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4 Things You Probably Know About Poverty That Bill and Melinda Gates Don’t

To fix global poverty, you first need to acknowledge where it comes from.

[Top photo: Don Mammoser via Shutterstock]

Bill and Melinda Gates just released their annual letter, "Our Big Bet for the Future," with their thoughts on the current state of global poverty and the suite of projects they are funding to tackle it. While their hopeful tone and a good deal of what they are proposing is excellent, the story they tell about poverty obscures far more than it reveals. These are not "big bets," but rather small technical fixes that can’t solve the real, underlying problems.

This matters, because the Gates have an incredible amount of power to go with their wealth. What they say carries tremendous weight with policymakers and affects what millions of people think. If their story is accepted, we all get tricked into accepting relatively small actions as solutions to big problems.

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Their basic story goes like this: we can break the cycle of poverty—the big bet—by introducing new elements into the mix, like mobile banking, more vaccines, and different agricultural technologies. They say that by taking actions like this, extreme poverty can actually be eradicated by 2030. But they leave out anything to do with why it exists in the first place, and who and what causes it, and so end up ignoring the things that matter most to actually breaking the cycle of poverty.

Here are four of those things that you probably know, that it seems Bill and Melinda Gates don’t.

Poverty Fact #1: Poverty is made by people. It is not just part of nature

Greece provides a clear and present example of this. Under EU-imposed austerity put in place in hopes of stabilizing the economy—which, among other things, slashed spending on social services, laid off tens of thousands of government workers, raised taxes across the board and and cut the minimum wage—unemployment shot up from 8% in 2008 to 28% in 2014, while wages plummeted. A humanitarian catastrophe followed, with hospital closures, lack of medicines, and widespread homelessness. Now 44% of Greeks live below the poverty line, up from 20% in 2008. Even middle class citizens have been forced to resort to soup kitchens.

Similar stories can be told about Spain, Portugal, Italy, Ireland, England, and even the United States. No one is under the illusion that any of this is a natural phenomenon, which is why people are starting to vote for dramatic change.

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The Greek experience isn’t uncommon; it’s just that it has until recently been uncommon in the West. People across the global South have been on the receiving end of such policies for decades. In the past it was called "structural adjustment" and was spearheaded by the IMF and World Bank, with devastating consequences. They argued that, through aggressively pro-business measures like privatizing essential services and structuring economies so that debtors are paid off before the population is taken care of, they could kick start economies. Today, we call that agenda "austerity." The effects are the same.

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Poverty doesn’t just exist; it is created. So when the Gates treat it like a naturally occurring problem—by leaving out any mention of what’s causing the problems in the first place and instead focusing exclusively on new technical interventions and big bets for the future—they’re telling a story without any of the main characters present. It would be like a football coach saying that understanding what helped the team win or lose last week, or the ongoing fitness of the players doesn’t matter; we just need better technology and a bigger crowd of supporters this week. In other words, it helps makes small technical interventions sound adequate when they are not.

Poverty Fact #2: History matters

In order to understand the causes of poverty we have to understand history. Before the 1500s, there was no discernible difference between the West and the rest of the world in terms of human development. The impoverishment of the global South began first with the plunder of Latin America, followed by the Atlantic slave trade, then the British colonization of Asia and the European scramble for Africa. This architecture of wealth extraction was essential to Western development.

Later, neoliberal policies—like the deregulation of capital markets, privatization of essential services, elimination of social and environmental protections, and a constant downward pressure on both corporate taxation and workers wages—were imposed across the global South, mostly by way of western-supported dictators and the structural adjustment we mentioned above. This turned into the biggest single cause of poverty in the 20th century, because it created both the incentives and the systems required—like tax havens—for wealth and power to be centralized in the hands of the elite. Today, the process of wealth extraction continues in the form of tax evasion, land grabs, debt service, and trade agreements rigged in the interests of the rich, a reverse flow of wealth that vastly outstrips the aid (the epitome of a small, technical fix) that trickles in the other direction.

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It is no surprise, then, that the fortunes of rich countries and poor countries continue to diverge. Or that the richest 1% have managed to accumulate more wealth than the rest of the world’s population combined.

By leaving this history out of their grand story of poverty, Mr. and Mrs. Gates are either saying it isn’t true, or it doesn’t matter.

Poverty Fact #3: The "good news" story is premised on false accounting

The "good news" narrative that the Gates rely on asserts that humanity is making remarkable progress against global poverty. People who hold this view insist that aggregate wealth is a legitimate proxy for well-being. Thus, because global GDP has grown an astonishing 635% since 1980, we have never been better off overall.

Close on the heels of this come claims that the number of people in extreme poverty is declining so dramatically that we should all believe that it will soon—i.e. by 2030—be eradicated. The World Bank, the governments of wealthy countries, and the UN Millennium Campaign all agree on this narrative. Relax, they tell us. The world is getting better, thanks to the spread of free market capitalism and western aid.

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It is a comforting story but unfortunately it is just not true. For a start, it all rests on The World Bank’s $1.25-a-day poverty line, which is insultingly low. The UN body UNCTAD has pointed out that anyone living on less than $5 a day is unable to achieve "a standard of living adequate for health and wellbeing": the inalienable right enshrined in the Universal Declaration of Human Rights. If you use that figure, a soul-scorching 5.1 billion people, or 80% of humanity, are living in those conditions today.

Poverty Fact #4: Power matters

All of this is about politics and power. It’s a well-established truth that those with the money make the rules, usually in ways that serve their own interests. This is why 93 cents of every $1 made since the 2008 crash has gone to the 1%.

The Gates want us to believe that it’s possible to solve poverty without challenging the forms of power that caused it in the first place. It sounds nice, especially for rich people, but it’s a fairy tale. Solving poverty will require a fundamental reorganization of power away from the oligarchy and toward real, meaningful democracy. Any plan to end poverty that doesn’t put this front and center isn’t really a plan at all.

By relying on cherry-picked evidence, the Gates promote a rosy picture of recent progress in order to make the case for more of the same into the future. In other words, they want us to accept that more unregulated neoliberal capitalism is the answer. No need for better, more representative politics, more sustainable economic models, or constraints on corporate control of national and international governance.

There are plenty of alternatives. A movement is underway to create genuinely new economic thinking—one that is based in the rigorous sciences of human social systems and complexity research. It has been quietly taking form for decades in various academic departments. Groups like the Santa Fe Institute and Institute for New Economic Thinking have vigilantly explored the need to incorporate real human nature with a grounding in systems thinking to create effective social policies.

We might have had to settle for small technical fixes 30 years ago. In 2015, we certainly don’t. So much more is now known about the structural causes of poverty that it is possible to get at the real roots of the problem. Doing so will require that a lot more people know the facts about poverty creation, something we hope Bill and Melinda Gates also learn as they continue to grapple with this thorny problem along with the rest of us.