Poverty, capabilities and freedom

The idea of poverty has played a central role in political economy since the first pages of the Wealth of Nations, where Adam Smith distinguishes between what he calls the civilized and savage states of man. Classical economists connected the idea of poverty to the idea of subsistence, and the idea of subsistence to the capacity to maintain a way of life of a particular kind, appropriate to the occupant of a well‐defined position in society. The attempt to define poverty in this way runs into difficulty, however, in a modern rather than subsistence‐based economy. In this essay, the idea of capabilities is developed in a specific direction to suggest a way of thinking about poverty suitable to a modern society. Poverty is defined as the opposing pole to freedom, and freedom is linked to creativity in work. Creativity in work is considered the exercise of a human capability, specifically the capability to do skilled labor. Poverty results, then, either when this capability does not develop, or when the opportunity to exercise it is unavailable.