How can business reduce poverty?

The New Statesman ran an essay competition last autumn, challenging us to write an essay answering the question: “How can business reduce poverty?” The winning entry was to be published in The New Statesman. Mine wasn’t the winning entry, so I’m publishing it here.

How would you answer the question? Do you agree with me?

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Many businesses justify their existence in terms of creating jobs. Jobs, they argue, mean prosperity. But with inequality rising fast, this looks like more and more of a smokescreen. We must take a more critical view of whether business – especially neoliberalism – is a strategy that will ever genuinely eliminate poverty.

Many would argue that business reduces poverty simply by existing. After all, surely a boring, badly-paid job is better than no job? Rich nations like Britain would not be where they are  today without the industrial revolution. From hard, dirty and dangerous labour, we gained the 35-hour working week, fanatical health and safety legislation, and 20 days of paid leave a year.

This is what is happening in the developing world, we are told. In rich countries, we may thank our lucky stars that we personally do not have to toil in factories for 19-hour days, doing repetitive work for starvation wages, but for developing countries, it is an inevitable step on the road to riches. For the average worker during the Industrial Revolution, things got worse before they got better.

Comforting as this sounds, we are not comparing like with like. In many ways, our own economic growth has ultimately gone hand in hand with poverty reduction, but we are slamming the door on those who would do the same. Globalisation and neoliberal economics mean we cannot expect the development of the UK to serve as a simple model for the vast diversity of the world at large.