Industrialization And Poverty

The process of industrialization comprises a history of poverty – the two are inextricably intertwined. A modern-day Faustian pact, industrialization serves as both cause and solution to poverty for developing nations. From Latin America to East Asia, slums and social dislocation are concurrent themes with industrialization, the impact magnified by market and political forces that have diminished the ability of multiple governments to “compensate for the negative propensities of capitalism”. Conversely, the so-called ‘miracle’ economies of East Asia have revived industrialization as a model to be replicated – under certain conditions. For the purpose of this paper, poverty is understood through the lens of Amartya Sen’s Five Freedoms with

The systemic fracturing of existing social organisation and commodification of labour necessitated by the transition to industrialization forms a denial, or deferral of freedoms as defined by the framework of Amartya Sen – particularly economic and social freedoms and sometimes political freedom. As Furtado argued, the distinguishing characteristic of “underdeveloped countries (was) the existence of the pre-capitalist sector” which formed a source of free, and inexpensive, labour. Economic and social policies necessitated by industrialization, compel individuals to participate as a factor inputs alongside land and capital and deprives them of opportunities beyond the market economy. In accordance with Sen’s ‘agent-oriented’ framework, the ‘systematic social deprivation’ of the industrial economy limits the ability of “individuals…[to] effectively shape their own destiny and help each other.” Even in the ‘miracle’ models presented by South Korea and Taiwan, the successful development of an industrialized economy depended on the restriction of political

In East Asia, countries such as South Korea have enjoyed unprecedented income growth and poverty reduction alongside industrialisation. Benefiting from the geo-political conditions of the Cold War, the countries industrialised with “’bad’ trade and industrial policies” alongside “privileged access” to the western world. Over time, the short term consequences of poverty and dislocation have been mitigated by rising material standards including income levels and prosperity. But, as David Harvey argues, this emancipation was meagre when compared with the new labour conditions, which were “centralised, deskilled, totalitarian and alienating”, with the lion share of benefits the dominion of local elites who “collaborated with and profited from the penetration of