History of Poverty

Alexander Zukas. Encyclopedia of World Poverty. Editor: M Odekon. Volume 2, Sage Reference, 2006.

People often avoid their poor relations, and historians, preferring to write about monarchs, wars, high politics, and diplomacy, only began writing systematically about poverty in the last 150 years. This shift was part of a greater focus on social history that began as a focus on social conditions, often called the “social question,” in Europe in the 19th century.

Poverty as a field of academic study came of age in the Industrial Revolution in England and France in the 1830s and 1840s and was one of the first areas studied in the new social sciences of sociology and statistics by individuals like Louis René Villermé (1782-1863) and Eugène Buret (1810-42), by journalists like Henry Mayhew (1812-87), and by social reformers like Charles Booth (1840-1916) and Seebohm Rowntree (1871-1954).

It also became a prominent theme of socialists like Pierre-Joseph Proudhon (1809-65), Louis Blanc (1811-82), Friedrich Engels (1820-95), and Karl Marx (1818-81), who criticized the capitalist economic system associated with the Industrial Revolution and the visible rise in urban poverty after 1830. A century earlier, poverty and its effect on human happiness and human potential were a topic in philosophical discussions in the Enlightenment by such thinkers as Jean-Jacques Rousseau (1712-78), François-Marie Arouet (Voltaire) (1694-78), and the Marquis de Condorcet (1743-94).

However, there are no studies of the history of poverty as such. As subjects of historical study, poverty and the poor in Europe and the United States since 1900 have received the most scrutiny, first by such pioneer scholars as Sidney (1859-1947) and Beatrice Webb (1858-1943), and then by their American counterparts Frances Fox Piven (1932-) and Richard Cloward (1926-2001). National and regional histories of poverty received an impetus from the 1960s War on Poverty in the United States, but studies on poverty in the rest of the world have not mustered the same historical energy until very recently. When researching poverty outside Europe and the United States, historians most often encounter books and articles that study poverty in terms of development, a field dominated by Western-influenced institutions such as the World Bank and the International Monetary Fund (IMF), which regard development as a way to end poverty by globalizing capitalism.

Who the poor are and what they do are only important insofar as knowledge of them and their current situation allows them to be regulated and their condition to be abolished at some future date. What is interesting in these contemporary sociological and economic approaches to poverty is that the economic system that first inspired poverty studies, because it was seen as instigating and augmenting a human-made (rather than a divinely-sanctioned) gap between rich and poor, should now be seen as the global solution to impoverishment. The bibliography at the end of this article, however, provides a good starting point for investigating the history of poverty and the numerous approaches to understanding it.

Ancient and Classical Societies

Poverty and poor people have, of course, been around for millennia and their existence was noted by many writers, but none saw fit to write a history of poverty. Rather poverty was a moral and political concern and was cast in those terms. Poverty probably first arose with the Agricultural Revolution and the rise of unequal, class-divided urban societies in Mesopotamia, Egypt, the Indus Valley, and the Yellow (Huang He) River Valley.

Urban societies kept records and censuses, which we can consult, and earlier Neolithic hunting-and-gathering societies did not, so it is difficult to judge the issue of impoverishment in those societies. Such historical hunting and gathering societies, much like their modern counterparts, did not create large economic surpluses and lived very near subsistence, but almost everyone was equally rich or equally poor. In other words, poverty was not a measure of one’s status relative to other people in society. The whole society lived at a certain level of existence, met its basic needs, and reproduced, so there was no absolute poverty, and no one had significantly more than any other member of society because of an ethos of reciprocity and redistribution (for example, potlatch), so there was no relative poverty either. These societies successfully adapted to their environments for centuries and millennia.

In ancient and classical urban societies with larger amounts of disposable wealth and more specialized divisions of labor that became expressed socially in the formation of classes, visible signs of poverty (old, worn, and torn clothing and shoes, deteriorated housing, and ineloquent speech) were one external marker of inferior social or class status.

In urban class societies, poverty was closely associated with lack of paid work. The living embodiment of wealth for others, with the exception of some lucky individuals in rich or royal households, the majority of slaves in ancient and classical Afro-Eurasia and Mesoamerica lived lives at or below the socially accepted minimum standard of living.

Free men and women who were not slaves and worked in a cash or barter economy could accumulate wealth, but the vicissitudes of war, markets, or weather could impoverish workers and middle-class traders alike. The Odyssey mentions beggars and vagrants, as do the poet Hesiod’s (ca. 700 B.C.E.) Works and Days, the Old and New Testaments, the plays of Aristophanes (448-385 B.C.E.), the Republic of Plato (ca. 427-347 B.C.E.), the gospels of Siddhartha Gautama (the Buddha) (ca. 623-543 B.C.E.), the teachings of Mahavira (ca. 599-527 B.C.E.), and the Analects of Confucius (551-479 B.C.E.). Most of these authors did not take poverty or the poor as an object of study. Poverty was an object lesson.

Concerned with social ethics and personal virtue in a class-stratified society during the time of the Warring States in China, Confucius wrote that “riches and honors are what men desire. If they cannot be obtained in the proper way, they should not be held. Poverty and baseness are what men dislike. If they cannot be avoided in the proper way, they should not be avoided” (Analects, IV.5). He and his mother experienced poverty after his father died (Confucius was 3 years old) but, being from a noble family, he still received the best education available to him, so even in poverty, class standing and access to other resources could matter and make a difference in a person’s life. His earlier experience influenced his philosophy: a key Confucian concept is Jen, a form of compassion that is often expressed by helping those in need.

In classical India (ca. 500 B.C.E.-500 C.E.), Buddhist and Jain monks and Hindu holy men took religious vows of poverty and rejected material comfort as part of their desire to attain higher spiritual consciousness. Classical Hindu scriptures outlined four stages of life. In the third stage, when a man had become a grandfather, with his hair turning white and his skin beginning to wrinkle, he was expected to retire to a forest, live as a hermit, and spend his time in contemplation of the gods. The fourth and final stage was a period of asceticism and renunciation of the world. Living alone, he was expected to discard all attachments to the material world and strive for spiritual perfection so his soul could be reborn (reincarnated) into a higher social group (caste) or achieve nirvana and merge with the divine force of the universe.

Thus for classical Hindus, poverty and a renunciation of worldly goods and attachments were encouraged as part of the normal cycle of life. Hinduism, Jainism, and Buddhism strongly encouraged the lifelong practice of monastic lifestyles, which included vows of poverty as ways to achieve greater spiritual perfection and purity. Believing in divine providence, most itinerant, mendicant monks survived through the kindness of strangers by begging for a living. Jain monks and nuns owned no property except a broom, simple robes, bowls, food, and walking sticks. They were allowed to live in buildings only briefly and they had to beg for all their food. The key Jain principle, ahimsa (nonviolence), required positive acts of kindness, compassion, and charity by all Jains, monks and laity. An influential religious minority in India, secular Jains used their business wealth to set up and run hospitals, rest houses, and almshouses for people of all castes and creeds.

However, since begging was considered a civic disgrace in classical Athens, the statesman Pericles (ca. 495-429 B.C.E.) undertook large public works projects so that the unemployed poor could be kept out of abject poverty by the state but not sitting around and doing nothing. He also sent numerous expeditions to found colonies in places like Naxos and Thrace to receive the idle poor of Athens.

In Rome during the era of Tiberius Gracchus (163-132 B.C.E.), homeless people wandered the roads of the republic performing casual labor on the docks and farm labor during harvest time. During this period free grain (annona civica) was given to the Roman masses for the first time and became so common in the first century C.E., that the Roman satiric poet Juvenal (ca. 55-127 C.E.) remarked that the people of Rome yearned only for two things, bread and circuses. The armies of Marius and Sulla and other Roman generals in the 1st century B.C.E. were generally recruited from the ranks of the urban poor and their pay was based on looting and conquest. The Roman practice of giving land to discharged soldiers was a means to prevent a return to impoverished circumstances, but it required further conquests.

No one gathered statistics on poverty or poor people in the ancient and classical world. Poverty, like death, was regarded as an inescapable part of life. One could and should try to avoid it, but it could befall anyone and was certainly inescapable in a class society that could only support a minority of rich and well-off individuals and families.

While poverty may not have been ascribed to individual responsibility given the wide range of natural and human-made calamities that could befall individuals in the ancient and classical world (for example, earthquake, war, disease, poor hygiene, famine, drought, etc.), poverty that was the result of idleness was regarded harshly in classical Greek society and resulted in chastisement or being sent to a colony and essentially banished from the city to support oneself as best one could.

Idle poor, the Roman proletarii, whose name meant they served the state only by begetting children (that is, future mercenary soldiers), were most often seen as a threat to public order by their individual and collective behavior: they undermined the civic good by their bad and idle example, they drained the public purse of funds for their support, they stole to meet their needs when all else failed, they formed mobs that endangered commerce and safety, they could be recruited by generals to serve as troops in civil wars against the government, and they could storm the homes of the rich in a social revolution. The poverty produced by a class society was rightfully recognized as a threat to its good order and stability.

In the 5th century C.E., the civic revival and urban wealth of the Gupta empire promoted the development and spread of “hospitals” throughout India. These facilities provided shelter for poor and disabled homeless people and resembled almshouses rather than modern hospitals. Around 540 C.E., institutions similar to those in India spread to China and the Middle East. The Muslim followers of the Prophet Muhammad (ca. 570-632), himself an orphan, incurred an obligation to give alms to relieve the misery of the weak and poor and paid a zakat (purification tax) as one of the Five Pillars (obligatory duties) of Islam that provided institutional support for the poor.

They also reached Europe around the same time, and the first of these “hospitals,” the Hôtel Dieu (house of God) established in Lyons, France, was run by monks and lay volunteers. In Tang China, the Empress Wu (625-705) initiated a social reform program for a statesponsored Buddhist monastery and operated almshouses to care for the poor.

The Postclassical World

In the last centuries of the Roman Empire, Christian monasticism became an increasingly popular expression of piety. It thrived in the Byzantine Empire and medieval Europe as well. Monasticism derives from a Greek word that means the act of “dwelling alone.” It came to signify a mode of life in which people lived in seclusion from the world, usually under religious vows and subject to a fixed set of rules, as monks, friars, or nuns.

Christian monasticism followed the basic idea of Hindu and Buddhist monasticism in promoting seclusion or withdrawal from the world or society and a renunciation of worldly ties in the interest of spiritual development. Since the world desired and honored wealth, so the ascetic monks and nuns loved and honored poverty as bringing them closer to spiritual perfection and away from the temptations of the flesh and material comfort, which they regarded as obstacles to loving God.

St. Basil of Caesarea (329-379), patriarch (religious leader) of Constantinople and what became the Eastern Orthodox Church, established rules for monastic communities that regulated the lives of monks and nuns and mandated a life of work, prayer, and material asceticism. Basilian monasticism spread rapidly throughout the Byzantine Empire in subsequent centuries. The communities they ran could become quite wealthy but the individual monastic monks and nuns lived the vow of poverty.

In western Europe, some of the Roman Catholic Church’s wealth was used by Pope Gregory I (ca. 540-604) to organize programs to assist the poor directly and promote the expansion of “hospitals” to major urban centers, and around 787 clergy established the first European foundling hospital (orphanage) for abandoned children in Milan, Italy.

Besides Egypt and Mesopotamia, Christian monastic communities grew in Italy, Spain, Gaul, and the British Isles. St. Benedict of Murcia (480-547), perhaps in imitation of St. Basil, created a Rule for Roman Catholic monastic communities where poverty, chastity, and obedience became prime virtues along with prayer, meditation, and work. Like Buddhist monasteries and Muslim religious foundations, western European monasteries served as charitable institutions and places of refuge for the poor who suffered from the effects of natural disasters, were orphaned, or needed medical treatment.

Through vows of poverty, their lack of consumption allowed for the accumulation of great institutional wealth, which often went toward alleviating the suffering of poor individuals. Early monks did not see poverty as a disgrace if it was freely chosen as a way to achieve spiritual perfection or if it befell an individual because everything was part of God’s creation.

By the High Middle Ages (ca. 1100-1450), monasteries had acquired so much wealth that Benedictine monasteries had become comfortable retreats, and reformers like St. Dominic (1170-1221) and St. Francis of Assisi (1182-1226) founded mendicant (begging) orders of friars to counter what they saw as the corruption and materialism of the church. They believed that poverty brought them closer to God and to the Jesus of the New Testament. Using Jesus as a model, mendicants had no personal possessions and had to depend for their food and material needs on the people to whom they preached and tended. Mendicants were especially active in medieval towns and cities, where they tended to the poor and worked to persuade heretics to return to the Roman Catholic Church.

The Franciscans and Dominicans joined a large number of people in the High Middle Ages who earned a living from begging, not to mention thievery and fraud. Vagrancy, or moving from town to town, was increasing in this period as rural economic conditions changed, new land was brought under cultivation, money circulated more freely, long-distance trade revived, and there was climate change (causing crop failures and famine), war, disease, and plague.

Departing from the Greco-Roman view of the poor, medieval western European Christianity had a powerful commitment to caring for the unfortunate that was based on the beliefs, as embodied by early Dominicans and Franciscans, that poverty was a holy state, accepting alms was no disgrace, and charity was a pious act as well as a key to eternal salvation. The poor were often presumed to have special influence with God: friends of a deceased person often gave alms to beggars on the condition that they perform prayers for the soul of the dead comrade.

Beggars were not only inevitable but also indispensable elements of medieval communities: if there were no beggars, one could not give alms and win favor with God for kind deeds or penance for one’s evil deeds. Such symbiosis was a necessary element of the medieval Christian worldview and allowed other paths to redemption. Around 1084, after the Norman Conquest, almshouses for poor and disabled people, similar to the “hospitals” in France, were established in Canterbury and began to spread throughout England.

In the early 12th century, the Roman Catholic Church promulgated the Decretum, a compilation of canon law, which included an extensive treatment of the theory and practice of charity. It affirmed that rich people had a legal and ethical obligation to aid the poor and destitute. Around the same time in southern India, King Nissanka Malla (1187-1196) erected almshouses to care for the poor and embody charity in Dambadiwa and Sri Lanka.

Still, the idea of avoiding work was reprehensible even for those who emphasized a life of contemplation like monks who had a regular work regime. According to Christian beliefs, Adam’s fall had condemned all people to live by labor, so the principle of charity was upheld, but with limited resources to care for non-productive individuals in preindustrial societies, charitable priorities were established. The main distinction, which exists down to the present day in European societies and their global offspring, was between the deserving and the undeserving poor.

The deserving poor were those, like widows, children, and the maimed or sick, who became impoverished through no fault of their own or whose skills or health was not sufficient to support themselves or their families. Undeserving poor were persons who were willfully idle: they could work and earn a sufficient living but chose not to do so. Thus a claim to aid was increasingly tied to the willingness to work one’s way out of poverty. Poverty was no longer a God-given condition but a condition that could often be changed by individual action. Poverty was no longer a sanctified state but increasingly a rather disreputable one by the 12th century, when some church legal scholars took the position that anyone who was able to work but unwilling to do so should be denied help no matter what the circumstances of life. Other scholars thought that alms given to the poor should be associated with efforts to make them change their ways and discussed whether punishment (in the form of work) or education would be the best means of correction.

In a complete turnaround from the earlier medieval attitude, which saw poverty as a blessed state, by 1400 poverty was increasingly associated with personal vice and immoral behavior, especially in urban centers as population decreases associated with the wars, famines, and plagues of the 14th century thinned the ranks of laborers and sent them migrating across Europe to seek better wages and working conditions. Rural depopulation and a labor shortage left many churchmen and bourgeois with little sympathy for people who would not work for a living.

In 1349 Edward III of England issued the Statute of Labourers, which required people to remain on their home manors and to work for whatever the lords wanted to pay. It prohibited begging and almsgiving except for older people and those unable to work. For the first time, a legal distinction was made between the “worthy poor” (older people, disabled people, widows, and dependent children) and the “unworthy poor” (able-bodied but unemployed adults). The latter were considered “valiant beggars” who needed to be compelled to work for their living.

In 1350 Jean le Bon of France declared that those “sturdy” beggars and others able to work would be penalized by deportation or incarceration and that no charity be given to them by the clergy. In 1351 Pedro the Cruel of Castile declared that all sturdy beggars in his kingdom would be flogged. None of these measures could be enforced, but they signaled a new attitude toward poverty and the poor among the states of late medieval Europe that would inform subsequent developments there and around the world.

The European poor did not sit idly by as their lot worsened in the 14th and 15th centuries. In 1378 the Ciompi Revolt of artisans and laborers in Florence overthrew the government for a time, and Wat Tyler’s rebellion of peasants in England in 1381 burned London and got King Richard II to abolish serfdom and the Statute of Labourers, albeit only temporarily. Major disturbances of the urban and rural poor broke out over the next century in France, Catalonia, Scandinavia, and Bohemia, among other regions, and there were 14 revolutions in the city of Genoa alone between 1413 and 1453. As economic conditions improved after 1450, greater class inequalities arose between artisans and merchants and between artisans and workers while enclosure for sheep-raising displaced peasants, who became part of an impoverished migratory workforce. Gradually “the poor” came to mean those who have no property except their labor power, their ability to work.

The Modern World

The lack of employment and the growing numbers of poor were causes of great concern among the upper and middle classes because of the experiences of the recent past, the late 13th and early 14th centuries, when the poor turned to social upheaval and revolution to improve their position. In 1526 Juan Luis Vives (1492-1540), a Spanish philosopher and humanist who spent his adult life in France, England, and the Low Countries and was horrified by the physical condition of the abjectly poor and the inability of voluntary charities to aid them, worked out a theoretical justification for state-run poor relief and developed a plan to organize and regulate charitable relief, which included registering the poor, raising private funds to help them, and creating employment for the able-bodied poor. Many of the ideas in his book De Subventione Pauperum influenced subsequent practice in European cities and various European poor laws.

For instance in 1529, the city-state of Venice enacted a poor law requiring people seeking alms to obtain a license and to do some public-service work in order to get the license. England followed suit in 1531 with its first statute on poor relief, which required justices of the peace to interview and license certain people (the old and disabled) to beg in their own neighborhoods and to punish harshly any unlicensed beggars.

In France the city of Lyon established the Aumône-Générale (general fund) in 1534 after a bloody uprising of the poor in 1529 sacked the city, to discriminate among the poor and to help those who had been evaluated as worthy of aid. The basic idea behind this municipal poor relief system (called gemeinde Kasten in German) was to establish a comprehensive system of local relief for the worthy poor and then ban begging for those deemed unworthy. Any unauthorized beggars could then be considered criminals and driven out of town, jailed, or forced to labor on civic projects.

The Habsburg Emperor Charles V (1500-58) expanded this idea and issued an edict banning begging in his territories (Spain, the Low Countries, Austria, Mexico, Peru, etc.) in 1531 while instituting municipal poor relief, and the French king François I (1494-1547) issued a similar order in 1536. The English Act for the Punishment of Sturdy Vagabonds and Beggars (1536) classified the poor and established procedures for collecting and spending donations at the local level, and the English state under King Henry VIII (1491-1547) assumed a more active role in the caring (and policing) of poor people as a secular activity.

European visitors to China in the 16th century praised the maintenance by the state of almshouses and hospitals. The year 1601 represented a major milestone in the history of poverty when the Elizabethan Poor Law was established. Built on experiences from the earlier Henrician Poor Law (1536) and the Parish Poor Rate (1572), this legislation became the legal basis for dealing with poor and disadvantaged people for the next two centuries in England and its colonies. Retaining the administration of poor relief at the local level, the Poor Law taxed people in each parish to support the parish poor, established apprenticeships for poor children, developed workhouses for the chronically unemployed, and dealt harshly and punitively with the able-bodied poor.

The operative assumption was that work was available for all who wanted it (that is, there was no surplus of labor power), and no study of the actual conditions of the poor was undertaken by any of these agencies. Such studies would wait until the 19th century. In many of the nations that did not turn to Protestantism during the Reformation, the church rather than the state retained more responsibility for the care of poor people.

For instance, in 1625 Vincent de Paul established seminaries, religious orders, and charitable organizations to care for the poor people of France and is considered the founder of organized private charity in Europe. However, in 1642, Plymouth Colony enacted the first poor law in the English-speaking New World, based on the Elizabethan Poor Law of 1601.

Growth in population was one cause of the rise in the number of poor people. In 1600 the population of Europe was around 60 or 70 million people, twice what it was in 1500. Repeated crop failures set off a chain of misery and unemployment that also increased the number of poor in the 16th and 17th centuries.

Following a Confucian model, in China the Emperor Kangxi (1654-1722) of the Qing Dynasty (1644-1912) organized a nationwide system of grain storage in silos based on the precedents of earlier dynasties to alleviate the suffering and starvation of the poor in periods of natural or civil disaster. For European rulers in the age of mercantilism, overseas colonies became ideal places to dump the poor, who were expelled for illegal begging or who were just becoming more numerous. King James I of England (1566-1625) ordered the colonization in Virginia of poor and idle young people while Georgia and Australia served as English penal colonies for the criminally poor in the early and late 18th century, respectively.

The directors of the West India Company urged the importation of poor and orphaned children from the Netherlands into New Netherlands in 1645 and France and Spain enforced similar measures. Of course, the enforced enslavement of millions of Africans from 1450 to 1888 created a large pool of impoverished individuals in the Americas, some of whom were able to save and buy their freedom in Spanish and Portuguese colonies, but the standard of living of field slaves in a plantation economy was uniformly low—often not even allowing for natural replacement through biological reproduction, as witnessed by the short life expectancy (five to seven years) of recently arrived slaves in the Caribbean and Brazil.

The era of mercantilism began a final shift in the history of poverty, a shift that is still being worked out today. The attitude of mercantilists and government officials like Thomas Mun (1571-1641), Antoine de Montchrétien (1576-1621), William Petty (1623-87), and John Locke (1632-1704) was an expression of their class attitudes to the poor in general: they were seen as a drain on national wealth. They argued that lower wages would increase efficiency by spurring the poor to work harder in order to earn a bare subsistence, they attacked poor relief as an incentive to idleness and poverty and a waste of public resources, and they believed that lazy and poor workers allowed those who would work to command higher than normal wages. In many ways they presaged the arguments of Thomas Malthus (1766-1834), whose work on population and poverty has been foundational for modern global discussions of poverty.

Their concerns led to the development of the workhouse. The first true workhouse was apparently opened in Amsterdam in 1596 and spread from there to the rest of Europe and Britain, where an English version was founded in Bristol in 1697. The system was designed to lower parish poor taxes by denying aid to anyone who refused to enter a workhouse. These institutions were usually run by private businessmen who contracted with local authorities to provide for the residents in exchange for using their labor to make products for sale.

With some exceptions, residents were usually given minimal care and worked long hours as virtual captives. By the 1850s, the majority of those forced into workhouses were poor but not work-shy: they were the old, the infirm, the orphaned, unmarried mothers, and the physically or mentally ill. Most workhouses lost money and failed to accomplish their purposes even if they persisted well into the 20th century: they were officially abolished in Britain in April 1930.

It is against this backdrop of the workhouse and the concern with the displacement and poverty that accompanied the early Industrial Revolution in the late 18th and 19th centuries in Europe that poverty as an object of social inquiry rather than as a moral, legal, and disciplinary concern, came into its own. Poverty was increasingly seen as an obstacle to development, personal as well as industrial and economic, and a continued threat to political order. In 1795 the English developed the Speenhamland system as an alternative to the workhouse and to riots and other civil disturbances caused by food shortages. A poverty line was developed for the first time in the English district of Speenhamland and workers were eligible for subsidies whenever their wages fell below this amount. The amount was based on the price of bread and the number of dependents a worker had to support. As prices increased or wages declined, the local treasury made up the difference.

Malthus believed that the poor laws and the Speenhamland system in particular promoted poverty because they allowed the number of poor to exceed its natural mathematical limit as determined by low wages, malnutrition, disease, and misery. Increases over that limit merely multiplied the future misery of the poor, whose increased numbers would have to diminish like a law of nature when they outstripped the available food supply.

Classical economists like Malthus and David Ricardo (1772-1823) argued that working-class poverty was caused by overpopulation, that hunger would compel everyone to work, and that there was work for all who wanted to labor. With the persistence of poverty and surplus labor despite the expansion of wealth and output that industrialization made possible, reformists and socialist critics would begin an empirical and theoretical investigation of poverty and the workings of the capitalist system to disprove the largely deductive system advanced by the classical economists.

An early social study by Sir F.M. Eden, The State of the Poor (1797), was followed by empirical investigations by the legislatures of Massachusetts and New York in the 1820s, by studies of the poor in northern France, and by the English Poor Law commissioners in the mid-1830s. The poor remained the “dangerous class,” especially after the Europe-wide revolutions of 1848.

Marx regarded unemployment and the poverty it spawned as entirely normal and necessary aspects of capitalism and as a major reason for doing away with the system altogether: modern poverty resulted from the operations of the laws of the market, not from natural causes or personal vice. Empirical researchers like Charles Booth, whose research in East London found 35 percent of the people living in abject poverty, and conservative politicians like Chancellor Otto von Bismarck (1815-98) of Germany supported measures that they described as “limited socialism” (state-supported old-age pensions, unemployment insurance, and accident insurance), which could help workers avoid poverty in the normal operation of the capitalist system. Booth and Bismarck both believed that if the government failed to take action, their countries were in danger of experiencing a socialist revolution.

Such arguments did not gain widespread acceptance until the Great Depression of the 1930s threw 10 to 30 percent of a nation’s population out of work and achieved theoretical justification in the writings of John Maynard Keynes (1883-1946). The “welfare state” would manage, police, support, and coopt the poor created by the operations of capitalist markets by taxing the economic surplus created by that system and redistributing part of it to the poor.

Hundreds if not thousands of studies were conducted on the poor in nearly every country in the world, and the fear of social unrest underlay them all as this model of social-contract capitalism was exported from Europe and the United States to other countries. Some analysts noted a “discovery” of mass poverty in Asia, Africa, and Latin America after 1945 that provided an anchor for restructuring global culture and economics along capitalist lines.

Annual per capita income became the sole measure of wealth or poverty, even in countries whose economies were not monetized. The awareness of poverty on a global scale was the result of a comparative statistical operation in 1948 when the World Bank defined as impoverished countries in which the annual per capita income was below $100.

If the problem of poverty was construed as essentially lack of monetary income, then the solution was economic growth and an increased supply of money, based first on Keynes’s theories and then on neoliberal ones.

By the 1980s, not only was the welfare state under attack in Britain and the United States but the World Bank, the International Monetary Fund, and the governments of the wealthiest industrialized nations promoted a neoclassical regime for eliminating poverty in Asia, Africa, and Latin America based on the writings of Malthus and Ricardo. We live in the midst of this situation in the 21st century.


A break occurred in the earlier conceptions and management of poverty with the end of the European Middle Ages and the rise of mercantilist states like Henry VIII’s England, François I’s France, and Charles V’s Spanish empire. The poor laws passed by these monarchs and refined in subsequent years helped shape the development of capitalism in 17th-century Europe and the Industrial Revolution of the 18th and 19th centuries. The advent of systems to manage the poor based on assistance as well as punishment provided by impersonal institutions transformed the poor into the “assisted” with profound consequences.

This reconceptualization of the poor, as assisted or dependent, not only signified a rupture of traditional social relations in which poor but independent people, including beggars and mendicant monks, coexisted alongside wealthy individuals, but also set in place new mechanisms of control. The poor increasingly appeared as a social problem that required new ways of being managed and, in the process, of managing society as a whole.

The management of poverty in 19th-century Europe required government interventions in education, health, hygiene, morality, and employment and led to a multitude of interventions that created a domain of knowledge and practice that many researchers have called “the social.” The rise of sociology and social statistics was one measure of the formation of this domain, which has now been extended globally by institutions like the World Bank and the International Monetary Fund.