[OPE-L] Poverty and Capitalism by Barbara Harriss-White

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Tue Apr 11 2006 - 11:44:59 EDT

EPW Perspectives
April 1, 2006

Poverty and Capitalism
While it may be possible to mitigate poverty 
through social transfers, it is not possible to 
eradicate the processes that create poverty under 
capitalism. Eight such processes are discussed: 
the creation of the preconditions; petty 
commodity production and trade; technological 
change and unemployment; (petty) commodification; 
harmful commodities and waste; pauperising 
crises; climate-change-related pauperisation; and 
the unrequired, incapacitated and/or dependent 
human body under capitalism. Ways to regulate 
these processes and to protect against their 
impact are discussed.
Barbara Harriss-White

The 21st century has witnessed an impoverishment 
of the concept of development. From its start as 
a project of capitalist industrialisation and 
agrarian change, the political direction and 
social transformation that accompany this process 
- and the deliberate attempt to order and 
mitigate its necessary ill effects on human 
beings and their habitats - development has been 
reduced to an assault on poverty, apparently 
driven by international aid, trade and financial 
agencies and festooned in targets. At the same 
time, the concept of poverty has been enriched by 
being recognised as having many dimensions - 
monetary/income poverty, human development 
poverty, social exclusion and poor peoples' own 
understandings developed through participatory 
interactions [Laderchi et al 2003].
But though it is much measured, there is little 
theory of the condition of poverty. The choice of 
a poverty line of $1/day as a state to be 
eradicated is well recognised to be an arbitrary 
goal. The most robust modern theory has been 
supplied by philosophers who have defined 
development as "freedom to be and do" and have 
examined poverty as deprivation in the spaces of 
individual capabilities and functioning [Sen 
1999; Nussbaum 2000]. In their focus on 
individuals however - their well-being, their 
rights, freedom, full humanity and dignity - the 
philosophers of poverty risk losing the 
connection to the material project of 
industrialisation. Already half a decade ago, the 
United Nations signed up to a set of targets - 
the Millennium Development Goals (MDGs) - 
representing aspirations to assault several 
dimensions of poverty through "development 
partnerships" and last year, the Commission for 
Africa issued a strong statement that the 
solution to Africa's intractable poverty was the 
expansion of business. Effectively this means 
that capitalism is to be the major "development 
partner" of the poor. But we have not yet come 
full intellectual circle because, in being 
stylised as "business" - and commonly also as 
"markets" and "economic growth", capitalism is 
robbed of its logic, its institutional framework 
and its dynamic.
In this paper I examine the idea that the poverty 
cannot be eradicated; that on the contrary 
poverty is continually being created and 
recreated under the institutions of capitalism. 
Capitalism is a mode of production in which 
capital - in the form of money and credit, 
physical machinery, stocks of goods and labour - 
is privately owned. Production is for sale, 
labour is for sale, sale is mediated through 
money. The owner of the means of production, 
often operating through specialised managerial 
labour, controls the hiring and firing and 
working conditions of labour, the choice of 
technology, the commodities produced and the 
exchange of the output. This owner has access to 
credit from specialised financial institutions, 
even though he may contest its control. An 
employer's control over capital takes place in 
the context of competition for market shares. 
This competition forces the capitalist to adopt 
new techniques which cut costs, and to accumulate 
in order to invest in new techniques. Labour 
contests the wage-profit relation, and 
governments seek to incentivise, regulate and tax 
capital [Bottomore et al 1985].
States may also seek to mitigate poverty, but in 
order to do so effectively the processes which 
create poverty must be openly understood and the 
- sometimes perverse - consequences of the 
various mitigating strategies on these 
poverty-creating processes must be recognised.
In arguing that poverty is created by the 
dynamics of capitalism, I am not arguing that the 
MDGs are not worthy aspirations, or that poverty 
is only created as a result of economic 
processes, or that capitalism does not create 
material wealth for working people as well as for 
capitalists; that poverty is also not created by 
non-capitalist forms of production. Since 
capitalism "bestrides the narrow world like a 
Colossus"1  it is the way it creates poverty, as 
it also creates wealth, that needs above all to 
be understood. The relative strength of these 
processes will vary across space and time. It is 
beyond the scope of this paper to examine 
struggles over the distributive share2 or the 
organisation of countervailing economic and 
political power. The purpose of this paper is to 
summarise what poor people have to struggle 
against; and the economic forces arranged against 
their empowerment throughout the world. There are 
at least eight ways in which capitalism creates 
The Transition and Institutional Preconditions
For capital to be invested productively, there 
must be a prior process of generation and finance 
of initial or starting capital. For this to be 
possible and for capital to be concentrated, not 
just precapitalist rentier classes but also 
domestic crafts and industry have to be 
destroyed, or transformed out of all recognition. 
Labour must also be dispossessed of productive 
assets and the securities and the restrictions of 
craft associations or "guilds" so as to be forced 
to work for wages. Adam Smith called this the 
"pre-history" of capital, and it involves a 
dramatic reallocation of property rights.3  To be 
forfeited, property rights need to be insecure 
and/or they are reallocated using force.4  This 
process is required for the building of 
infrastructure, physical plant, spatially 
extensive production and for the concentration of 
production of food for the industrial labour 
force, and agricultural raw materials for 
The state is the only institution which can 
ensure that the transfer and seizure of assets 
does not degenerate into mere theft and anarchy 
but leads to productive investment. Its role is 
extraordinarily difficult and it frequently does 
not succeed. It must permit this process and 
allow for the possibility that its own assets are 
also transferred.5  It must protect the private 
enclosure of common pool - and open access - 
resources. It must permit and organise the supply 
of credit and finance through reliably regulated 
banks. It must allow or directly provide the 
public goods, services and infrastructure without 
which private capitalism does not survive.6  It 
must allow the provision of - or itself directly 
provide - enforceable rules through which 
capitalist companies are regulated. It must 
protect capital and raise the resources to 
protect not only capital but also the state's own 
project of creating the institutional 
preconditions to capitalism.
The barriers to the destruction of the ties of 
labour to land and other productive household 
assets must be destroyed. The parameters of 
independent household economy must be defined or 
limited. Barriers to the spatial mobility of 
labour must also be destroyed; labour must move; 
the state must either control the movement of 
labour or decide that labour may move freely or 
allow some types of labour to move, prevent 
others from moving, and manage the tension 
between the two.
The state may be required to compensate labour 
for its displacement and dispossession, both in 
the interest of political stability and in order 
to shape the quality of the resulting labour 
force. If it does so, resources must be mobilised 
for such compensation.
Opposition to the concentration of capital and 
dispossession of labour must be defeated or 
bought off, and resources raised for this 
process. As many kinds of non-market exchange are 
involved, coercion is unlikely to be avoided. 
Since these complex institutional preconditions 
for capitalism develop over a considerable period 
of time, and since the preconditions emerge in 
uneven and mismatched ways, the process of 
dispossession of labour is sure to create poverty.
Where states fail to perform the complex roles of 
developing institutional preconditions, other 
social institutions fill the vacuum but do so in 
ways which are incomplete, arbitrary and 
localised.7  When such regulative institutions 
are firmly socially anchored, the state is 
delegitimated and/or captured in ways which make 
the establishment of the institutions of 
state-regulated capitalism - including the 
welfare of labour - even more difficult.
As the economy of a state or region is 
transformed from non- or precapitalist production 
to capitalist relations, this process may 
constitute an era of history. Marx certainly saw 
it thus, and located it in the 15th to 18th 
centuries in Britain. His term for it has been 
translated variously as "primitive", primary and 
original accumulation. But since the process is 
ongoing, original or primary accumulation may 
co-exist alongside advanced forms of capitalist 
accumulation - craft production may persist even 
as supermarkets proliferate. It can coexist 
inside a firm operating in regions at different 
stages of transformation - e g, when a 
multinational corporation evicts pastoralists in 
one site and operates under conditions of 
regulated market exchange in another. It can and 
does coexist inside a firm at one site - e g, 
when the same process is simultaneously carried 
out by wage labour under radically different 
conditions of contractual security.
Small-Scale Household Forms of Production
Along with the peasantry and the autonomous 
operation of commercial or "merchant's" capital, 
petty production has long been expected to 
disappear as capitalist development is 
consolidated.8  But there is a kind of commercial 
capitalist development under which pauperised 
production in tiny firms using unwaged household 
labour takes place using money advanced by 
specialist commercial firms on terms and 
conditions which make accumulation by the small 
firms involved the exception rather than the 
rule. It is extremely widespread throughout the 
world, and extremely persistent. In the prevalent 
absence of state regulation, this kind of 
commercial capitalism is regulated through guilds 
and trade associations as well as through norms 
associated with social identities such as 
ethnicity, religion and gender. These forms of 
regulation are effective at the cost of being 
exclusive, arbitrary, localised and incomplete. 
This persistence and ubiquity strongly suggests 
that pauperised petty production, apparently 
outside the ambit of state regulation, may not be 
a precapitalist relic in the course of being 
eradicated but may actually be intrinsic to 
state-regulated capitalism and incorporated by 
it. It may even be deliberately developed, 
because it delivers clear advantages to business 
and the state.
Market or environmental risks may be shifted onto 
independent out-workers or home-workers, or onto 
unprotected and disguised wage labour. Costs may 
be reduced by avoiding overheads, abandoning or 
never meeting employers' obligations, 
undercutting legal wage floors and replacing wage 
work by family work regulated by patriarchal 
authority relations. New kinds of low-cost labour 
may be incorporated, or old forms of low-cost 
labour may be re-incorporated (e g, rural, female 
and child labour, migrant workers). The labour 
process is controlled by avoiding the creation of 
conditions where it might be organised in unions 
and exert some countervailing power. The state's 
regulative and welfare responsibilities towards 
labour can be shed and the state's 
infrastructural responsibilities toward business 
and capital can be reduced. A developmental state 
focusing on reducing poverty would need to 
promote the opposite of all these practices.
Under this common form of commercial capitalism, 
commercial firms indirectly control production 
and most producers are involved in markets from 
which they cannot possibly withdraw without 
becoming destitute. The mechanisms of control are 
money advances, and the state's protection of 
commercial firms through the regulated supply of 
credit. Commercial firms also undertake 
productive industrial activity. Trade cannot take 
place without processing (an interruption of the 
process of circulation for productive purposes) 
or transport (the use value of things is 
materialised in their consumption and their 
consumption may require a change of location) or 
storage (preventing deterioration). By these 
means petty production - surviving through the 
super-exploitation of family labour - and 
commercial capitalism - through which capital is 
centralised and concentrated to reap economies of 
scale - are intertwined. Rather than being phased 
out, increasingly large spaces are being allowed 
for such pauperising forms of capitalist 
production. Some observers even see this form of 
production, commonly associated with the term 
"informal economy", as an anti-poverty tactic of 
last-resort labour absorption - even a sphere of 
resistance and empowerment of "the poor";9 
whereas the analysis here shows it to be a form 
of production which inherently restricts 
Capitalism and Unemployment
Capitalism does not only search for cheap and 
even unwaged labour. Two mechanisms create 
unemployment. First, technological change: 
capitalism permeates society through a dynamic 
process based on the logic of growth and profit 
in which the productivity of wage labour is 
continually enhanced by machines.10  By itself 
the elasticity of labour absorption with respect 
to growth declines - and indeed this is happening 
in agriculturally advanced regions of India 
now.11  The second mechanism concerns the ways in 
which markets make adjustments to fluctuations. 
Under capitalism, all markets are related to each 
other in ways which are structured (at the very 
least through norms about future expectations). 
In practice supply, demand, property rights, 
prices and contracts are structured in densely 
instituted and specific ways. One of the elements 
of such a structure is the physical nature and 
cultural meaning of things transformed as 
commodities. For one instance, labour is a 
commodity with consciousness, which may reflect 
on and resist contracts in markets; labour is 
also not produced for sale. For another, money is 
not only a commodity but also a stock of wealth. 
As a result, its value vis-a-vis other 
commodities is, and must be, stickier. It will 
change more slowly than commodity prices do. As 
Patnaik (2005) has recently argued, it then 
follows that excess demand between money and 
commodities requires quantity adjustments in 
commodities and labour. So the dynamic of 
capitalism requires there to be idle capacity in 
machinery and plant, cash balances and 
unemployment regardless of the impact on labour 
of technological change.
The result is the creation of pools of unemployed 
labour.12  Some people float in and out of work 
while others are seasonal migrants and a 
particularly stagnant pool is filled by those 
without work for long periods. These reserves of 
unemployed people are functionally useful to 
capital since their very existence disciplines 
and disempowers those in work, discouraging them 
politically from struggles over the distribution 
of wages and profits - which might result in 
their being deprived of livelihoods - and 
depressing the wages of workers by their mere 
existence. In the absence of state intervention, 
they reproduce a system which is self-reinforcing.
For political stability as well as welfare 
reasons, states need to control the rate of 
labour-displacing growth, but it is a very 
difficult task. The infrastructural preconditions 
for capitalism must be guaranteed. To keep 
capitalism competitive states also need to 
enforce the weeding-out of unproductive and 
wasteful forms of investment, to make some 
provision for the results of risky innovation, to 
make sure institutions are in place to manage 
information and technological change and to 
establish means of challenging the tendency to 
centralisation, concentration and monopoly.13  At 
the same time, as Mushtaq Khan (2004) has pointed 
out, states require resources and authority to 
maintain political stability and to set economic 
limits to unavoidable political compromises.
Among this armoury of interventions, states may 
mitigate the poverty of workers by regulating 
wages, the length of the working day and the 
minimum rights of labour. They may provide 
healthcare and education as public goods in order 
to help supply the appropriate quality of labour 
needed by capital at any given stage. By various 
social security policies the state determines the 
manner in which unemployed people regulate the 
political assertiveness of those in work. Social 
security policies also reduce the vulnerability 
of those in work to shocks of ill health and 
enable them to return to work. Social policy may 
be understood in part as an economic policy for 
Without such regulation, capitalism seeks to 
maximise profit and to displace labour. Some have 
termed this the creation of waste people [Bauman 
2004] - but they are not entirely "waste" for 
capitalism because, although they constrain 
demand for commodities, their existence 
disciplines those in employment. A key question 
for the state is therefore the extent to which it 
mitigates the poverty of waste people and reduces 
their threat to the labour force.
Role of Commodification
While industrial and commercial capital 
centralises and concentrates itself through the 
exploitation of scale economies and through 
primitive means, another process is at work which 
has the capacity to offset the process of 
labour-displacing technological change. This is 
the process of commodification under which 
capital invades domestic work carried on outside 
the money economy - uncommercialised services, 
the physical and emotional needs of the body 
(whether labouring or not), the non-market 
activity of the public sphere, and the non-market 
disposal of waste - and turns it into 
commodities. The process of converting work for 
direct use into wage work is commonly introduced 
through paid-for services.
These are then displaced by standardised 
mass-produced commodities, including commoditised 
services. Labour-intensive at the start, their 
production is subject to the same laws of 
technical change, labour displacement and 
economies of scale, under which capital strips 
itself of unprofitable tasks. Not only do such 
commodities and services require wage work to 
generate the incomes by means of which they are 
demanded, they also require labour time for their 
purchase, use and maintenance. This remaining 
unpaid labour time is shed from the firm and 
transferred to the consumer. Ursula Huws has 
called it "consumption work" [Huws 2003]. Waves 
of new commodities and commodified services in 
information, repair and maintenance, etc, are 
Commodification creates employment but the 
process is gendered. It is becoming evident that 
there is no equalisation of the wage in a 
capitalist labour market. Returns to labour are 
differentiated. Service labour is generally 
poorly paid and very often female.
As commodification intensifies its grip, public 
expectations based on a culturally-defined 
standard of private consumption become 
generalised. Wages are the compulsory 
precondition of these naturalised - but ever 
growing - levels of consumption. An inability to 
achieve the required consumption level means 
relative poverty.
Commodification is also associated with absolute 
poverty. In the conditions of petty production 
and commercial capital under which accumulation 
is blocked for the former and heavily focused 
towards the latter, petty commodification 
proliferates [Harriss-White 2005a]. The credit 
and exchange relations, the forms of 
super-exploitation of household labour 
(celebrated as "efficiency" in orthodox 
economics) and the denial of access to 
state-regulated incentives, all of which prevent 
accumulation, themselves preserve the supply of 
labour to a low-wage service sector. Wages are 
relatively low here because the alternative is 
unwaged petty production. At the same time these 
constraints to accumulation mean that demand for 
mass produced goods and services is constrained. 
Petty commodification is a process of capitalist 
development which is difficult to eradicate even 
when the form of petty commodity production faces 
competition from mass production, which - we saw 
earlier - was confidently predicted to destroy it.
Production of Pauperising Commodities and Waste
The capitalist mode of production is indifferent 
to the social consequences of the commodities it 
produces. There are many ways in which 
commodities are socially harmful. Society may be 
injured by commodities in their consumption (e g, 
weapons, tobacco and alcohol) or by 
uncommodifiable by-products which are dangerous 
to humans and other forms of life (e g, nuclear 
waste, pesticide residues, waste which permeates 
and contaminates water tables).
In damaging and incapacitating human bodies, 
these processes and these commodities create 
poverty - unless the state classifies injured 
workers as deserving of support, and underwrites 
their reproduction as injured beings. States have 
to raise revenue and incur expenditure if they 
are to deal with damaging commodities and 
by-products and the damaging effects of commodity 
consumption. Paul Sweezy [Lebowitz 2004] was 
among the most prominent to argue that, instead 
of dealing with these inevitably damaging aspects 
of capitalism, in the 20th century, states 
appropriated surplus and allocated it to 
military-cum-nuclear expenditure. This then 
reinforces the need for capitalist societies to 
deal with commodities which damage people.
Crisis and Poverty
Both in theory and in practice capitalism is 
associated with crises which may pauperise 
various fractions of society. In theory, crises 
are caused by the clash of the logic of 
accumulation and profit (leading to 
overproduction), and that of the demand for 
commodities and the distribution of wages 
permitting such demand (leading to 
under-consumption). A further tension exists 
within profit between its use in consumption 
(creating demand) and its use for productive 
investment. These are delicate interdependencies 
and shocks to them may have far-reaching 
The current era is one in which the movement of 
capital is global, while regulation is done by 
states. When currencies compete, states must 
manipulate interest rates so as to attract 
investment when exchange rates are weak. When 
risk is factored into the determination of 
interest rates, they rise. The accumulation of 
large-scale public debt in the biggest economies 
also raises interest rates. The current era is 
thus one in which returns to finance capital 
exceed returns to real economic growth [Altvater 
2001]. Meanwhile many countries must export 
primary commodities to repay debt and pay for 
imports, commodities whose real prices fall (on 
coercively liberalised product markets) while the 
price of fossil energy - the key import - rises. 
Financial markets are inherently unstable because 
of the diabolical combination of necessarily 
incomplete information and herd behaviour 
[Fitzgerald 2002]. Under conditions of sudden 
mass exit, currencies collapse, the burden of 
debt service becomes so ruinous that states have 
to take it over, and import prices rise, inducing 
inflation. These conditions require a surge in 
exports to rectify the financial imbalances, but 
exports collapse due to both the decline in 
assets prices and the flight of finance capital. 
A new class of poor people is created from among 
those who saved as well as those made redundant. 
The global institutions through which finance 
capital is regulated will bail countries out only 
on condition they adopt austerity measures, which 
compromise the capacity of the state to help the 
old or new poor.
The result is the proliferation of informalised, 
subsistence-oriented petty production and trade; 
threats to the security of property; parallel 
systems of protection and governance; a reversion 
to primitive forms of exchange and the 
development of non-market social structures as 
instruments of economic regulation. The state can 
protect its population from such crises only by 
capping interest rates, creating employment and 
supplying social security. It is unable to do any 
of this without sovereignty to regulate finance.
Environmental Destruction and Poverty
While in logic it is possible to conceive of 
capitalism based upon renewable energy, in 
practice it is path-dependent on fossil energy. 
The tendency to increase labour productivity 
requires ever more matter and energy. It produces 
ever more physical waste and useless forms of 
energy. Its tendency to concentrate and 
centralise ownership does not prevent the 
dispersal of production sites and of waste but 
development as a process of catch-up is now 
understood to be a thermodynamic impossibility 
[Altvater 1993]. Indeed the petty commodity forms 
of capitalism make sense as means by which 
capital polices its own ecological limits. To see 
how the general argument pertains to poverty, the 
analysis of capitalism has to be made concrete 
and instituted.
There are many ways in which the impact of 
capitalism on the environment creates poverty. 
The logic of growth involves the growth of waste. 
In theory, at the micro-level, waste may be made 
useful, commodified and create employment. There 
is a literature on waste-pickers and recyclers in 
developing countries which celebrates their 
social role [Beall 1997; Gill 2006]. In practice, 
much waste is uncommodifiable, either by virtue 
of relative prices or because of its damaging 
qualities. Such waste will create poverty through 
its impact on pollution, disease, work and 
reproductive capacity.
It is now beyond doubt that the accumulation of 
waste gases (admittedly as a part of a global 
process of industrialisation and of "heavy 
agriculture" based on fossil energy - not always 
under capitalist production relations in the 
past) is leading to planetary warming and global 
climate change. Capitalist development in one 
part of the planet creates disastrous 
environmental conditions in others far away. 
Regions producing climate change and regions on 
the receiving end of its impact may have no 
material connections through flows of 
commodities, raw materials, or labour, being 
connected only by the atmosphere. The trajectory 
of human beings affected - pauperised - by 
climate change-related disasters has risen 
exponentially. These disasters have rapidly 
become a major cause of forced migration, 
exceeding the migrations caused by conflict. It 
is conservatively estimated that one million 
people were killed outright by such disasters 
during the 1990s and that 200 million were 
pauperised by flood or drought in part induced by 
anthropogenic climate change, which now takes 
place under the dynamic of capitalism.
Capitalism's Deserving and Undeserving Poor
Capitalism sees the working human being as one 
which has physical and cognitive capacities 
compatible with capital's disciplines of 
production. Those people who are not only 
unemployed but unemployable by virtue of their 
culturally defined age (old) dependent status 
(young, sick, disabled) or reproductive status 
(pregnant/lactating) are regarded as deserving of 
dependent status. This dependent status is 
generally pauperising - and instituted and borne 
socially in a variety of ways, ranging from state 
benefits, local alms and social transfers to the 
unrewarded caring work of female household 
There is no hard division between the capacity to 
work and to have needs met, as is revealed by the 
many ways in which disabled people are 
continually reclassified and work or "leisure" 
are incentivised. These do not change according 
to the demands of labour, they respond to the 
demand for labour - as Marta Russell and Ravi 
Malhotra (2001) have demonstrated for US 
A needs-based response requires a definition of 
the standard of living for a given definition of 
the deserving poor, together with fiscal 
resources to sustain social security and 
supportive and palliative infrastructure. Such 
standards may be set for projects of relief by 
the state at such punitively low levels that "the 
poor" self-select, in which case the impact of 
such relief on labour market prices is minimised.
All societies also have a category of person who 
amounts to a social enemy whom both society and 
the state endeavour to eliminate, and whom the 
state often criminalises and deprives of 
citizenship. This category of person is 
context-specific and socially defined. In the UK 
currently, the asylum-seeker is regarded as 
unwanted labour and the terrorist is defined as 
any individual in violent opposition to the 
state. In India, lepers or survivors of leprosy, 
people with HIV/AIDS, transgressors of certain 
social norms, certain kinds of disabled people, 
certain girl children and those who have 
forfeited or simply lost their social entitlement 
to the obligation to support are rendered 
destitute, left to fend for themselves and/or 
deliberately eliminated [Harriss-White 2005b]. 
Destitute migrants lack citizenship and are 
criminalised. They die or exist through predatory 
exchange (e g, the sale of the body or its 
organs). While not all social enemies or homeless 
people are poor, most are very poor indeed. Their 
relation to capitalism is not obvious or direct. 
While in some societies, where the state provides 
no social security shield, such people act as a 
discipline on the behaviour of unemployed people, 
in other circumstances destitution defines the 
extreme limits of state protection and is used by 
the state to define and limit the tolerated scope 
of resistance. It is no good calling for action 
in the general interest or appealing to the state 
for a developmental response to destitution, for 
the general interest consists in eliminating such 
Conclusion: The Poor Are Always With Us?
Although it creates wealth, by itself capitalist 
growth is not a solution to poverty. On the 
contrary, there are many ways in which it causes 
poverty - even though that poverty may be 
exported to sites from which it is not visible, 
and bequeathed to generations, which do not yet 
exist and might well not come into being. The 
relative weights of the mechanisms through which 
poverty is created will differ among countries 
occupying different positions in the world's 
division of labour. The failure of capitalism to 
address its poverty-creating processes not only 
generates a continual material and political 
struggle but also threatens the ecosystem in 
which capitalism is embedded.
Two linked alternatives must be considered. The 
most urgent necessity to counter the poverty 
caused through environmental change by the 
dynamic of capital is a new model of 
industrialisation based upon renewable energy, on 
the contraction of standards of social 
consumption in polluting regions and on 
convergence in less polluting regions.14  This 
would require - if not new systems of collective 
property rights - at the very least entirely new 
forms of regulation and governance and new levels 
of enforcement at the global and national levels. 
Current market-mediated pollution targets and 
compensation schemes have no purchase on the 
scale of the problem.
Of course, by itself, a new process of 
development (or "model") seeking to regulate, 
minimise and equalise the impact of capitalism on 
the environment still would not avoid the other 
forms of poverty created by capitalism without a 
second set of redistributive interventions. From 
the era of the genesis of industrial capitalism 
to the present-day, the most effective proximate 
response to unavoidable poverty-creating 
processes and institutions of capitalism has been 
perfectly well known. From, Thomas Paine in the 
18th century to the International Labour Office 
in the current era, arguments have been made for 
"comprehensive systems of social security based 
on universal entitlements and funded by 
redistributive taxation", with the state 
identified as being the only agency able to 
energise such a convection system.15
Some societies have succeeded in realising the 
welfare state, after the shocks of an era of 
major economic depression and world war and in 
the face of a socialist alternative. But both the 
welfare state and the income guarantee are ideas 
deeply out of fashion with the international 
funding, aid and "development" agencies 
responsible for tackling the MDGs under 
neo-liberalism; and the material constituency 
which is damaged by current arrangements and 
which has an interest in a universal entitlement 
is comprehensively prevented from developing the 
countervailing power to claim it.16 Calls for 
poor people to empower themselves and support for 
some of them to organise, while necessary, are 
not sufficient. Such practices are not equal to 
the ways in which poverty is embedded in the 
institutions and processes of the capitalist mode 
of production. It is the strength of the 
contestation to regulate capitalism that will 
decide the levels and causes of poverty.
Email: barbara.harriss-white@qeh.ox.ac.uk
[This paper was prepared for the workshop on 
'Poverty, Empowerment and Institutions', Institut 
für Philosophie, University of Salzburg, October 
2005 and also presented to the Advanced 
Leadership Development Programme (China), Oxford 
University, November 2005 and the Global Labour 
Forum in New Delhi in December 2005. I am 
grateful to Paul Bowles, Colin Leys and Judith 
Marquand for their comments.]
  1 Shakespeare, Julius Caesar, Act 1 Sc 1 l. 134.
  2 The relation between wages and profits.
  3 The phrase is Mushtaq Khan's (2004).
  4 See Khan and Jomo 2001 and Khan 2004.
  5 Burawoy (nd) has called this process 
"primitive disaccumulation" in Russia's 
transition from communism to capitalism.
  6 These public goods may not be confined to 
non-rivalrous and non-excludable activity but 
will include goods about which there is a 
political consensus that they be public; and 
attacks will continually be made on them by 
private capital since they form stable and 
lucrative fields of accumulation.
  7 I have tried to explore the regulation of 
India's informal economy through kinds of social 
identity in [Harriss-White 2003].
  8 Petty production was acknowledged by Marx to 
persist outside the regulative framework of 
capitalism as industries, some of whose branches 
are either not yet carried on with the aid of 
machinery, or do not as yet compete against 
machinery and factory products [Marx 1982, p 595, 
my italics].
  9 See Alvater 1993, for the first; de Soto 1989 
and Dasgupta 2002 for the second.
10 Comprehensive data has been collected on this 
tendency worldwide by Angus Maddison (1995).
11 Sen 2002.
12 Marx called this unemployed potential labour the "reserve army".
13 This is a process which generates galloping 
inequality in the current era. The 10 richest 
people on earth have a combined net worth of 
$ 255 bn - roughly 60 per cent of the income of 
sub-Saharan Africa. The world's 500 richest 
people have more money than the total annual 
earnings of the poorest three billion (see 
sources in Monbiot, Guardian, January 11, 2005).
14 This is the project of Aubrey Meyer (1998), 
'Contraction and Convergence'; but how it is to 
be achieved under contemporary capitalist 
conditions is not established, for it involves a 
60 per cent reduction in greenhouse gas emissions 
and the establishment of a global average per 
caput to which advanced countries would reduce 
and underdeveloped countries grow.
15 See G Stedman Jones, 'A History of Ending 
Poverty', The Guardian, July 2, 2005 and 'And End 
to Poverty?' 2004, summarised in Bernstein 
(forthcoming). See also Standing (2004).
16 The commodification of pensions has been an 
extremely powerful way in which capitalism has 
emasculated labour dissent and made labour 
complicit with capital. As life expectation 
grows, as old-age provision - both income streams 
and all aspects of daily living - is 
commercialised, privatised and ever more risky 
and as minimum social consumption standards rise, 
it is irrational to take action which jeopardises 
the security of the second most vulnerable period 
of human life.
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- (2001): 'The Growth Obsession' in Panitch and Leys (eds), pp 73-92
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2003 and 2004



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