Perils of Poverty


September 13, 1992|By FRANZ SCHURMANN

According to the latest Census Bureau figures, 35.7 millio people -- or 14.2 percent of the U.S. population -- are now poor. Of those, 40 percent are children below the age of 16. That suggests the possibility that a few decades from now the poor could once again become the majority in this country -- unless government intervenes to reverse the poverty rate.

History shows many examples of nations which fell from general prosperity to pervasive poverty, among which China is possibly the most striking example. In the 18th century, China was so prosperous that it was the envy of European travelers. But not far into the 19th century it became one of the poorest nations on earth.

Historians of China cite many causes for this precipitous fall, but one stands out: Highly educated, self-satisfied ruling elites who refused to see the threat posed by the rising mountain of poverty.

The elites' forbearers had, in 1664, created one of China's most successful dynasties, the Qing. Its land policy brought about rural prosperity based on a widespread, land-owning, small farmer class. There were still plenty of poor in 18th century China, and there were peasant rebellions. But by and large people believed that prosperity would continue and spread.

By the early 1800s, however, elite concerns had become mainly cultural. They preferred to immerse themselves in the highly refined arts and scholarship that the dynasty had fostered rather than to worry about irrigation dikes crumbling and threatening entire economies. Poverty mushroomed as a result, culminating in the bloody Taiping Rebellion (1837-1854) which almost toppled the Qing.

Judging from the current U.S. election campaign, today's elites (with the exception of Jack Kemp) have little to say about poverty. The Democrats talk of creating jobs and raising skill levels, but their aim is mainly to improve America's competitiveness in the world market. The key beneficiaries of their reforms would be largely middle-class people.

The Republicans are stuck in their trickle-down mind-set and simply assume that as the current recession ends, a rising tide will lift all boats. But the rapid spread of low-wage jobs indicates that a new business surge would do little to reverse the rising poverty rate. Even now 40 percent of the poor over age 15 work, and nine percent have full-time jobs.

China was in turmoil for more than a century. Today China's aging leaders understand that to avoid even worse turmoil, the government must face up to the nation's poverty. China's poverty is mainly of rural origin, so reform began in 1979 with a shift from collective back to small family farming.

Recently the leadership has been encouraging the formation of small industries located in towns close to rural areas. According to official figures, these industries now employ some 100 million. This means that fewer people are pouring into the cities and XTC creating seedbeds for upheaval.

If these policies really do work as Beijing touts them, it means the Chinese octogenarians understand something many American policy makers have forgotten: that the poor are a resource, not just a maelstrom around the neck of the economy.

One exception among U.S. policy makers is Housing and Urban Development Secretary Jack Kemp, whose enterprise zone idea aims at employing idle inner-city labor while making a profit for the entrepreneur. If more aggressively pursued, this policy could have substantial inner-city results. The skillful use of defense policy in earlier decades to uplift areas of chronic unemployment shows what government can really do to fight poverty.

If Bill Clinton should win in November he could adopt Mr. Kemp's ideas but beef them up with the power of government, something Republicans have been loathe to do. After all, it was the Democratic President Lyndon Baines Johnson who in 1964 wrote into the Economic Opportunity Act a commitment to eliminate all poverty in the U.S.

The United States has something to learn from China, which for more than 2,000 years (though with interruptions), remained one of the most prosperous and stable countries in the world. The lesson is that government, avoiding the extremes both of totalitarianism and laissez faire, does best by its people when it intervenes actively to make certain that poverty never gets out of hand.

Franz Schurmann, author of several books on modern China, teaches history and sociology at the University of California, Berkeley. He wrote this commentary for Pacific News Service.

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