This is the real truth about poverty

Today the Herald is running a story calling for “new honesty” about child poverty based on an intervention by the chief of a poverty charity. Unfortunately that story doesn't quite manage full honesty either.

Anti-poverty charities do sterling work and they improve the lives of many thousands of families who live in or near poverty. They make an enormous material difference to an awful lot of lives. They have called for the Scottish Child Payment to be increased and this is a solid policy proposal which will also make a significant difference.

What none of that represents however is a new honesty. Poverty and welfare charities are not eradicating poverty, they're making it more liveable. Few people are being dragged out of poverty completely and certainly the total number of people living in poverty is not declining because of remedial activity.

Likewise, the Scottish Child Payment does not solve poverty either, it masks it somewhat. The poverty is still there, all the structural problems persist, the people trapped in that poverty are not independent actors who are in a position to decide their own fate. They are just given pocket money to make it feel less bad.

That is the honest assessment of remedial rather than preventative action on poverty. Here is some more honesty – the Scottish Child Payment is a way to make ordinary people pay for the failures of the actions of the super-wealthy.

Only about ten per cent of the UK's tax base comes from taxes on corporations and yet corporations own much of the globe's wealth. To put that ten per cent in perspective, the market capitalisation of the top 50 corporations in the world is about £13 trillion and the global economy is worth about £109 trillion.

In fact of the 200 richest entities on earth, 157 are corporations. Yet their dominant wealth is not properly reflected in taxes. So when core taxes are used to underwrite poverty they take disproportionately from people on salaries, people who own houses, and (ironically) people who have to buy things in the shops (through VAT) which disproportionately hits the poor.

The 'new honesty' about poverty that we need to accept is the old honesty about poverty – it is a result of economic systems that benefit the rich and which are specifically designed to benefit the rich. We have a global policy which is not stated but which is dominant; create ever-greater economic inequality and wait for the wealth to trickle down.

That failed economic policy is no longer named but every time that a politicians says we need 'economic growth' to fund 'public services' they are describing trickle-down economics. They are continuing to promulgate the idea that if you can just create the most possible wealth at the top of society, this will then inevitably cascade downwards and benefit us all.

This has been so overwhelmingly debunked over the last couple of decades and has been shown to be utterly false both theoretically and empirically that it is quite remarkable that it remains the dominant theory of public finances.

If we are to have a new national honesty about poverty we would stop pretending that it can be fixed with £27 and some well-meaning charities. You will know when that honesty is starting because politicians will say what social economists have known for decades – this is all about economic inequality.

We have an economic system designed to create inequality and poverty is a design feature of that, not a glitch. It is poverty that drives economic growth by disciplining people into working for wages greatly below the value of the work being done (now largely in the global south). And it is excessive protection of corporate intellectual property rights which transfers money from the population to corporations.

They are under-taxed, under-regulated and we do not even nearly enforce fair work laws, anti-monopoly legislation and a host of other simple policies that would address this problem adequately and fairly quickly. And everything that can be said for corporations and big finance can also be said for the landlord industry.

That is not a topic of conversation in Scotland or, really, anywhere else in mainstream Western politics. Why? To answer that requires some brutal new honesty about poverty in Scotland, and it goes like this:

The corporations, the banks, the landlords and the charities have political lobbyists and easy access to politicians and the media, but the poor do not, while the politicians do not get lucrative careers after politics by being friendly to poor people, and anyway poor people don't really vote. That is the real truth about poverty in Scotland.