Poverty has no causes

by Sandy Ikeda

There are a couple of discussions of poverty going on right now, here and on the “Austrianecon” list-serve, which gives me a convenient opening for the following.

I’ve been re-reading Jane Jacobs’s second book, The Economy of Cities (1969), while working on a short piece for a Festschrift in her honor.  FYI I’m writing about the virtue of inefficient cities, paying close attention to the chapter 3, “The valuable inefficiencies and impracticalities of cities.”  Although less known and influential than her first book, The Death and Life of Great American Cities (1961), EC is devoted to developing her economic ideas and is full of great insights, such as the following from that chapter:

To seek ‘causes’ of poverty…is an intellectual dead end because poverty has no causes.  Only prosperity has causes.  Analogically, heat is a result of active processes; it has causes.  But cold is not the result of any process; it is only the absence of heat.  Just so, the great cold of poverty and economic stagnation is merely the absence of economic development.  It can be overcome only if the relevant economic processes are in motion.

What Jacobs has in mind here is the underlying condition of poverty, not temporary impoverishment that’s due to episodes of unemployment, which may indeed be traced to particular causes. Continue reading