a
profit. The profit is gained by the capitalist class because they can make more money selling
what had been produced. In this sense, the working class are exploited by the capitalist class.
The Capitalists live off the profits they obtain from exploiting the working class while
reinvesting some of their profits for the further accumulation of wealth.

The Dependency Theory

Poverty in underdeveloped society is the result of a colonial socio-economic structure.

The growing poverty of underdeveloped country is due to the forced incorporation of the
economy of the underdeveloped country. Developed countries need the dependent countries
cheap labour, abundant resources and locally available capital.

EFFECTS OF POVERTY

 EDUCATION

This means that a child’s background has a significant effect on their performance in
school. Children who come from low-income families are far less likely to perform well in
school.

 CHILD DEVELOPMENT

Children living in poverty are more likely to learn poor health behaviours and are more
susceptible to mental illness as they grow older. Children living in constant poverty also show
the worst cognitive development, compared to children from higher socio-economic
backgrounds. Unable to participate in social and celebratory activities which negatively impact
their self-esteem and friendship. They may feel less able to take advantage of learning
opportunities in school, which can eventually hurt their future employment prospects.

 CRIME

The Edinburgh Study of Youth Transitions and Crime found that poverty had a
significant and direct effect on young people’s likelihood to engage in violence at age 15. Even
poor individuals were more likely to engage in violence which means that for certain types of
young people, living in poor household increases their risk of engaging in violence beyond what
one would expect.

 LOW SOCIAL MOBILITY

Children born into poverty are also more likely to grow up to be poor. When parents
cannot find stable work, they are unable to provide their children with necessary attention and
resources. This ultimately makes it more difficult for them to build a better life for their
children in the future.

 EXTRA SOCIAL SPENDING

When adults are unable to meet their full potential in society, they contribute less
productively to the economy. They often receive payment benefits and reduced tax revenues
which necessitates extra social spending.