From Poverty to Power Green, Oxfam 2008 - weman

FROM POVERTY TO POWERpicture it offers of the world: that of people and institutions asindividual actors relentlessly pursuing their own self-interest.Assuming human society to consist of atomistic, utility-maximisingindividuals with fixed preferences enables neoclassical economists todevelop the complex mathematical models that give their disciplinethe appearance of an ‘objective’ science. Such models in turn allowpolicy makers to make predictions – implement policy Y and theeconomy should grow by X – which then justify the allocation ofscarce resources, although economists themselves often place heavyhealth warnings on any effort to predict the future.The assumptions behind these models often ignore the complexitiesof real life, in which attitudes, beliefs, and social and political relationsinfluence behaviour as much as does individual self-interest. 3 Marketsare often assumed to be natural, when in fact they are governed bydetailed rules on contracts, access to credit, competition, collectivebargaining,and so on.Such rules are not arrived at in a political vacuum:they reflect the relative strength of those involved in, or excludedfrom, negotiating them. Prevailing attitudes about the value of particularwork are also fundamental, and are often unquestioned byconventional economic thinking.By making income a proxy for utility (or happiness), the neoclassicalapproach views development primarily as being about generatingrising incomes, and sheds little light on how markets can achievedevelopment in the broader sense, based on rights and dignity. 4 Evenwithin the realm of income, the conventional view focuses on absoluterather than relative incomes, either at a national or individual level,thus often downplaying issues of equity. 5 In this view of the world,poverty reduction takes place as a spin-off of wider economic growthand redistribution, as an afterthought rather than as a central tenet ofeconomic policy making.Two essential shortcomings of the use of mainstream economicsin development are, first, its failure to measure and value unpaid workin the home, rearing children or caring for the sick and elderly; andsecond, its tendency to downplay environmental degradation. Bothfailings spring from a reluctance to engage with the non-monetaryeconomy, and both must be remedied if policies are to achieve environmentaland social sustainability.110