Understanding Poverty from Economic, Social, Psychological and Multi-Disciplinary Models

Poverty is a multifaceted issue that affects millions of people worldwide.

To fully understand and address poverty, it is crucial to analyze it through various lenses, including economic models, social theories, psychological frameworks, and other interdisciplinary approaches.

This goal is to ensure these models provide a comprehensive understanding of poverty, its causes, its effects, and the broad scope of its impact on society.

Economic Models

1. Classical Economics: Rooted in the works of Adam Smith and David Ricardo, classical economics suggests that poverty results from imbalances in the production and distribution of goods. Poverty is often viewed as a natural outcome of market forces and competition. Solutions focus on enhancing free market mechanisms and labour productivity.

If Adam Smith defined Economics in 1776 as a science which inquires into the nature and cause of wealth of Nations, doesn't that tell us that Poverty, the absolute opposite of wealth should be treated as an inquiry?

Solving the problem of poverty requires us to inquire into the lack of productivity and lack of growth of nations, which should also be treated as a science.

However, we must recognize that looking at poverty from an economic lens only might give us some answers, hence why we have to look at poverty from another lens.

2. Keynesian Economics: John Maynard Keynes introduced the idea that government intervention could mitigate poverty by regulating economic cycles and unemployment through fiscal and monetary policies.

According to Keynesian economics, poverty can be reduced by stimulating economic growth through government spending and adjusting interest rates to encourage investment. Much discussion has been on whether government spending reduces poverty or increases poverty.

3. Development Economics: This model focuses on the structural factors that hinder economic development and perpetuate poverty, particularly in less developed countries. It stresses the importance of investment in health, education, and infrastructure to foster economic growth and reduce poverty.

Economic Development is the process by which emerging economies become advanced economies. In other words, the process by which countries with low living standards become nations with high living standards.

Economic development also refers to the process by which the general population's overall health, well-being, and academic level improve.

During the development, there is a population shift from agriculture to industry and services.

Economic development also fosters innovation and technological advancements, creating new industries and job opportunities.

A longer average life expectancy, for example, is one of the results of economic development. Improved productivity, higher literacy rates, and better public education are also consequences.

Put, economic development is all about improving living standards. ‘Improved living standards’ refers to higher levels of education and literacy, workers’ income, health, and lifespans. - culled from https://marketbusinessnews.com/financial-glossary/economic-development/

Social Models

1. Social Stratification: This theory examines how poverty is structured through social hierarchies and classes. It argues that poverty persists because systemic inequalities allocate more resources and opportunities to certain social groups over others.

2. Dependency Theory: Particularly relevant in global inequalities, dependency theory suggests that international economic arrangements perpetuate poverty in less developed countries by making them dependent on more affluent nations. This model advocates for greater financial independence and restructuring of global monetary policies.

3. Social Exclusion Theory: This model examines poverty through the lens of exclusion from social, economic, and political systems. It highlights the importance of integrating marginalized communities into mainstream society to solve poverty.

Psychological Models

1. Maslow’s Hierarchy of Needs: This psychological model helps explain the impacts of poverty on individual behaviour and well-being. Poverty impedes individuals from fulfilling basic needs (such as safety and physiological), which hampers their ability to achieve higher-level psychological needs (like esteem and self-actualization).

2. Learned Helplessness: This concept in psychology explores how experiencing repeated failures can lead individuals to believe they have no control over their situation. In the context of poverty, such feelings can prevent people from seeking improvement in their socio-economic status, thus perpetuating the cycle of poverty.

Other Interdisciplinary Approaches

1. Socio-cultural Model: This approach examines how cultural contexts influence the persistence of poverty. It considers cultural beliefs, norms, and practices that might support or hinder poverty reduction strategies.
2. Environmental Model: Poverty is often both a cause and a consequence of environmental degradation. This model explores the vicious cycle between poor ecological conditions and poverty, emphasizing the need for sustainable development practices that address both environmental and socio-economic issues.
3. Public Health Model: Viewing poverty from a public health perspective highlights the direct links between poverty and health outcomes. Poor health limits employment opportunities, reduces productivity, and incurs high medical costs, which can further entrench poverty.

Conclusion

Understanding poverty requires a multidimensional approach encompassing economic theories, social structures, psychological impacts, and broader interdisciplinary considerations.

Each model provides insights into the causes and effects of poverty and suggests different strategies for alleviation.

By combining these perspectives, policymakers, researchers, and practitioners can develop more effective and comprehensive poverty reduction programs.

Addressing poverty holistically not only improves the economic well-being of individuals but also enhances the social, psychological, and environmental health of societies.

This multi-faceted approach ensures that solutions are robust, sustainable, and inclusive, catering to the diverse needs and challenges those in poverty face.