Dominic Fairfax Forum
Dominic Fairfax Forum

THE POVERTY INDUSTRY

The term ‘poverty industry’ refers to a wide range of money making activities that attract their business from the poor and disadvantaged. An example of this is ‘payday lending’. Payday lending has grown rapidly in both the United States and the UK. You have probably seen them advertised on television. People who resort to borrowing from them are typically young or low income families with very few assets. They are the people who are unable to secure normal, lower interest-rate forms of credit. Payday lenders are becoming more prevalent in deprived areas than McDonald’s and Burgerking. The idea is that you have an urgent bill that you must pay today. Perhaps you are being threatened with court action. Your wages are not due for a couple of weeks so you take out a loan against them. In desperation, the poor individual agrees to pay interest on the loan which can be up to 4000%.  The borrower never gets out of debt. He can never be free.  It escalates beyond all reach and all because the borrower does not even earn enough money to pay for his subsistence. He never has any capital. Capital is money that you have left over in any given month after you have taken care of your subsistence necessities.

 

Many entrepreneurs, pro-establishmentarians and those who have little experience in the spheres of deprivation in stratified societies will state “Ah but they do have a choice.” Actually no they do not. Theoretically they do but living relatively impoverished lives does not facilitate theoretical abstractions.  In the US the poverty industry makes approximately 33 billion dollars per annum.  Other businesses in the poverty industry include pawn shops, betting shops, amusement arcades and pubs  in run down towns, cash-converters, ‘cash for gold’ and credit card companies. Walk through any impoverished town and you will see such venues all around you. Illegal ventures such as loan-sharking, drug dealing and sex trafficking are also included in the poverty industry.

 

In the impoverished areas of London, Sussex and Kent we have met numerous people who, by virtue of credit, are able to purchase computers to assist their children with their studies. Within a few months or even weeks however, they are compelled to take them to cash converters in order to pay their utility bills. Horrendous anecdotes have been conveyed regarding a company by the name of Brighthouse which extracts extortionate rates of interest from its customers. One young woman with a small child stated:

 

I couldn’t afford a TV for myself and my little girl. I had a bad credit rating due to debts incurred from previous hardship. I managed to purchase a TV from Brighthouse recently. I still have it. It is worth about £300. I have just over two years to pay for it. Over that time, I will have to pay approximately £1,900 for it. They make you pay insurance too. In 2007, I didn’t have anything comfortable to sit on. I couldn’t afford to buy a suite. I eventually purchased two, two-seater sofas from Brighthouse worth about £400 each. Over the space of 3 years I paid almost £4000 for them and they weren’t even all that comfortable. You have to pay weekly. People queue up to pay. Often, the queues are right outside the door and along the street. They are scared. If you can’t afford to pay one week you have to pay double the next as well as a penalty.


The poverty industry is also applied to a variety of bodies which many consider would be quite unnecessary in their current enormity were it not for the socially disadvantaged. For example, there has been increasing criticism of the view that professionals provide valuable services to society. In his book More Equality, the sociologist, Herbert. J. Gans, states that:

 

Poverty creates jobs for a number of occupations and professions that serve the poor or shield the rest of the population from them. These include the police, social workers, probation officers, psychiatrists, doctors and administrators who oversee the poverty industry.


Poverty creates jobs. In Britain, the social services system employed some 100,000 staff and the cost of administration amounted to over 800 million. Herbert. J. Gans suggests that ‘however altruistic their motives, those employed to deal with the poor have a vested interest in poverty.’

 

Synonymous with the above is that in his book, Medical Nemesis, Ivan Illich unleashes an attack on the medical profession. He claims that, ‘The medical establishment has become a major threat to health.’ He argues that it should be obvious that the environment is the main determinant of human welfare; Quality food, decent housing, emotional stability, green pastures, sufficient wages, intellectual stimulation and good education are common sense prerequisites for human beings. People cannot secure such environments if they are not paid sufficient wages. The result is that they become ill. Ivan Illich further states that much of the illness, including mental illness in contemporary society is due to poverty in its many guises.

 

The sociologist Herbert Gans agrees. He postulates that ‘Poverty is useful to a number of groups in society. It benefits the non-poor in general and the rich and powerful in particular. They therefore have a vested interest in maintaining it.’  Every economy has a vast number of boring, dead-end, dirty and dangerous and meanly paid jobs.  There will always be an excess of people available for such jobs due to the fact that most people are not born into wealthy enriched backgrounds where parents can facilitate ensuring their children are streamed towards the more powerful and fulfilling occupations. The existence of poverty ensures that such menial work is done. He continues that …‘poverty functions to provide a low-wage labour pool that is willing – or rather, unable to be unwilling - to perform dirty or monotonous work at low cost’. Without the low paid, many industries would be unable to continue in their present form.  Gans claims that the catering industry, hospitals, health centres, large sections of agriculture and parts of the garment industry are dependent on low wage labour. Raising wages would increase costs with ‘obvious dysfunctional consequences for more affluent people’. Thus at one and the same time, poverty ensures that dirty and meagre jobs are done and, by getting them done cheaply, subsidizes the non-poor sections of the population. Such a situation inevitably provides work for the poverty industries. Furthermore, the presence of the poor provides reassurance and support for the rest of society. They provide a baseline of failure which reassures the non-poor of their worth.

 

Advocators of this stance postulate that ‘..the minimum wage is too minimum. This inevitably causes the low-waged to get into debt.’ Anything they want to purchase such as a freezer, a washing machine, a sofa or a table costs them more than it does for the non-poor because they have to purchase consumer goods on credit. Even their electricity and gas costs them more because they have to use ‘cards’ or ‘keys’. If their roof leaks or fence blows down they have no capital to enable them to attend to it. If you can’t even manage subsistence, then how are you going to repair leaking roofs, or guttering except via loans and credit? If the usual channels of credit are unavailable to you because of default then you have no alternative but to turn to the aforementioned loaning companies in the opening paragraph.

 

Governments do little to address the poverty industries, especially loaning because the entire ideology behind capitalism and ‘free enterprise’ really is their definition of freedom. It means much more to them than freeing people from stress and exploitation. The subject class have been conditioned to play the same game. Free enterprise even involves selling weapons of violence to any nation who will purchase them. It is the illogical, hypocrisy of goverments  backing capitalism that causes them to tell people not to smoke or eat processed foods whilst simultaneously allowing the tobacco and food industries to sue and continue selling their wares. Moreover,governments receive a lot of tax from these industries.

 

Anti-establishment supporters such as Gans and Illich point out that it is imperative to understand that the poor remain poor because they are bogged down with basic survival not because of ‘defective genes’. The relatively poor are likely to include the neglected teenager, the elderly, whose social position prior to their becoming elderly did not allow for old age and increasingly, women or men with young children where the breadwinner has opted out of responsibility. The overriding factor is that they are working class or have been relegated to  ‘ workingclassness’ due to abandonment, lack of family support, insufficient earnings and/or because they have  weak or non-existent positions on the labour market. However, this would not be the case if these groups came from affluent backgrounds.

 

Many psychologists and sociologists claim that the plight of such disadvantaged individuals is deplorable. In addition, it is even more deplorable for the non-poor to be making livings off their backs. Professionals must be aware that economic and intellectual poverty and the emotional distress that this precipitates will inevitably cause physical and mental deterioration.

 

Sociologists claim that in the UK, the National Health Service acts as a buffer against civil unrest and insurgency. In socio-economically deprived vicinities a substantial numbers of angry, depressed and anxiety-ridden patients are inevitable. Without the NHS they would go beserk. Such individuals seek solace or oblivion by trying to ‘comfort’ themselves. They engage in a lot of sexual activity due to boredom, lack of career prospects and feelings of hopelessness. They have babies for the same reasons when they are most definitely not ready for parenthood. Some become involved in crime. Others suffer with alcohol and drug dependence –cocaine and heroin. Many will have eating disorders, sexually transmitted diseases, hypochondria, neurosis and often drug-induced psychosis. They live in perpetual fear of homelessness. Many children sit huddled in their cold ‘homes’ in winter due to unaffordable heating. A mother of two young boys, one of whom is disabled, stated:

 

I have a private landlord. The house is all electric and he won’t change it. My husband works full-time but it is very difficult. It costs over £100 a week just for electric.  Sometimes, we can’t afford to use the heating. I don’t know where governments obtain their figures. I don’t know of anybody who earns £25,000 per annum. I also know quite a few unemployed families. There is no way they are receiving anything like £20,000 per annum in benefits. Those who are, must be living in much nicer areas and the bulk of their benefits must be going to the landlords.


Stress renders some people unable to care for their children properly. Relationships are tense and often abusive. Abandoned, dependent women with young children, fearful of poverty will seek out new partners, sometimes several times, leaving children bewildered and lost. There will be numerous people developing high blood pressure, asthma, chronic obstructive pulmonary disorder and diabetes. Data reveals that many people living in poor areas have more medicine in their homes than food. District nurses report that a great many people are living in squalid, damp, dreary housing with insufficient amenities reminiscent of the post-war years. If Western style deprivation did not exist, neither would the need for so much medical and psychiatric intervention. ‘The poverty industry thrives on it.’ Again Ivan Illich states:

 

…..these ills of society are responsible for a great deal of the illnesses experienced by its members. In claiming to diagnose these ills via the biomedical model, doctors can do more harm than good…..such treatment is but a device to convince those who are disempowered and sick and tired of society that it is they who are ill, maladapted and in need of repair. By claiming exclusive rights to the diagnosis of illness, doctors obscure its real source.


J.Kincaid  argues that many social workers still attribute poverty to ‘…..a defective personality, an inability to relate to others, and an impaired capacity to make realistic judgements of self and others’. The social workers, who hold a lot of power in the nanny state, relay this psychobabble to the GPs ‘for information’. Not only is it nonsense but it “places the blame for poverty squarely on the shoulders of the poor. By claiming expert knowledge to diagnose individual ‘deficiencies’, welfare professionals whatever their good intentions help to retain ruling class power by reinforcing the myth that poverty is due to personal inadequacy rather than the nature of society.”  Furthermore, that unless they choose deliberate selective perception, people within the professions must be aware that for a variety of reasons, not everybody is equipped to play the capitalist game due to inequality of condition. It is therefore, devious to pretend that if groups of people are not facilitated to play that game they must be maladjusted or inundated with personality defects.  In his book, The Myth of Mental Illness, the psychiatrist, Thomas Zsasz, provides even more scathing criticism as the title of the book implies.

 

In some instances, it is unlikely that doctors would understand the poverty of those residing in ghettoes. Neither may they be conscious that their role was regarded by some, as part of the poverty industry. Their social backgrounds are so far removed from those of the socially disadvantaged that they would never be able to imagine just how much Western impoverished environments are the main cause of their patients’ hypochondria, valetudinarianism or physical and emotional illnesses. Others disagree.

 

Ralph Miliband examines the bargaining position of the poor in an article entitled Politics and Poverty.  He states that there are no organisations with the power to represent the interests of the unemployed, lone parents, the aged poor or the chronically sick. Moreover, the plight of the poor in Western Societies is further weakened by their inability to mobilise working class support. Non-poor members of the working class have a tendency to see certain individuals in their own strata as ‘scroungers’ and ‘layabouts’. Many sociological analysts state that ironically, access to credit has enabled many members of the working class to perceive themselves as middle and this has caused them to adopt an  I’m all right Jack fuck you sort of attitude. Recently, however, governments’ austerity plans in Greece, Italy, America and the UK to name a few, are pushing increasing numbers of people into hardship and protest.  Perhaps increasing austerity will enable those who previously regarded the poor so contemptuously to develop more empathy. Well, that’s certainly a possibility on which to ponder but don't hold your breath.

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