“Moving from an economy driven by the search for maximizing profits to a human rights economy is possible and, to remain within planetary boundaries, necessary” says Olivier De Schutter, the Special Rapporteur on extreme poverty and human rights, in his Eradicating poverty beyond growth report (May 2024). The report explains the misconceptions between economic growth measured in gross domestic product (GDP) and its ability to eradicate poverty. By doing so, the Special Rapporteur posits a different way of tackling poverty that decouples solutions with continued economic growth and consumption that harms the most vulnerable groups in society, and the planet on which our economies rely on.
Human Level’s Take: Today, 670 million people (8.4% of the world’s population) live below the international poverty line of $2.15 a day at 2017 purchasing power parity. Current approaches to eradicate poverty, which typically focus on increasing economic output (measured in GDP) and redistributing wealth through taxes, clearly aren’t working. Is there another way of looking at poverty that would allow us to develop more innovative solutions to more effectively tackle this issue? The UN Special Rapporteur on this topic, Olivier De Schutter, says yes. Poverty is more multidimensional than it is currently perceived. It goes beyond a lack of income alone to include deprivations in educational attainment, educational enrolment, drinking water, sanitation and electricity, as well as social exclusion. In addition, a growth-at-all cost approach undermines the very foundations of a productive economy we strive for. For instance, this economic model has led us to cross six of the nine planetary boundaries ensuring Earth’s stability and ability to support life on this planet. Olivier puts forward a new economic model which goes beyond profit maximisation at cost to people and planet to one that is rights-based, just and equitable and discourages short-term gains.
Key points from the report:
- What does poverty mean?: Poverty is often defined as lacking the income required for an adequate standard of living and it is this definition that is used to monitor progress towards the eradication of poverty. For instance, 670 million people (8.4 per cent of the world’s population) currently live below the international poverty line of $2.15 a day at 2017 purchasing power parity. While there are advantages to measuring poverty in absolute numerical terms, a money-centric approach to poverty fails to capture the experience of persons in poverty. Alternative multi-dimensional approaches to poverty also looks at deprivations in educational attainment, educational enrolment, drinking water, sanitation and electricity. In addition, approaches to poverty should also capture the reality of social exclusion, which may result from the inability to meet social expectations, such as the need to organise decent funerals for parents or pay for extracurricular activities for a child. Therefore, the dominant approach to poverty eradication, which focuses first on fuelling economic growth and redistributing wealth through taxes and transfers, is insufficient because it fails to capture the multi-dimensional nature of poverty beyond deprivations of income. Moreover, this endless quest for growth restricts political imagination and, as a result, “more promising avenues for development, which could contribute better to human well-being and the realization of human rights, are insufficiently explored.”
- Three main pitfalls of the current model of economic growth: The report delves into how the current economic model of endless growth and consumption undermines the very foundations of a productive economy. Due to this model, we have already crossed six of the nine planetary boundaries defining Earth stability and life support conducive to human welfare and societal development. We also undervalue socially useful work such as domestic and care work, which is vital to the productive economy. Approximately, 16.4 billion hours are spent each day on direct personal care of young children or older relatives and indirect care activities, such as cooking, cleaning or collecting water or fuelwood. If that contribution were to be remunerated on the basis of the minimum hourly wage, it would represent 9 per cent of global GDP. In addition, the commons - collectively managed resources and institutions - are being privatised by governments and market forces, leading to maximising corporate profits at the expense of local communities and the exploitation of resources.
- Moving from the profit-driven economy to the human rights economy: The report states that moving towards a post-growth future “means democratically planning a transition towards an economy that will reduce its addiction to growth, in a way that contributes to the realization of economic, social and cultural rights and to the reduction of inequalities.” In addition, strengthening democracy, especially participatory forms of democracy, is necessary for this transition because it allows people to question assumptions about the correlation between growth and wellbeing. The report goes into five priorities to move toward a human rights-based economy. These are: 1) stimulating the social and solidarity economy. This includes companies who produce goods and services to fulfil their social mission and address community needs. In this type of economy, companies are discouraged from allocating capital based on short-term gain and from accumulating wealth or financial speculation. Rather, any surplus generated will either be reinvested in the company or implicitly reallocated through, say, its purchasing or sales policy; 2) democratising work, where workplace democracy should be encouraged in all companies including in the non-profit sector. In an economy where workers are given opportunities to shape the strategic decisions of the company, this will make it less likely that companies will outsource highly polluting segments of supply chains to countries where environmental regulations are non-existent or weakly enforced; 3) sharing employment, including shortening working hours that will then reduce the pressure of economic activities on ecosystems; 4) combating consumerism through, for example, introducing a right to repair and banning planned obsolescence of goods; and 5) providing universal basic services alongside guaranteeing the right to living wages, including adequate housing, health care, nutritious food through school meals, water and energy, transport and digital access.
