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Source: Herrin, 2005
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• STUDENT READER 7: Parable of the Talents
For it is just like a man about to go on a journey, who called his own slaves and entrusted his possessions to them. To one he gave five talents, to another, two, and to another, one, each according to his own ability; and he went on his journey. Immediately the one who had received the five talents went and traded with them, and gained five more talents. In the same manner the one who had received the two talents gained two more. “But he who received the one talent went away, and dug a hole in the ground and hid his master’s money.
Now after a long time the master of those slaves came and settled accounts with them. The one who had received the five talents came up and brought five more talents, saying, ‘Master, you entrusted five talents to me. See, I have gained five more talents.’ His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’
Also the one who had received the two talents came up and said, ‘Master, you entrusted two talents to me. See, I have gained two more talents.’ His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’
And the one also who had received the one talent came up and said, ‘Master, I knew you to be a hard man, reaping where you did not sow and gathering where you scattered no seed. ‘And I was afraid, and went away and hid your talent in the ground. See, you have what is yours.’
But his master answered and said to him, ‘You wicked, lazy slave, you knew that I reap where I did not sow and gather where I scattered no seed. ‘Then you ought to have put my money in the bank, and on my arrival I would have received my money back with interest. ‘Therefore take away the talent from him, and give it to the one who has the ten talents.’
For to everyone who has, more shall be given, and he will have an abundance; but from the one who does not have, even what he does have shall be taken away. ‘Throw out the worthless slave into the outer darkness; in that place there will be weeping and gnashing of teeth.’
Source:
• Matthew 25:14-30
• STUDENT READER 8: Population and the Fight Against Poverty (in the Philippines)
A. Review of the country’s demographic and poverty alleviation record
The demographic development of the country can be described in a couple of statements. There is slow decline in fertility. Slower in fact than most countries in the region, including Indonesia, which has a lower per capita income level and lower average educational achievement than us. The infant mortality performance, on the other hand, merely reflects our state of development in that it is lower than Indonesia because we have a higher per capita income than them and higher than Thailand because we have a lower per capita income than them.
In terms of our poverty alleviation record, meanwhile, only modest gains have been achieved in the last 15 years, with poverty declining from 44.2 percent in 1985 to 33.7 percent in 2000 or merely about 0.7 percentage points annually. In fact, the number of the poor has not been reduced but
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instead has increased from 4.6 million in 1985 to 5.14 million in 2000. Moreover, the gains in poverty are only clear in urban areas where poverty declined by 14 percentage points from 1985 to 2000 compared to only four percentage points in rural areas. And finally, there has not been any improve-ment with regard to the aspect of income distribution as shown in the various measures of inequality.
B. Family size and poverty incidence
Invariably, poverty incidence is seen to be higher among those with larger family sizes. This empirical regularity is found everywhere in the world and for the Philippines, the data are shown in Table 1. Of course, a careful researcher would be quick to point out that what is depicted here is association, not causation. The rest of this Notes, however, will provide support to the hypothesis that apart from association, there is indeed causation.
C. Population and poverty: links and evidence
There are three channels through which demographic changes affect poverty outcomes. These are the growth, distribution and conversion channels.
Growth channel. This refers to the impact of demographic changes on the level and growth of the average attainable well-being per person, usually measured in terms of average income. This can be likened to the impact of demographic changes on the “growth of the pie.” The impact of demographic changes on economic growth had been clearly demonstrated by the experience of East Asian countries and to a smaller extent by our neighboring countries. The rapid decline in fertility had created an opportunity for East Asian countries to grow faster. This is know in the literature as the “demographic bonus” and has contributed as much as one-half of recorded growth in Southeast Asia and about one -third in East Asia between 1965 to 1990.
The importance of the growth channel is clearly demonstrated in the case of the Philippines. In spite of its boom-bust economic growth record, it has been established that Philippine economic growth contrib-uted a bigger proportion, compared to redistribution, to the decline in poverty incidence. Without this even tentative economic growth, therefore, our poverty alleviation record would have been substantially
Family Size Poverty Incidence
Table 1. Philippine poverty incidence and family size
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demographic changes on the “sharing of the pie.”At the aggregate level, high fertility skews the distribution of income against the poor as shown in cross-country analyses. While there is still no direct evidence on this in the Philippines, it is not difficult to surmise that this is also true for the Philippines. As mentioned earlier, we have had a boom-bust economic growth in the last 25 years. This means a weak demand for labor. The supply of labor, on the other hand, grew rapidly given the continued high fertility and rapid population growth. Bringing these two together means a non-increasing or even declining level of real wages, which would redound to a shrinking share of labor—the main asset of the poor—in output.
At the household level, demographic changes like, say, additional children, may be said to affect the distribution of resources if they influence, for instance, the drive of households to generate resources.
Research results show that the presence of additional children has no clear impact on the labor force participation of the father although the impact on that of the mother is clear: it declines as the mother usually decides to stop working. This contributes to the skewing of the distribution of resources against families with a large number of children.
Conversion channel. This refers to the impact of demographic changes on the conversion of the attainable well-being into actual well-being per person. This can be thought of as the impact of demographic changes on the “generation of actual personal well-being from the share of the pie.”
One of the main issues in this channel is whether the poor have larger families because they prefer to have large families. This has been used to explain results such as those shown in Table 1. If they do, then it would lower their well-being if government tries to convince them to adopt a smaller family size norm.
Evidence on access to family planning services and contraceptive prevalence rates, however, continuously show that the poor have poorer access and have lower contraceptive prevalence rates than richer households. Thus, they obviously have weaker control over their fertility compared to richer households as may be seen, for instance, in the higher level of unmet need among the poor. In addition, the difference between actual and desired fertility is also higher among the poor. Thus, unless the poor and the rich have equal abilities in controlling fertility, it would be erroneous to claim that the poor prefer to have large families.
It is also well-established that the poor invest less on the human capital of their children. Large family size has been shown to be a negative determinant of school participation among older children and education expenditure per child. It has also been known to be associated with poorer health and survival rates among children, and has been identified as the main mechanism of the inter-generational transmission of poverty. Finally, recent evidence shows that the vulnerability of households to economic shocks increases with larger family size. This means that households with larger families are less able to protect their attained well-being from the negative impacts of economic shocks.
Source:
• Orbeta, A. Jr. (2003). Population and the Fight Against Poverty. Philippine Institute for Development Studies (PIDS) Policy Notes, (2003-04).
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• ACTIVITY SHEET 3: Recommendations for Poverty Alleviation
• STUDENT READER 9: A Call for Shared Values at the G-20 Summit of 2009
The reason I have long been fascinated by Adam Smith who came from my home town Kirkcaldy is that he recognised that the invisible hand of the market had to be underpinned by the helping hand of society, that he argued the flourishing of moral sentiments is the foundation of the wealth of nations. So the challenge for our generation is whether or not we can formulate global rules for our financial and economic systems that are grounded in our shared values.
Now that people can communicate instantaneously across borders, cultures, and faiths, I believe we can be confident that across the world we are discovering that there is a shared moral sense. It is a sense strong enough to ensure the constant replenishment of that well of values on which we depend and which must infuse our shared rules.
And when people ask can there be a shared global ethics that will lie behind global rules, I answer that through each of our heritages, our traditions and faiths, there runs a single powerful moral sense demanding responsibility from all and fairness to all.
Christians do not say that people should be reduced merely to what they can produce or what they can buy - that we should let the weak go under and only the strong survive. No, we say do to others what you would have them do unto you.
And when Judaism says love your neighbour as yourself. When Muslims say no one of you is a believer until he desires for his brother that which he desires for himself. When Buddhists say hurt not others in ways that you yourself would find hurtful. When Sikhs say treat others as you would be treated yourself.
When Hindus say the sum of duty is do not unto others which would cause pain if done to you, they each and all reflect a sense that we all share the pain of others, and a sense that we believe in something bigger than ourselves - that we cannot be truly content while others face despair, cannot be completely at ease while others live in fear, cannot be satisfied while others are in sorrow. We all feel, regardless of the source of our philosophy, the same deep moral sense that each of us is our brother’s and sister’s keeper.
Call it as Adam Smith did the moral sentiment, as Lincoln did the better angels of our nature, call it as Winstanley did the light in man, call it duty or simply conscience - it means we cannot and will not pass by on the other side when people are suffering and we have it within our power to help.
So I believe that we have a responsibility to ensure that both markets and governments serve the public interest, and to recognise that the poor are our shared responsibility and that wealth carries unique responsibilities too.
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I know that there is one analysis which says we must seize the opportunity of this crisis to reject materialism in all its forms. But for me, the answer doesn’t lie in asking people to foreswear material things or giving up on aspiration for their futures, but instead in remembering what our pursuit of growth and prosperity was really all about, spreading freedom so that ever more people can live the lives they choose.
But it is no repudiation of wealth to say wealth should help more than the wealthy, no criticism of prosperity to say our first duty is to those without it, no attack on the life-long attachment I have had to aspiration to say each of us has a responsibility to ensure no-one is left behind.
Today we must reaffirm the age old truths about society that when those with riches help those without, it enriches us all, and the truth when the strong help the weak it makes us all stronger. But our meeting is only the start and world leaders only one part. I am still humbled by the memory of one of the protestor’s signs I saw at the Make Poverty History rally in Edinburgh in 2005. It said “You are G8 we are 6 billion.”
Source:
• Brown, G. (2009). Speech by the Prime Minister Gordon Brown of Great Britain at St. Paul’s Cathedral on the opening of the G-20 Summit in London. Retrieved from http://
www.number10.gov.uk/Page18858